MEDICARE MANDATORY REPORTING: Keeping Your Company in Compliance with the Medicare, Medicaid and SCHIP Act Mandatory Reporting Requirements

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MEDICARE MANDATORY REPORTINGKeeping Your
Company in Compliance with the Medicare, Medicaid
and SCHIP Act Mandatory Reporting Requirements

• McAnany, Van Cleave Phillips, P.A.

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MEDICARE MANDATORY REPORTING MMSEA CHANGES IN
2009

• What is Medicare?
• What is CMS?
• What does Medicare Secondary Payer Mean?
• When is Medicare Secondary?
• What is Section 111 Mandatory MSP reporting?
• What is an MSA?

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What is Medicare?

• Medicare is a federal program that pays for
  certain covered health care provided to enrolled
  individuals age 65 and older, certain disabled
  individuals, and individuals with permanent
  kidney failure.

4
What is CMS?

• CMS the Centers for Medicare Medicaid
  Services is an agency of the Federal
  government, part of the Department of Health and
  Human Services.
• The CMS is responsible for the oversight of the
  Medicare program, including implementing the
  Section 111 MSP reporting provisions.

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What is Medicare Secondary Payer?

• Medicare Secondary Payer ("MSP") refers to
  situations where another entity (such as a
  liability or a workers compensation insurance
  carrier) is required to pay for covered services
  before Medicare does, and must do so without
  regard to a patients Medicare entitlement.

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What is Medicare Secondary Payer?

• Medicare has been a secondary payer to workers
  compensation benefit payments since the inception
  of the Medicare program in 1965.
• Additions to Medicare law and regulations
  referred to as the MSP provisions were enacted
  in the early 1980s and have been modified several
  times since then.
• These provisions were amended again by Section
  111 of the Medicare, Medicaid and SCHIP Extension
  Act of 2007 the MMSEA Section 111 mandatory
  reporting requirements. See 42 U.S.C. 1395y(b)
  (Section 1862(b) of the Social Security Act) and
  42 C.F.R. Part 411.

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When is Medicare the Secondary Payer?

• Medicare is a secondary payer to liability
  insurance (including self-insurance), no-fault
  insurance and workers compensation insurance.
• If one of these entities is responsible for
  payments of medical treatment to an injured
  person (primarily responsible), then Medicare is
  secondarily responsible for such payments.

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When is Medicare the Secondary Payer?

• If Medicare were to make payments for an injured
  individuals medical care when liability
  insurance (including self-insurance), no-fault
  insurance or a workers compensation insurance
  plan was primarily responsible for such payments,
  then Medicare has a cause of action against the
  primarily responsible party/carrier for recovery
  of the amounts Medicare paid (conditional
  payments).

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Conditional Payments

• Any payment that the CMS has improperly paid on
  behalf of a Medicare beneficiary.
• Payment is made by Medicare on the condition
  that the CMS will be paid back the full amount of
  the payment at the time of settlement
• 42 C.F.R. 411.25 If a third party payer learns
  that CMS has made a Medicare primary payment for
  services for which the third party payer has made
  or should have made primary payment, it must give
  notice to Medicare.
• Notice is given by contacting the CMS
  Coordination of Benefits Contractor (COBC) to
  initiate the opening of an MSP potential recovery
  case (1-800-999-1118)

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Conditional Payments - Medicare as the Secondary
Payer Right to Recovery

• 42 U.S.C. 1395y(b)(2)(B)(iii) In order to
  recover payment made under this subchapter for an
  item or service, the United States may bring an
  action against any or all entities that are or
  were required or responsible to make payment with
  respect to the same item or service (or any
  portion thereof) under a primary plan (i.e.
  liability or work comp insurance carrier,
  self-insured or TPA).
• Additionally, CMS has a right of action to
  recover its payments from any entity, including a
  medical provider, supplier, physician, attorney,
  state agency or private insurer that has received
  a primary payment.
• The United States may collect double damages
  against any such entity. (double the amount of
  the conditional payment lien)
• Pay and Chase methodology for recovery

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Medicare Conditional Payment Recovery in Action
US v. Harris

• United States sued a plaintiffs attorney
  (Harris) for failing to pay off a Medicare
  conditional payment lien
• Product liability lawsuit involving a Medicare
  beneficiary who fell off of a defective ladder
• CMS paid 22,500 in treatment (conditional
  payment)
• Case settled for 25,000
• CMS requested reimbursement of 10,253.59

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Medicare Conditional Payment Recovery in Action
US v. Harris

• Harris failed to reimburse Medicare within 60
  days
• Harris moved to dismiss the case claiming he
  couldnt be sued and be held individually liable
  for the debt
• Court said that didnt work, Medicare can pursue
  any entity for recovery

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US v. Harris Lessons learned

• Any entity includes insurance carrier, defense
  attorney, TPA, employer (self-insured or
  otherwise)
• To any liability, workers compensation, personal
  injury or other bodily injury settlement, ensure
  that Medicares conditional payment lien is
  handled
• Suggestions
• Name Medicare as a payee to settlement check
• Directly question plaintiff/claimant to determine
  Medicare status and if Medicare has made any
  payments
• Contact MSPRC to see if a conditional payment
  lien exists
• Use settlement and release language that shifts
  burden upon the plaintiff/claimant to handle
  conditional payment lien

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Medicares Aggressive Conditional Payment
Recovery Stance

• Practical effects
• Makes bodily injury cases more difficult to
  settle
• Difficult to negotiate conditional payment lien
• Even more difficult just to find out what it is
• Medicare does not give credence to apportionment
  of fault/defensible cases when negotiating lien
  all or nothing approach
• Force parties to trial in order to get a judicial
  determination of fault

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Medicares Aggressive Conditional Payment
Recovery Stance

• Case example
• WC (or Premises Liability) case 66 year old
  injures himself on a slip and fall
• 50 chance that it is a completely defensible
  case i.e. no notice (WC) or open and obvious
  (Prem. Liab.)
• Medicare pays 30,000 for medical treatment due
  to hip replacement
• Settlement is agreed upon for 40,000
• If the lien is worked out with Medicare before
  settlement, Medicare will negotiate and recognize
  the costs to obtain recovery (i.e., may drop
  recovery by 33 for attorney fee) 20,000
  (still a barrier to settlement)
• If lien is not worked out before settlement,
  Medicare will ask for the full amount of the lien
  because Medicare is taking a direct action
  against the primary plan and could ask for double
  damages 60,000

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Medicares Aggressive Conditional Payment
Recovery Stance

• How far out can Medicare claim a right to
  recovery for a conditional payment?
• Answer Arguably, there is a 3 year statute of
  limitations that would preclude Medicare from
  recovering on any conditional payment that was
  made from the date of the item or service
  provided. (perhaps only pertains to Group Health
  Insurance and not Non-group Health such as WC or
  liability plans)
• Or it could be 6 years under 28 U.S.C. 2415(a)
  (action for money damages brought by US), which
  would accrue from the later of 1) the date of
  payment or 2) the date Medicare learns that there
  was a primary payer which should have made the
  payment

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So Where are We? Welcome to Life Under the MMSEA

• The MMSEA of 2007. (Medicare, Medicaid SCHIP
  Extension Act of 2007)
• What is Section 111 Mandatory MSP Reporting?
• The MMSEA Section 111 USER GUIDE v.1.0
• http//www.cms.hhs.gov/MandatoryInsRep/Downloads/
  NGHPUserGuide031609.pdf

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The MMSEA? What is Section 111 Mandatory MSP
Reporting? Why are we so concerned?

• Section 111 of the Medicare, Medicaid, and SCHIP
  Extension Act of 2007 (MMSEA) (P.L. 110-173),
  adds new mandatory reporting requirements for
  liability insurance (including self-insurance),
  no-fault insurance, and workers' compensation. 
  See 42 U.S.C. 1395y(b)(7) (8).
• These are the new provisions for Liability
  Insurance (including Self-Insurance), No-Fault
  Insurance, and Workers Compensation found at 42
  U.S.C. 1395y(b)(8) that require mandatory
  reporting to CMS of bodily injury cases that
  involve a Medicare beneficiary.

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The MMSEA? What is Section 111 Mandatory MSP
Reporting? Why are we so concerned?

• It adds reporting rules does not eliminate any
  existing statutory provisions or regulations. 
  The new provisions do not eliminate CMS's
  existing processes if a Medicare beneficiary (or
  his/her representative) wishes to obtain interim
  conditional payment amount information prior to a
  settlement, judgment, award, or other payment.
• MMSEA does not change anything about how Medicare
  Set-Aside (MSA) Trusts are handled
• MMSEA does not make MSAs mandatory for liability
  cases
• MMSEA does include a penalty of 1,000 per day
  per claim for failure to report a reportable
  claim to Medicare

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The Responsible Reporting Entity RRE

• Who must report
• "an applicable plan."  "The term 'applicable
  plan' means the following laws, plans, or other
  arrangements, including the fiduciary or
  administrator for such law, plan or arrangement
  (i) Liability insurance (including
  self-insurance). (ii) No fault insurance. (iii)
  Workers' compensation laws or plans."
• These entities are called Responsible Reporting
  Entities or RREs.

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Are You an RRE?

• Are you an RRE?
• Third party administrators (TPAs) are never RREs
  for purposes of 42 U.S.C. 1395y(b)(8) liability
  (including self-insurance), no-fault, and
  workers compensation reporting and only act as
  agents for such reporting.
• The RRE is limited to the applicable plan and
  may not by contract or otherwise limit its
  reporting responsibility although it may contract
  with a TPA or other entity for actual file
  submissions for reporting purposes.
• The applicable plan (RRE) must either report
  directly or contract with the TPA or some other
  entity to submit data as its agent. (Where an RRE
  uses another entity for claims processing or
  other purposes, it may wish to consider
  contracting with that entity as its agent for
  reporting purposes).

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Are You an RRE?

• Q I am a TPA for an insurance carrier. Am I an
  RRE?
• A No. The carrier is the RRE.
• Q I am a TPA for a large self-insured employer,
  am I an RRE?
• A No. The self-insured employer is the RRE.
• Q If I am a TPA as described above, can I
  perform reporting for my contracted carrier or
  self-insured?
• A Yes. However, CMS has stated that the
  underlying responsibility (i.e. penalties)
  remains with the RRE. Thus, we anticipate
  contractual/indemnification agreements need to be
  put in place between RREs and TPAs to address who
  is responsible for reporting and/or penalties

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Are You an RRE?

• Q My company is self-insured up to a deductible
  of 100,000 for workers compensation losses,
  thereafter the carrier pays 100. We pay dollar
  one for everything up to 100,000? Am I an RRE?
• A Yes, for claims under 100,000 that involve
  Medicare beneficiaries. Once the claim reaches
  the deductible, however, the carrier is the RRE.
• Q My company has a deductible of 50,000 for
  commercial general liability losses. The carrier
  pays dollar one up front and the carrier
  administers the claim, we simply reimburse the
  carrier once the claim is complete. Am I an RRE?
• A No. The carrier is the RRE for any loss here,
  regardless of the total amount of the loss.

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Are You an RRE?

• Are you an RRE?
• RREs will register on-line through the
  Coordination of Benefits Contractors (COBCs)
  secure website. This begins May 1, 2009 and runs
  through June 30, 2009. This is not up yet.
• Once an RRE's registration application is
  submitted, the COBC will begin working with the
  RRE to set up the data reporting and response
  processes. COBC will assign a Section 111
  Reporter ID to each registered RRE.

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What claims do I have to report?

• Bodily injury claims that involve a Medicare
  beneficiary
• Who is a Medicare beneficiary?

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Who is a Medicare beneficiary?

• How someone becomes a Medicare beneficiary
• 65 years of age or older
• Has been Entitled to Social Security Disability
  (SSDI) benefits for greater than 24 months
• Entitlement date comes after 5 full calendar
  months have passed from the Disability date.
• Disability date is often the date of accident
  or the date the claimant stopped working.
• In other words, Medicare eligibility comes in on
  the first day of the calendar month 29 months
  after the date Disability for Social Security
  Disability.
• End stage kidney failure

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Determining an Individuals Medicare Status

• Beginning May 1, 2009, CMS will implement a
  beneficiary verification system that will be
  available through a query function on its new
  database
• The query function will provide a method whereby
  a SSN can be submitted to the database via a file
  submission, and CMS will respond with a response
  file indicating whether the SSN can be identified
  as belonging to a Medicare beneficiary
• Good no longer have to deal with attempting to
  determine Medicare status of plaintiff/claimant
  by conventional means (requesting from claimant
  attorney)
• Bad Responsibility is now squarely on RREs and
  TPAs to determine eligibility status no excuses

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What claims do I have to report?

• What triggers reporting?
• Bodily injury to a Medicare beneficiary.
• When is reporting required?
• Once a payment obligation is established.
  (Settlement, judgment, award or other payment)
• Other payment includes initial
  payment/acceptance of medical treatment expenses
  under a work comp policy
• Once payment obligation is terminated (i.e.
  closure of case including closure of future
  medical)

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What claims do I have to report?

• Injuries that occur after July 1, 2009 to a
  Medicare beneficiary
• If its a wc case, must report when you take on
  medical responsibility. Also, if you close
  medical later, you must report when you close
  medical (i.e. pay out a full and final
  settlement)
• If its a liability case, must report when you
  pay the settlement, judgment or award

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What claims do I have to report?

• What about injuries that occur after July 1, 2009
  that do not involve a Medicare beneficiary?
• No requirement to report so long as the
  individual is not a Medicare beneficiary
• However, as soon as the individual does become a
  Medicare beneficiary, if medical is open (ORM)
  then the claim becomes reportable once the
  individual becomes Medicare eligible
• Example WC case, date of accident 01/02/2010.
  Claimant is 20 years old at the time. Medical is
  left open for life. 45 years later claimant
  becomes Medicare eligible due to his age -gt claim
  is required to be reported in 2055 or Claimant
  becomes Medicare eligible in 2030 due to
  application and receipt of SSD benefits -gt claim
  is required to be reported in 2030.
• Special Exception next slide

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What claims do I have to report?Special
Exception Rule

• Special exception rule to reporting claims
• if the RRE obtains a signed statement from the
  injured individuals treating physician that
  he/she will require no further medical items or
  services associated with the claim/claimed
  injuries, regardless of the fact that the claim
  may be subject to reopening then the claim may
  be closed
• No report if not a Medicare beneficiary
• Send termination report if claimant is Medicare
  beneficiary
• Page 31 of USER GUIDE v1.0

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What claims do I have to report?

• Injuries that occurred before July 1, 2009
• If there is open medical responsibility (ORM) on
  a file, and the claimant is now a Medicare
  beneficiary, you must report this claim (CMS is
  giving RREs until October of 2010 to obtain and
  report this data)
• No date given by CMS as to how far back RREs must
  look (could go past 1960) i.e. 20 year old
  injured in WC accident in 1956 medical left
  open 20 year old is now 73 and Medicare eligible
  with open medical from WC gt claim must be
  reported
• This also includes claims that are currently open
  paying medical from a recent injury and
  settlement is anticipated soon after July 1,
  2009.
• Qualified Exception Rule see next slide

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What claims do I have to report?Qualified
Exception Rule

• Qualified Exception Rule
• For Ongoing Responsibility for Medical (ORM)
  assumed prior to July 1, 2009, if the claim was
  actively closed or removed from current claims
  records prior to January 1, 2009, the RRE is not
  required to identify and report that ORM
• Page 52 of USER GUIDE v1.0

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What claims do I have to report?

• Q Is there a dollar minimum for claims that are
  required to be reported?
• A Yes
• For liability cases and work comp cases where no
  medical has been paid, settlements involving
  Medicare beneficiaries that are less than 5,000
  do not need to be reported. (through Dec. 2010)
  2,000 for 2011, 600 for 2012

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What claims do I have to report?

• Q Is there a dollar minimum for claims that are
  required to be reported?
• A Yes
• For work comp med only cases, if medical payout
  is less than 600, then no reporting is required.
• CMS is still actively soliciting data for
  purposes of a more liberal threshold for med
  only claims

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What claims do I have to report?

• Work comp, auto accident, general liability
  bodily injury case to a Medicare beneficiary.
  Compensability of injury is denied for medical or
  legal reasons. You send the plaintiff/claimant
  out for an independent medical examination by
  your expert witness physician and pay the expert
  witness 750 for the evaluation. Does this
  constitute an other payment which would trigger
  reporting?
• No. No reporting here. However, if the case
  goes forward and a verdict or award is given in
  favor of the plaintiff, or the case is settled,
  payment of the award or settlement would trigger
  reporting despite the fact that no medical other
  than the expert was paid.

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What claims do I have to report?Examples

• A Medicare beneficiary is injured on the job on
  2/15/09 and files a work comp claim. Work comp
  assumes responsibility for ongoing medicals
• The claim is still open as of July 1, 2009.
• Report? Yes. By October 2010.
• Why? Ongoing responsibility for medical exists
  as of July 1, 2009 for Medicare beneficiary.

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What claims do I have to report?Examples

• Same facts as before, except wc case settles in
  June 2009 full and final
• Report? No.
• Same facts as before except wc cases settles in
  June leaving medical open
• Report? Yes, by October 2010. Only have to
  report responsibility for ongoing medical, dont
  have to report settlement.

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The MMSEA? What is Section 111 Mandatory MSP
Reporting? Why are we so concerned?

• What must be reported 
• the identity of a Medicare beneficiary whose
  illness, injury, incident, or accident was at
  issue as well as such other information specified
  by the Secretary to enable an appropriate
  determination concerning coordination of
  benefits, including any applicable recovery
  claim.
• See Input Claim File Layout

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The MMSEA? What is Section 111 Mandatory MSP
Reporting? Why are we so concerned?

• When/how reporting must be done
• In a form and manner, including frequency,
  specified by the Secretary.
• Information shall be submitted within a time
  specified by the Secretary after the claim is
  resolved through a settlement, judgment, award,
  or other payment (regardless of whether or not
  there is a determination or admission of
  liability).
• Data reported for purposes of Section 111 by RREs
  will be submitted electronically to the COBC
  secure website.
• Upon registration, RREs will be given a 7-day
  window once per quarter in calendar year in which
  to complete all reporting
• Claims that become reportable (trigger) 45 days
  before the 7- day window must be reported in that
  quarters window or penalties may apply
• Claims that trigger within 45 days of the RREs
  7-day window fall under a grace period and are
  not required to be reported until the following
  quarter

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Why do I need to know about this legislation?

• If you are an RRE for purposes of Section 111,
  federal law requires that you report
  appropriately. CMSs focus is on obtaining
  complete and accurate data.
• Their penalty for failure to report a claim is
  1,000 per day per violation. Consequently, it
  is important that all business entities,
  including the self-employed and self-insured, to
  determine if they are an RRE for purposes of
  Section 111 reporting.

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Purpose of the Registration Process

• Responsible Reporting Entities (RREs) will
  provide notification to the COBC of their intent
  to report data in compliance with the
  requirements of Section 111 of the MMSEA.
• Registration by the RRE must be completed before
  testing between the RRE (or its agent) and the
  COBC can begin.
• Although an RRE may use an agent for reporting
  purposes, the RRE itself must complete the
  registration process directly.

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Purpose of the Registration Process

• Through this registration process, the COBC will
  obtain the information needed to
• Certify the registrant is a valid RRE for
  Section 111
• Assign a Section 111 Reporter ID to each RRE
• Develop a Section 111 reporting profile for each
  RRE, including estimates of the volume and type
  of data to be exchanged for planning purposes
• Assign a production live date and file submission
  timeframe to each RRE
• Establish the necessary file transfer mechanisms,
  and
• Assign a COBC Electronic Data Interchange
  Representative (EDI Rep) to each RRE to assist
  with ongoing communication.

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The Registration Process

• RREs will register on the COBSW (Coordination of
  Benefits Secure Website) from May 1, 2009 through
  June 30, 2009. Details on how to complete the
  Section 111 registration process on the COBSW is
  now available at
• www.Section111.cms.hhs.gov

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The Registration Process

• An Authorized Representative will complete and
  submit the registration for the RRE using a new
  Internet-based application on the COBSW. The
  Authorized representative must have the legal
  authority of the company to bind the company to a
  contract and the terms of MMSEA Section 111
  requirements and processing.
• Authorized Representative will go to
  www.Section111.cms.hhs.gov to register.
• After registration application is submitted, the
  information provided will be validated by the
  COBC.
• A letter with an assigned RRE ID and a PIN, along
  with a contract will be sent to the Authorized
  Representative.
• The Authorized Representative, using the RRE ID
  and PIN will then log back in and can then
  designate an Account Manager

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The Registration Process

• The Account Manager
• Will log in to the COBC using the RRE ID and PIN
• Enter personal information (name, job title,
  address, phone, e-mail)
• Create a Login ID for the website
• Enter information about expected reporting volume
  
• Select a file transmission method https (secure
  server), ConnectDirect, other software
• Can enter the Reporting Agents (TPA, other
  agent) name and contact info
• The Account Manager will be the administrative
  contact for the RRE and will control the overall
  account profile.

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The Registration Process

• Each RRE must complete the registration process
  regardless of whether a Reporting Agent will be
  submitting files on that entitys behalf.
• A Reporting Agent may not complete the
  registration for a Responsible Reporting Entity.

78
RREs and Agents

• Step 1 - RRE signs up and designates an
  Authorized Representative. Authorized
  Representative is most likely an
  employee/manager/vice-president of the RRE
• Step 2 - RRE will assign an Account Manager.
  Account manager will set up individual log-in
  accounts. May designate an agent such an a TPA
  to do reporting.
• Individual log-in personnel will submit
  reportable claims files during 7 day window.
• Individual log-in personnel can submit SSNs to
  the query database once per month.

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Website for Information

• http//www.cms.hhs.gov/MandatoryInsRep/
• To become a subscriber to receive updated
  information provided by Medicare to the website
• Go to Related Links Inside CMS at the bottom of
  the page
• Click on the hyperlink For e-mail updates and
  notifications
• COBC Secure Website for registration and
  reporting www.Section111.hhs.gov

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Timeline for implementation of MMSEA

• 01/01/09 - 06/30/09 Recommended systems
  development period.
• 05/01/09 - 06/30/09 Electronic registration via
  the COBSW for all liability/no-fault/workers
  compensation RREs.
• 07/01/09 - 09/30/09 Testing period for all
  liability/no-fault/workers compensation RREs.
• 10/01/09 - 12/31/09 All liability/no-fault/worker
  s compensation RREs submit their first Section
  111 production files based upon a predetermined
  schedule with the COBC.
• 01/01/10 All liability/no-fault/workers
  compensation RREs will be submitting Section 111
  production files by this date. Penalties begin
  for failure to report.

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Computer Based Training

• Computer Based Training courses designed for
  RREs will be made available on the CMS website
  (they are not currently available).
• The CBT is designed to help RREs (and agents)
  with the actual reporting process.
• They are offered free of charge.

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Computer Based Training

• Heres what the CMS says about the CBT courses
• Our CBTs include in depth training on MMSEA
  Section 111 reporting requirements, file
  transmission, file formats, and file processing.
• Courses are broken down into manageable, easy to
  comprehend modules.  Each CBT includes a course
  completion time so you will know exactly how much
  time you'll be spending before you begin.
• Training is self-managed, allowing you to learn
  at your own pace, anytime and anywhere you have a
  computer with an internet connection.
• Once you have registered, you will be provided
  with a curriculum of CBT courses allowing you to
  choose the classes you need.

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Computer Based Training

• If you are an RRE, registration for the courses
  may be made by contacting the COBCs EDI
  Department at 646-458-6740. An EDI
  representative will take your company name,
  company type (e.g. liability insurer including
  self-insured entities, workers' compensation,
  etc.) and the name, phone number and e-mail
  address for the individual(s) you would like to
  register. 
• Once the COBC has processed your request, you
  will be registered.  The NGHP curriculum is not
  currently accessible, but registrants will be
  notified automatically as soon as NGHP CBT
  courses are available.