On Thursday, April 25, 2013 Panelists John P Albert – Acting Director, Division of Medicare Secondary Payer Policy and Operations; Cynthia Gross – Health Insurance Specialist, Division of Medicare Secondary Payer Policy and Operations; Elizabeth V. Poole – Health Insurance Specialist, Division of Medicare Secondary Payer Policy and Operations; and Barbara Jean Wright – Senior Technical Advisor, MSP were welcomed by almost 200 members of the National Alliance of Medicare Set Aside Professionals at its annual conference in Baltimore, Maryland.   During the one hour  presentation, CMS Panelists discussed various changes to the CMS website, the Statement of Work (SOW) for the new WCRC Contractor for completing and returning determinations in a timely manner for newly submitted WCMSAs, the new web-portal for submissions/re-considerations and the recent CMS Town Hall Teleconference. They also responded to attendee’s questions.

Changes to CMS Website

CMS reiterated that over the past several years they have been working diligently to make the CMS website more “user-friendly”  more efficient and easier for the user to find information.  The Coordination of Benefits and Medicare Secondary Payer tabs of the CMS.gov website are undergoing updates.  The first completed phase is the WC Agency Services Section which has been replaced by the WCMSA section.   One of the most significant improvements is a tab for “new information.” All newly released information will be housed and maintained for one year, after which it will be archived but remain accessible.  The URL for direct access is: http://www.cms.gov/Medicare/Coordination-of-Benefits/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview.html

Established Turnaround Time for WCRC

CMS made it clear that when the new contract was awarded to Provider Resources, Inc. (PRI) it implemented a Statement of Work (SOW) to ensure timely responses to allocations submitted in the established WCMSA process.   For new allocations, the WCRC now has twenty two (22) business days to review a proposal that is “clean.”  In other words, if the WCRC does not need to “develop” or request for additional information, Allocators should receive the CMS determination within twenty two (22) working days after receipt by WCRC.  If the WCRC is required to develop for additional information, there will be an additional 17 days from the date of receipt of the information.  If the correct information is not received, then an additional 17 days will be added.   It is therefore important to submit all information at the time of initial submission and, where additional development requests are made, to provide the requested information in a timely manner in order to shorten the response time.

New Web-Portal

The new web-portal is up and running and CMS expressed extreme satisfaction with the fact that the utilization of the web-portal as compared to paper submissions is greater than what was originally anticipated.  More than 90% of all allocations are submitted through the web-portal which is designed to be the most efficient means for the WCMSA process. Electronic submissions are encouraged over paper submissions.

CMS Townhall Teleconference April 9, 2013

The CMS Panelists reiterated that one of the focuses of the WCRC contract with new Contractor PRI is outreach and education.   To that end, CMS held its first of what it hopes to be many such Town Halls in the coming years.  They expect to have similar Town Hall conferences  twice per year.   The recent teleconference Town Hall was viewed as a great success with Pharmacists, Clinical, and Legal representation from PRI answering very detailed questions and providing key operational information.  CMS expects to publish a transcript of the April 9, 2013 call as soon as it obtains approval to do so.  It is anticipated that there will be about 37 pages of single-spaced typewritten information in the  transcript.   Due to the ongoing confirmation process for the CMS Administrator, the dissemination of the transcript to the public is on hold until the confirmation process is completed and authorization is provided to release the information.   The transcript is expected to be a good resource for individuals who were not able to attend the teleconference.   Ms. Gross did, however, point out that while every attempt was made to clarify and provide accurate information during the call, the written memoranda and policies of the agency always prevail over information provided in an oral forum such as the teleconference.   CMS is also looking to social media to facilitate its reach through the use of Twitter, Facebook and U-Channel.

Denied Claims for Medicare Beneficiaries with Open Workers Compensation Claims

The CMS panel addressed the issue of denied claims for Medicare beneficiaries and stated that the fact that there is an open MSP occurrence or common working file should not result in denial of benefits for Medicare beneficiaries.   The panel believed that the situation is improving and that there is, unfortunately, nothing that vendors can do with this issue.   They reiterated that physicians are required to bill correctly and that the agency has been completing additional edits and are looking at eliminating certain codes to minimize the incidence of denied claims.  However, CMS maintained that most cases were appropriately denied mostly due to the fact that the affected beneficiaries did, in fact, have other insurance that was primary to Medicare.

A few FAQ’s

CMS had a few pre-approved questions that were submitted in advance of the visit.  The  responses were no surprise to the industry and were as follows:

Q:        Since pricing an MSA is not an exact science, why doesn’t CMS accept the allocation as submitted?

A:         The CMS response (which garnered a huge laugh from attendees) essentially indicated that Allocators have their own assessment of future Medicare related expenses and CMS has its own.

Q:        Will CMS ever provide a new determination when the claim does not settle and things have changed?

A:         No.  CMS reiterated that they do not have enough resources to re review submissions and that WCMSA’s should not be requested prior to the point of MMI so that the claimant’s condition is stable and future care can be reasonably evaluated.

As CMS usually anticipates settlement within four months of an approved WCMSA, if the parties are not reasonably expected to the settle, the WCMSA should not be submitted until there is reasonable certainty that a settlement will occur. Once an approval is offered,  absent a mistake or because CMS has misconstrued the evidence, the parties will be unable to obtain a revised allocation.

Q:        What sources does CMS use for Usual and Customary Charges and why are  State Laws not followed in pricing decisions?

A:         There is no direct system that is used for pricing.  The panel reiterated that the WCRC utilizes evidence based treatment guidelines and multiple sources are used.   It is not the Agency’s intent to include services that are not covered by the WC state law.   However, it is up to the parties to address anything that is not covered by the state law and provide the specific information directly in the MSA.  The specific arguments must be outlined.   Ms. Gross further stated that if the state law does not cover unauthorized case, it is not the CMS intent to price care related to unauthorized treatment. All arguments as to authorization must be made specifically within the MSA.

All in all, the visit from CMS was viewed as an overwhelming success by both the CMS panelists and NAMSAP conference attendees.

Gary Patereau, of the Louisiana Association of Self Insured Employers, certainly deserves the thanks of the Alliance and all attendees as does the NAMSAP Board of Directors for orchestrating the very informative CMS visit. Gould & Lamb will continue to keep you advised of any important developments regarding WCRC processes, procedures and news as it is received

Federal Circuit Court Finds Part C Medicare Advantage Plans Have Same Rights as CMS When Seeking Recovery from Primary Payer

On June 28, 2012, the United States Court of Appeals for the Third Circuit published its decision on Humana Medical Plan and Humana Insurance Company v. GlaxoSmithKline, LLC, concluding that any private party may bring an action under §1395y(b)(3)(A), as it establishes a private cause of action for damages. As a result, the court found that private parties like Humana can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer. In addition, since 42 C.F.R. §422.108 stated that a Medicare Advantage organization can exercise the same rights to recover from a primary plan, entity, or individual that the Secretary of HHS exercises under the MSP regulations, the Medicare Act treats MAOs the same way it treats the Medicare Trust Fund for purposes of recovery from any primary payer.

Humana, an authorized Part C Medicare Advantage (MA) plan allows Medicare enrollees to obtain their Medicare benefits through private insurers (MAOs) instead of receiving direct benefits from the government under Parts A and B. § 1395w-21(a). CMS pays an MAO a fixed amount for each enrollee, per capita (a “capitation”). The MAO then administers Medicare benefits for those enrollees and assumes the risk associated with insuring them. MAOs like Humana are thus responsible for paying covered medical expenses for their enrollees.

Glaxo manufactured and distributed Avandia, a Type 2 diabetes drug that has been linked to substantially increased risk of heart attack and stroke. Thousands of Avandia patients alleged various injuries resulting from their use of the drug and Glaxo began entering into agreements to settle these claims. By August 2011, when Appellants filed their brief, Glaxo had paid more than $460 million to settle these claims. As part of the settlement process, where a claimant was insured by Medicare, Glaxo had set aside reserves to reimburse the Medicare Trust Fund for payments it made to cover the costs of treatment for the claimants’ Avandia-related injuries.

Glaxo had not, however, included reimbursement of MA plans in the settlement agreements that it had reached with Avandia claimants enrolled in MA plans, even though MAOs had paid the costs of treatment of Avandia-related injuries for these claimants. Humana filed suit seeking reimbursement from Glaxo for the cost of treating its enrollees’ Avandia-related injuries. Humana sought, on behalf of itself and a class of similarly-situated MAOs: (1) damages under the Medicare Secondary Payer Act (“MSP Act”), which provides a private cause of action, 42 U.S.C. § 1395y(b)(3)(A), allowing double damages for failure to reimburse a secondary payer; and (2) equitable relief in the form of an order compelling Glaxo to identify settling Avandia claimants to the MAOs that cover them.

Glaxo filed a motion to dismiss. The District Court heard oral argument on the motion and, granted it. In dismissing the action, the District Court found there was no clear legislative intent to create a remedy for Humana. The District Court therefore found that no implied private right of action existed. Accordingly, the Court did not defer to the CMS regulation that granted MAOs parity with Medicare recovery from primary payers.

On appeal, the court found that the text of the provision sweeps broadly enough to include MAOs and that, even if it determined the statute to be ambiguous on this point, deference to CMS regulations would require it find that MAOs have the same right to recover as the Medicare Trust Fund does.

The Medicare Statute creates two separate causes of action allowing for recovery of double damages where a primary payer fails to cover the costs of medical treatment. When the Medicare Trust Fund makes a conditional payment and the primary payer does not reimburse it, the United States may bring suit pursuant to §1395y(b)(2)(B)(iii). Additionally, a private cause of action with no particular plaintiff specified exists pursuant to §1395y(b)(3)(A) anytime a primary payer fails to make required payments.

The court found that the plain text of the MSP private cause of action lends itself to Humana’s position that any private party may bring an action under that provision. It establishes “a private cause of action for damages” and places no additional limitations on which private parties may bring suit. § 1395y(b)(3)(A). Accordingly, the court held that the provision is broad and unambiguous, placing no limitations upon which private (i.e., non-governmental) actors can bring suit for double damages when a primary plan fails to appropriately reimburse any secondary payer.

The court indicated that, although the MSP Act was enacted before Part C, which created MAOs, private Medicare risk plans were authorized under 42 U.S.C. § 1395mm in 1972, before the passage of the MSP Act. Act of Oct. 30, 1972, sec. 226(a), Pub. L. 92-603, 86 Stat. 1396. Thus, at the time it enacted the MSP Act, Congress was aware that private Medicare providers existed. Had it intended to prevent them from suing under the private cause of action provision, Congress could have done so explicitly. In short, the court found that there is nothing in the text or legislative history of the MA secondary payer provision that demonstrates a congressional intent to deny MAOs access to the MSP private cause of action.

The court also recognized that Congress’s goal in creating the Medicare Advantage program was to harness the power of private sector competition to stimulate experimentation and innovation that would ultimately create a more efficient and less expensive Medicare system. See, e.g., H.R. Rep. No. 105-217, at 585 (1997) (Conf. Rep.) (stating that MA program was intended to “enable the Medicare program to utilize innovations that have helped the private market contain costs and expand health care delivery options”). It was the belief of Congress that the MA program would “continue to grow and eventually eclipse original fee-for-service Medicare as the predominant form of enrollment under the Medicare program.” Id. at 638. The MA program was thus, like the MSP statute, “designed to curb skyrocketing health costs and preserve the fiscal integrity of the Medicare system.” Fanning v. United States, 346 F.3d 386, 388 (3d Cir. 2003).

The court reasoned that it would be impossible for MAOs to stimulate innovation through competition if they began at a competitive disadvantage, and, as CMS has noted, MAOs compete best when they recover consistently from primary payers. Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs, 75 Fed. Reg. 19678, 19797 (Apr. 15, 2010). When they “faithfully pursue and recover from liable third parties,” MAOs will have lower medical expenses and will therefore be at a disadvantage, unable to exert the same pressure and thus forced to expend more resources collecting from such payers. The court therefore concluded that it was not the intent of Congress to hamstring MAOs in this manner.

The court pointed out that although the legislative history is nowhere explicit that MAOs may bring suit for double damages under the MSP private cause of action or using any other provision, it does make clear that MAOs were intended to enjoy a status parallel to that of traditional Medicare. Under original fee-for-service, the Federal government alone set legislative requirements regarding reimbursement, covered providers, covered benefits and services, and mechanisms for resolving coverage disputes. Therefore, the Conferees intend that the legislation provide a clear statement extending the same treatment to private MA plans providing Medicare benefits to Medicare beneficiaries. H.R. Rep. No. 105-217, at 638. This court saw nothing in the text or legislative history of the statute to imply that Congress did not intend to facilitate recovery for MAOs in the same fashion.

The Supreme Court in Chevron established a two-part test for determining when a federal court ought to defer to the interpretation of a statute embodied in a regulation formally enacted by the federal agency charged with implementing that statute. 467 U.S. at 842-43. First, the court must determine whether Congress’s intent on the issue is clear — if so, it must abide by that intention, regardless of any regulations. If the statute is unclear, that is, “silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843.

CMS “has the congressional authority to promulgate rules and regulations interpreting and implementing Medicare-related statutes.” Torretti v. Main Line Hosps., Inc., 580 F.3d 168, 174 (3d Cir. 2009); see also 42 U.S.C. §1395hh(a)(1) (“The Secretary shall prescribe such regulations as may be necessary to carry out the administration of the insurance programs under this subchapter.”); 42 U.S.C. § 1395w-26(b)(1) (“The Secretary shall establish by regulation standards for MA organizations and plans consistent with, and to carry out, this part.”). Thus, the court concluded that it must accord Chevron deference to regulations promulgated by CMS.

CMS regulations state that an “MA organization will exercise the same rights to recover from a primary plan, entity, or individual that the Secretary exercises under the MSP regulations in subparts B through D of part 411 of this chapter.” 42 C.F.R. § 422.108. The plain language of this regulation suggests that the Medicare Act treats MAOs the same way it treats the Medicare Trust Fund for purposes of recovery from any primary payer. In this circumstance, the court concludes it is bound to defer to the duly-promulgated regulation of CMS.

A recent memorandum from CMS specifically responded to decisions of the federal courts holding that MAOs were not “able to take private action to collection for MSP services under Federal law because they have been limited to seeking remedy in State court.” Ctrs. for Medicare & Medicaid Svcs., Dep’t of Health and Human Svcs. Memorandum: Medicare Secondary Payment Subrogation Rights (Dec. 5, 2011). This memorandum clarified that CMS itself understood § 422.108 to assign MAOs “the right (and responsibility) to collect” from primary payers using the same procedures available to traditional Medicare.

The court therefore reversed the District Court’s dismissal of the complaint, and remanded it for further proceedings consistent with its opinion.

The decision is the latest in what seems to be an ongoing debate within the industry and amongst litigants regarding the rights of Part C plans when compared to those of traditional Medicare. The case distinguishes recent District Court decisions such as Parra v. PaciCare of Arizona, Inc., Civ. No. 10-008, 2011 WL 1119736 (D. Ariz. Mar. 28, 2011) which sought to define the priority rights of MAOs despite CMS regulation. In the Third Circuit there is now no question that MAOs enjoy the right of reimbursement and the ability to pursue that right through the private cause of action.

Some larger questions are presented by the ruling. With traditional Medicare, information regarding a potential recovery is reported through the Mandatory Insurer reporting mechanism. The Medicare, Medicaid and SCHIP Extension Act of 2007 have mandated electronic reporting be completed by RREs or those responsible for payment. The acceptance of ongoing responsibility for medical benefits and the settlement itself are required to be provided. From that information, Medicare begins its recovery efforts against those who failed to protect its interests. However, without an mandate requiring reporting information to extend to Part C plans, it would appear that MAOs must rely on the beneficiary or their representative to advise that a settlement has occurred.  Will CMS now expand the recipients of Mandatory Insurer Reporting to include Part C plans?

Assuming that MAOs now have the same rights as traditional Medicare and that their recovery rights ripen on the fact of settlement, judgment or award, is it permissible to satisfy the lien before settlement? If so, can this be done by the primary payer or by the beneficiary pursuant to the policy of insurance? Clearly, logistical questions abound. For the time being, the law applies only in the Third Circuit. But, if adopted by the other Circuits it appears that CMS will have yet another technical challenge on its hands. Clearly, mindful MAO organizations will now step up their recovery efforts based upon the case.

Download the MSP Compliance Protocols user guide today!

About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

Frequently, my colleagues and I are asked to define what the Centers for Medicare and Medicaid Services (CMS) consider ‘late reporting’ under the Medicare Medicaid State Children’s Health Insurance Program Extension Act (MMSEA) Section 111. Neither CMS or the Coordination of Benefits Contractor (COBC) has specified when, how or by whom the late filing penalties specified by Section 111 will be applied.

However, in reviewing the question, it becomes evident that the following terms, often used interchangeably, become confused: compliance, timeliness and late reporting.

The February 24, 2010 CMS Alert defines compliance as “punctual submission of quarterly claim input files which after the initial reporting cycle, are of sufficient quality which consistently follows CMS data submission protocols producing data that can be adequately processed and used.” In other words, the RRE must submit Claim Input files on their assigned quarterly submission date in a format acceptable to the Secretary for more than one consecutive quarter.

Timeliness of reporting is specified in the Non-Group Health Plan (NGHP) User Guide version 3.3 in Section 11.10.2.  Total Payment Obligation to the Claimant (TPOC) settlements, judgments, awards or other payments are reportable when the injured party to (or on whose behalf) payment will be made has been identified and the TPOC amount for that individual has been identified. Should these criteria not be met as of the TPOC date, documentation should be retained evidencing when they had been met and the corresponding date reported in the ‘Funding Delayed Beyond the TPOC Start Date’ field which is contained within a record submitted in a Claim Input file during the RRE’s assigned quarterly submission period.

If an RRE has accepted ongoing responsibility for medicals (ORM) on a claim two events must be reported. The first is the assumption of ORM and the second is the corresponding end date reflected in the ORM Termination Date.

Section 12.4 of the NGHP User Guide advises that a claim record submitted to, and accepted by CMS as an ‘Add’ record may be indicated as “late” in the Claim Response via a ‘Compliance Flag’ code. Unlike error codes which indicate rejection, Compliance Flags mean that the record had been processed but non-compliant with Section 111 reporting requirements.

A Compliance Flag 01 indicates that the most recent TPOC Date on an ‘Add’ record received in a quarterly claim file submission is late if the TPOC Date is more than 135 days older than the start date of that same file submission period.

A Compliance Flag 03 indicates that the accepted ‘Add’ record received in a quarterly claim file submission is late if the ORM Termination Date is more than 135 days older than the start date of that same file submission period.

It’s important to note that Compliance Flag codes are only applied to records with an ‘Add’ Action Type which receive a 01 (accepted with ORM) or 02 (accepted no ORM) Disposition code in the Claim Response and do not apply to accepted ‘Update’ or ‘Delete’ Action Type records.

Therefore, “compliance” refers to the RRE’s overall conformity to Section 111 filing requirements, “timeliness” refers specified timeframes regarding reporting of ‘Add’ records and Compliance Flags act as notifications to the RRE of non-compliant (late) records  which are tracked by COBC.

The May 1, 2012 CMS Alert ‘Restrictions on Additional File Submissions Lifted’, now removes the ‘Multiple files submitted’ Threshold Error. Previously, this Threshold error suspended the processing of additional Claim Inputs, if more than one were submitted during the RRE’s assigned submission period. Although intended to expedite electronic reporting of ORM Termination Dates, lifting of this threshold is not restricted solely to this purpose.

Allowance of multiple claim file submissions without restriction as to transaction type will inevitably lead to further confusion and may likely result in reassessment by CMS regarding specification and application of late reporting penalties.

Gould and Lamb is the global leader in MSP compliance offering first in class mandatory insurer reporting services. For questions or more information, please contact: Reporting Services Department at: 866.672.3453 x1122  or mirservice.support@gouldandlamb.com.

(NGHP) User Guide Version 3.3

About the Author: John Miano is the Manager of Reporting Services for Gould & Lamb, LLC. His primary responsibility is directing the implementation of CMS Section 111 reporting programs for our clients. He has over 20 years experience in the Property and Casualty Insurance Industry and is currently an active committee member of the International Association of Industrial Accident Board Committees (IAIABC). He is also a former Executive Board Member of the Association of Workers Compensation Claim Professionals (WCCP) and is a Board Certified Workers Compensation claim adjuster (CWC).

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

The United States District Court for the District of Oregon, Portland Division recently published its opinion in the case of Oregon State Bar Professional Liability Fund v. United States Department of Health and Human Services and Kathleen Sebelius on March 29, 2012. At issue was whether the Oregon State Bar Professional Liability Fund (PLF), the insurer covering legal malpractice actions against Oregon attorneys, was an “applicable plan” required to report under Section 111 on the Medicare, Medicaid and SCHIP Extension Act as a Responsible Reporting Entity (RRE).

In July of 2010, the PLF wrote a letter to the Department of Health and Human Services requesting a formal opinion that the Reporting Act did not apply to the it. Secretary Sebelius responded by advising PLF that it was a “liability insurer” within the meaning of the Extension Act. The PLF then filed suit requesting a declaratory judgment that PLF was not an applicable plan, that the Secretary acted outside her authority in determining that PLF was an RRE, that the Secretary violated the Administrative Procedure Act in that determination, and that the District Court could review the Secretary’s decision concerning the PLF.

The Secretary moved for summary judgment arguing that the Medicare statutory scheme left no issue of material fact for the trial court. In short, the United States took the position that the Medicare Secondary Payer Act and the federal regulations empowering it were clear that the PLF, as a liability insurer, was subject to Mandatory Insurer Reporting.

In denying the government’s motion, Judge Marco A. Hernandez analyzed the role of professional liability insurance and made what appear to be several leaps of logic regarding its applicability to Medicare Secondary Payer issues and the reporting obligation. The court determined that PLF was, in fact, a liability insurer within the meaning of 42 USC 1395y(b)(2). However, the judge reasoned that because the insurance plan covers claims against attorneys who cause economic damage relating to the provision of legal services and does not cover claims of tortious conduct that result in bodily or emotional injuries the PLF does not become an RRE. Because PLF would “never have primary responsibility” for medical items claimed by a beneficiary, they are excused from the reporting obligation.

Interestingly, the judge acknowledged that a malpractice case “could” involve medical expenses paid conditionally by Medicare. However, he assumed that those injuries occurred as the result of the underlying accident or case being handled by the alleged negligent attorney. The judge failed to recognize that the nature of the malpractice alone could give rise to emotional or personal injuries. He further stated that the PLF does not cover bodily or emotional injuries. A close review of Medicare statutes and policy guidance indicates that insurance coverage is not what Medicare requires to be reported in a settlement involving a Medicare beneficiary but, rather, what is claimed and released in the process. Thus, if bodily or emotional injuries are claimed and released, the reporting obligation is triggered. Based upon a somewhat limited analysis of an automobile accident case, Judge Hernandez determined that the PLF was not the type of plan that Congress intended to saddle with the reporting obligation.

Based on the foregoing, the court determined that the alleged violation of the Administrative Procedure Act and whether the Secretary acted outside her authority were moot.

As of this writing, an appeal has not been filed by the United States. However, I fully expect that the decision will be appealed as the ruling seems to both misconstrue the arguments put forth by the United States and the legislative intent of the MMSEA. Judge Hernandez seems to assume that because he cannot envision a scenario in which Medicare’s interests would be raised by inadequate legal representation that they do not exist. A closer look at the intent underlying the MMSEA and the Medicare statutory scheme suggests differently.

Download the MSP Compliance Protocols user guide today!

About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

When a Responsible Reporting Entity (RRE) submits records for the quarterly claim report to CMS and these records are accepted, where does the data go?  How is it utilized and what potential issues may arise? One assumes that there is a single system or database for this information.  In fact, there are multiple systems involved.

Records submitted and accepted where on-going responsibility for medical (ORM) was assumed results in creation of the injured party’s Common Working File in the Coordination of Benefits Contractor’s (COBC) database. The ICD-9 coding passed in the claim record establishes those medical conditions for which the RRE has authorized or approved on-going medical care or treatment.

Records submitted and accepted that report the event of a Total Payment Obligation to the Claimant (TPOC) indicate the occurrence of a settlement, judgment, award or other payment (intended to resolve or partially resolve a claim). The ICD-9 coding passed in the claim record establishes those conditions claimed and/or released. This TPOC data is passed by COBC directly to an external database with the Medicare Secondary Payer Recovery Contractor (MSPRC).

MSPRC’s Role

The COBC provides notification to MSPRC of the injured party and accident information per the Common Working file within 48 hours. The MSPRC issues a ‘Rights and Responsibilities’ letter to the RRE and injured party within 45 days, notifying of CMS’ rights of recovery regarding its conditional payment lien (CPL). When MSPRC is notified of a TPOC, a demand letter is issued. Following the final demand from MSPRC, should full repayment not be received within 60 days, interest begins to accrue and an ‘Intent to Refer’ letter is issued. If repayment is not resolved within 120 days of the final demand, the unresolved debt is referred to the Department of Treasury for litigation.

Potential Issues

Litigation

Should the injured party not repay the CPL within 120 days post issuance of the final demand letter, the Department of Treasury is empowered to recover double damages, interest and attorney fees.  Per 42 USC 1395 (y)(b)(2)(B) the Federal Government may bring an action against any responsible party, including the RRE.

Disruption of Benefits

Medicare Beneficiaries may contact the RRE or Claims Administrator advising of disruption of benefits.

This disruption may be due to improper ICD-9 coding (too general or incorrect conditions identified). In this scenario, contact with the RRE’s EDI Representative may aide in correction until the RRE’s next quarterly claim input file may be submitted containing the correct ICD-9 coding in an updated record.

Another cause for disruption may be assumption of ORM; COBC may advise the beneficiary that the RRE must close their claim by terminating ORM. This may be accomplished via telephone contact with COBC and subsequent reporting of the ORM Termination Date in the RRE’s next quarterly claim input file submission.   Extreme caution should be exercised to ensure that ORM has truly ended prior to engaging COBC.

Lastly, human error, lack of communication and/or training may result in disruption. Medical providers or the COBC may misinterpret ICD-9 coding or lack appropriate communication and/or training to recognize which medical conditions the RRE had assumed ORM for and/or released pursuant to TPOC.  In this scenario, the RRE or Claim Administrator may only offer the beneficiary the remedy of appealing these denials via the established process with COBC.

Conclusion

MMSEA Section 111 Reporting involves many subsystems and external databases with other government entities and contractors. Data quality, communication and training are critical at all levels to ensure timely reporting and accurate delivery of benefits to the injured party / beneficiary.

Gould & Lamb continues to work with CMS in exchanging quality data and resolution of industry challenges, such as injured party benefit disruption. As the COBC and MSPRC are now the responsibility of the same contractor, there is reason to be optimistic regarding improved processes and performance.

About the Author: John Miano is the Manager of Reporting Services for Gould & Lamb, LLC. His primary responsibility is directing the implementation of CMS Section 111 reporting programs for our clients. He has over 20 years experience in the Property and Casualty Insurance Industry and is currently an active committee member of the International Association of Industrial Accident Board Committees (IAIABC). He is also a former Executive Board Member of the Association of Workers Compensation Claim Professionals (WCCP) and is a Board Certified Workers Compensation claim adjuster (CWC).

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.