blackburn group inc.

July 2014

#Our e-newsletter for Enterprise Risk Management, Claim Settlement and Healthcare Solutions.


Enterprise Risk Management (ERM)

In a recent survey, NYSE Governance Services, Corporate Board Member and Spencer Stuart collaborated to survey the opinions of directors who serve on the boards of U.S.-based publicly traded companies. The highlighted key risk oversight and strategy observations include:

Increased emphasis on understanding of IT/cyber risk. Experience in overseeing the growing threat of cybersecurity risk is one of the key attributes boards will look for when appointing their next new corporate director. In addition, IT strategy appeared among the top five items directors would choose if setting the agenda for their next meeting.

Boards recognize they need a better grasp on risk. Thirty-nine percent (39%) of directors believe they could improve their ability to oversee risk if they had a better understanding of the risk oversight process itself.

Strategic Risk Objectives. Board members were asked a question "Are new strategic objectives always reviewed by the full board to ensure they align with the company’s risk appetite?" Over 87% said “Yes”. For additional highlights, a link to this report and related resources, please click here

Claim Settlement, Medicare, and Medicare Set Asides

HHS Reports Record Savings To Protect the Medicare Trust Fund from Fraud. The Centers for Medicare and Medicaid Services (CMS) are using the Fraud Prevention System (FPS) to run predictive algorithms and other sophisticated analytics nationwide against all Medicare fee-for-service (FFS) claims prior to payment. For the first time in the history of the program, CMS is systematically applying advanced analytics against Medicare FFS claims on a streaming, nationwide basis as part of its comprehensive program integrity strategy.

CMS Publishes Alert Indicating Liability Mandatory Reporting Threshold Will Increase from $300 to $1,000 on October 1, 2014. Workers Compensation Mandatory Reporting Threshold Remains $300. In an updated MMSEA Section 111 Non-Group Health Plan (NGHP) User Guide, Version 4.2, Chapters I – V are now available in the Downloads section of the NGHP User Guide page. The recent version documents the change in reporting threshold for certain liability insurance (including self-insurance) settlements, judgments, awards, or other payments.

Medicare Secondary Payer (MSP) Rules for Same Sex Spouse Under MMSEA Reporting for Group Health Plans (GHP). As background for its ruling, Section 3 of the Defense of Marriage Act (DOMA) provided that for purposes of federal law, the term “spouse” could not include individuals in a same-sex marriage. Because the MSP Working Aged provisions only apply to subscribers and their spouses, the Working Aged provisions did not apply on the basis of spousal status to individuals in a same-sex marriage. The United States Supreme Court has now invalidated this DOMA provision. 


The Effects of the Affordable Care Act on Property and Casualty Insurance. There has been significant attention paid to the Affordable Care Act (ACA), or Obamacare, for Health Insurance. A recent study from the Insurance Research Council (IRC) highlights implications for the Property and Casualty Industry. The study reports that the property-casualty insurance industry is likely to become the target of significant additional cost-shifting by hospitals, physicians, and other medical providers responding to the cost-containment provisions of the Patient Protection and Affordable Care Act (ACA). By dramatically altering the healthcare industry, the ACA influences all buyers of medical services and products in the United States. Strengthening the tools available to property-casualty insurers to address higher charges and higher utilization of medical services should be considered.

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