NAHU members report that employers are seeing a recent flurry of data match letters. Exactly what is causing this renewed and reinvigorated activity isn’t clear, but employers need to be on the watch for these letters and understand their responsibility to respond to them.
What is data match?
Data match is a program coordinated by the IRS, CMS and SSA that seeks to identify Medicare beneficiaries who received Medicare benefits with Medicare as the primary payer when Medicare should have been secondary. The program has saved the Medicare funds more than 3.5 billion dollars since its inception in 1989.
The data match program reflects the rules that surround Medicare Secondary Payer (MSP). By way of review, Medicare is the secondary payer to some group health plans for services provided to:
- The working aged
- People with permanent kidney failure, and
- Certain disabled people.
“Working aged” refers to persons who are employed at age 65 and over and people with employed spouses of any age who have group health plan coverage because of their or their spouse’s employment status.
Medicare is the secondary payer to a group health plan for the working aged where a single employer of 20 or more employees sponsors or contributes to a group health plan or two (2) or more employers sponsors or contributes to a group health plan and at least one of the sponsors or contributors has 20 or more employees.
Counting to 20 is a bit more complicated than it sounds. Most importantly, determining whether an employer has 20 employees and is subject to MSP, has nothing to do with how many employees are enrolled in the health plan. Also, it is not a count of full-time employees. Instead, the measure is “whenever an employer has 20 or more employees for 20 or more calendar weeks in the current calendar year or preceding calendar year.” This means the number of employees on the payroll on any given workweek.
Employers are required to complete a data match report within 30 days of receipt of the Data Match notice. In some cases an extension of time may be requested. Failure to respond to this letter can result in penalties of as much as $1,000 per person who is part of the inquiry, as well as IRS excise taxes.
The notice contains an employer’s “Data Match Personal Identification Number (PIN).” The letter directs an employer to the Data Match Secure Website. Upon entering the employer identification number and PIN, the employer can access their questionnaire.
This questionnaire asks for information on specific workers or their spouses during a specific period of time. It will also ask if the employee or spouse had employer-provided group health coverage.
Among the questions that employers must complete, if applicable, in response to the Data Match letters are:
- Did you offer a health plan to any employee at any time since (date)?
- Did your organization make contributions on behalf of any employee who was covered under a collectively bargained Health and Welfare Fund (e.g. a union plan) since (date)?
- In the following years, did you have 20 or more employees for 20 or more calendar weeks (this includes full-time, part-time, intermittent and/or seasonal employees)?
- In the following years, did you have 100 or more employees during 50% of your business days (full or part-time)?
- Was this individual employed by your organization during (time period)?
- Was this individual covered under a Group Health Plan at any time after (date)?
The employer is required to certify that the information provided is complete and correct.
Depending on the responses, an employer may receive a follow-up letter with instructions to provide additional information for listed individuals regarding medical expenses paid on behalf of these individuals.
Completing this information may not be as simple as the questions would seem to indicate. The data match inquiry may be made years after the medical services were rendered.
Employers may enter into an Employer Voluntary Data Sharing Agreement with CMS as an alternative to data match. This sharing agreement allows an employer to share coverage information with CMS.
More information on the data match program is available here.