There was much expectation that the Centers for Medicare and Medicaid Services (CMS) would meet the February 18, 2023 deadline to release a final rule on Section 111 reporting civil money penalties (CMPs). However, it was not to be.  CMS extended its deadline for publishing the final rule by a year to February 18, 2024.

Recall that the purpose of the rule is to set out specific criteria for when CMS may impose penalties for what it considers a failure to report or improper reporting.  A summary of the proposed rule can be found here.

In the notice, CMS explains the reason for the extension:

. . . We are not able to meet the initial targeted 3-year timeline for publication due to delays related to the need for additional, time-consuming data analysis resulting from public inquiry. It was not possible to conclude this data analysis on the initial, targeted timeline for the proposed rule because public listening sessions raised additional concerns that CMS believed were important to properly and thoroughly research prior to publishing the final rule. We have decided that it is critical to conduct additional analysis about the economic impact of the rule. We are preparing additional data analysis and predictive modeling to better understand the economic impact of the proposed rule across different insurer types. This data analysis is designed to review the actual current reporting and model potential penalties that would be imposed were the final rule in place. Along with delays resulting from the agency’s focus on the COVID- 19 public health emergency, we determined that additional time is needed to address the complex policy and operational issues that were raised. We are extending the publication deadline so as to provide the most accurate, complete, and robust data possible to confirm the intent and economic impact of the final rule.

Practical Implications

Besides not having to worry about penalties for another year, we are pleased CMS is taking the time to complete a data analysis of the impact of its penalty regulation.  While in its initial regulatory announcement, CMS indicated its rule would not have a significant economic impact, we, as well as others, noted in our comments to the proposed regulation that the authority to impose penalties of up to $1,000 per day per claim could lead to millions of dollars of penalties on even one claim.  This is most definitely a significant economic impact.

As required by law, CMS will eventually make its penalties rule final and issue penalties.  Accordingly, while we await that final rule, you have been granted more time to ensure the accuracy and timeliness of your reporting.

Current Tower Section 111 reporting partners have access to our Section 111 Management Dashboard, which gives you complete visibility into your claims from a global level all the way down to specific claims.  This, along with our standard error reports and consultation on error correction, is the best path forward to eliminate the potential for CMS to impose penalties.

If you do not yet partner with Tower for Section 111 reporting, now is an excellent time to consider the benefits of a platform which seamlessly manages Section 111 reporting, conditional payments, Medicare Set-Aside triage, clinical and legal interventions, MSA preparation, and CMS submission activities.  Don’t hesitate to contact Tower’s Chief Compliance Officer, Dan Anders, at 888.331.4941 or daniel.anders@towermsa.com, with any questions.

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People in the MSP compliance business rattle off acronyms and abbreviations, such as AWP, MMSEA, and TPOC like it’s second nature. People immersed in Section 111 reporting and Medicare Set-Asides understand the abbreviations, but most people listening to us do not. So, here’s a quick cheat-sheet (or handy guide) to frequently used acronyms and their meanings:

Common MSP Acronyms and Abbreviations

AWP – Average wholesale price:  The AWP is a Red Book pricing reference for prescription drugs. The lowest AWP is used to calculate Medicare Part D drugs in a Workers’ Compensation Medicare Set-Aside (WCMSA).

BCRC – Benefits Coordination & Recovery Center: This contractor to the Centers for Medicare and Medicaid Services consolidates the activities that support the collection, management, and reporting of other primary insurance coverage for Medicare beneficiaries.  In short, it manages the MMSEA Section 111 reporting program and pursues conditional payment recovery when the claimant Medicare beneficiary is the debtor.

CMS – Centers for Medicare and Medicaid Services:  The federal government agency oversees the Medicare program.  CMS’s Division of MSP Program Operations directly manages CMS’s Medicare Secondary Payer (MSP) enforcement programs.

COB – Coordination of Benefits:  The coordination of benefits (COB) program aims to identify the health benefits available to a Medicare beneficiary and to coordinate the payment process to prevent mistaken payment of Medicare benefits.

CRC – Commercial Repayment Center: This CMS contractor pursues conditional payment recovery when the self-insured entity or the insurer is the identified debtor.

CWF – Common Working File: CMS uses this tool to maintain national Medicare records for individual beneficiaries enrolled in the Medicare program.  For example, a funded CMS-approved workers’ compensation Medicare Set-Aside (WCMSA) will trigger a marker in the CWF, so Medicare will not pay for care covered by the WCMSA.

LMSA – Liability Medicare Set-Aside: General term for an MSA in a liability case settlement.

MBI – Medicare Beneficiary Identifier:  The Medicare Beneficiary Identifier (MBI) is the identification number replaced SSN-based health insurance claim numbers (HICNs) on all Medicare transactions, such as Medicare cards, billing, claim submissions and appeals.

MIR – Mandatory Insurer Reporting:  Another term for MMSEA Section 111 reporting.

MMSEA – Medicare, Medicaid, SCHIP Extension Act of 2007: Section 111 of this act added mandatory reporting requirements regarding Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards, or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation, collectively referred to as Non-Group Health Plan (NGHP) or NGHP insurance.

MSA – Medicare Set-Aside: An account used to pay for injury-related and Medicare-covered medical services and prescription medications. It is a portion of a settlement that is reserved or “set-aside” for this purpose.

MSP – Medicare Secondary Payer: This is the term generally used when the Medicare program does not have primary payment responsibility, that is when another entity, such as workers’ compensation or liability insurance or a group health plan, is responsible for paying before Medicare.

MSPRP – Medicare Secondary Payer Recovery Portal: A web-based tool designed to assist in the resolution of liability insurance, no-fault insurance, and workers’ compensation Medicare recovery cases.

NGHP – Non-Group Health Plan: Typically used in reference to Section 111 reporting, NGHP includes liability insurance (including self-insurance), no-fault insurance, and workers’ compensation.

ORM – Ongoing Responsibility for Medicals:  This refers to the Responsible Reporting Entity (RRE) paying for the injured party/Medicare beneficiary’s ongoing medical treatment associated with the claim.

RO – Regional Office:  A CMS RO is assigned to each WCMSA case (based on the claimant’s state of residence); that RO makes the final determination of the appropriate funding level for the WCMSA.

RRE: Responsible Reporting Entity: The applicable plan, namely the NGHP, responsible for Section 111 reporting to CMS.

SSDI – Social Security Disability Insurance: Pays monthly benefits to workers who can no longer work due to a significant illness or impairment that is expected to last at least a year or result in death within a year.

SSN – Social Security Number: A numerical identifier assigned to U.S. citizens and other residents to track income and determine benefits.

TPOC – Total Payment Obligation to the Claimant: For Section 111 reporting purposes, CMS uses the term TPOC to refer to the dollar amount of the total payment obligation to, or on behalf of, the injured party in connection with the settlement, judgment, award, or other payment in addition to/apart from ORM.

WCMSA – Workers’ Compensation Medicare Set-Aside: This is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease.

WCMSAP – Workers’ Compensation Medicare Set-Aside Portal: The WCMSAP may be used to submit and view WCMSA proposals, to communicate about the review approval process, and to submit re-review requests. Users can also view the status and balance of an established WCMSA and submit annual attestations and detailed transaction records.

WCRC – Workers Compensation Review Contractor: This CMS contractor reviews all submitted WCMSAs and advises the CMS Regional Office whether the proposed WCMSA is sufficient, or a higher or lower amount is recommended.

Starting July 2023, Responsible Reporting Entities (RREs) can access updates/changes that another source has made to their claims for Ongoing Responsibility for Medicals (ORM).  The Centers for Medicare and Medicaid Services (CMS) announced this in an update to its MMSEA Section 111 NGHP User Guide, Version 7.0.

It may surprise insurers and self-insurers that the ORM data they report through Section 111 reporting can be modified by the Benefits Coordination and Recovery Center (BCRC), which coordinates benefits on behalf of CMS. For example, suppose a claimant contacts the BCRC and advises that they are being denied medical care due to an open ORM (ORM indicates the RRE accepts the claim). In that case, the BCRC may update the ORM record to indicate that medical has been terminated (especially if the claimant indicates the case has been settled).

The RRE needs to be notified of this action to correct its reporting or to advise the BCRC that this was an erroneous change to the record.

Presently, and in our experience, the BCRC typically issues a letter to the RRE advising of the change it made to the ORM status.  Starting this summer, RREs can also access these changes through Section 111 reporting. The revised user guide states:

Effective July 2023, RREs will be able to opt in via the Section 111 secure website to receive a monthly NGHP Unsolicited Response File. This will provide critical information about updates to ORM records originally submitted in the last 12 months and allow RREs to either update their internal data or contact the Benefits Coordination & Recovery Center (BCRC) for a correction.

This report will provide the source of the record modification and the reason for it. This should eliminate confusion when the BCRC changes ORM reporting data.

Other Updates to Section 111 User Guide

CMS included these other updates in Version 7.0 of the user guide:

• Sections 6.4.2, 6.4.3 and 6.4.4. of Chapter III: Policy Guidance indicated CMS would maintain the $750 reporting threshold for physical trauma-based liability insurance settlements and the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals.
• In Chapter IV: Technical Information besides the aforementioned ability to, as of July 2023, obtain an NGHP Unsolicited Response File, CMS put in place the following changes:
• Information on recovery agents was clarified to emphasize that such agents need written authorizations to pursue any post-demand actions (Section 6.3.1).
• Recovery agents may now view the Open Debt Report on the Medicare Secondary Payer Recovery Portal (MSPRP), if the agent has an active MSPRP account with a TIN matching one submitted on the RRE’s TIN Reference File (Section 6.3.1.2).
• ORM Termination Date field number 79 was corrected for the Event Table (Section 6.9.1).

As Tower is a recovery agent for many of our clients, the ability to download a copy of the Open Debt Report will be helpful in monitoring CMS’s ongoing recovery actions.

• Finally, CMS updated Chapter V: Appendices as follows:
• The CP13 soft edit policy limit amount has decreased from $1000 to $500 (Appendix F).
• For the TIN Reference File, the Go Paperless Indicator is no longer required when submitting the Recovery Agent TIN (Field 25) (Appendix G).

If you have any questions on these updates, don’t hesitate to contact Tower’s Chief Compliance Officer, Dan Anders, at Daniel.anders@towermsa.com or 888.331.4941.