The Centers for Medicare and Medicaid Services (CMS) recently released Version 7.2 of its MMSEA Section 111 User Guide. The guide contains some notable updates for Ongoing Responsibility for Medicals (ORM) reporting, determination of the ORM termination date with a physician letter, and use of the NOINJ code in certain liability settlements.

Revised Trigger for ORM Reporting

CMS revised Section 6.3 (Policy Guidance) on the trigger for reporting Ongoing Responsibility for Medicals (ORM):

The trigger for reporting ORM is the assumption of ORM by the RRE, which is when the RRE has made a determination to assume responsibility for ORM and when the beneficiary receives medical treatment related to the injury or illness. Medical payments do not actually have to be paid, nor does a claim need to be submitted, for ORM reporting to be required. The effective date for ORM is the DOI, regardless of when the beneficiary receives the first medical treatment or when ORM is reported.

We surmise that CMS added the additional requirement (bolded) for reporting ORM so that allow no-fault plans do not have to report ORM on minor claims that have no evidence of medical treatment.  Workers’ compensation plans already have an exclusion for reporting ORM on minor medical-only WC claims where medical payments do not exceed $750, along with other requirements (See Section 6.3.1 of the guide).

The change raises an interesting question: What obligation does the no-fault plan have to determine if treatment has occurred?  In other words, does the no-fault plan have to actively inquire about treatment? Or can it be passive and wait to report ORM after treatment is occurring? There isn’t an answer from CMS’s ORM definition.

Determining ORM Termination Date Based on Physician Statement

CMS previously added a provision to Section 6.3.2 (Policy Guidance) which allows ORM termination based on a physician statement finding that no additional medical items and/or services associated with the claimed injuries will be required.  Apparently, a question arose about what ORM termination date to enter if such a physician letter is obtained.  Per CMS:

Where an RRE is relying upon a physician’s statement to terminate ORM, the ORM termination

date to be submitted should be determined as follows:

• Where the physician’s statement specifies a date as to when no further treatment was

required, that date should be the reported ORM termination date;

•  Where the physician’s statement does not specify a date when no further treatment was

required, the date of the statement should be the reported ORM termination date;

•  Where the physician’s statement does not specify a date when no further treatment was

required, nor is the statement dated, the last date of the related treatment should be used as the ORM termination date.

The above should clarify the appropriate ORM termination date to use when a physician statement is obtained.

Reporting of NOINJ is Now Optional

Since the early days of Section 111 reporting CMS has required liability claims where medicals are released in settlement but where the type of claim typically has no associated or alleged medical care to be reported.  Because there were no diagnosis codes to report, these claims were reported with a “NOINJ” code.  Examples of such claims were loss of consortium, an errors or omissions liability insurance claim, a directors and officers liability insurance claim, or a claim resulting from a wrongful action related to employment status action.

CMS has now revised its policy in Section 6.2.5.2 of the User Guide (Technical Information) on the reporting of such claims to state:

Note: In cases where the reporting of a liability record only meets the criteria for reporting a ‘NOINJ’ diagnosis code in Field 18, the reporting of the record is no longer required. However, it is optional for the RRE to report the record with the ‘NOINJ’ diagnosis code following the previously existing rules in the User Guide as follows:

This update is great news for carriers who have had to report these types of claims for more than a decade now.

If you have any questions on these updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at (888) 331.4941 or daniel.anders@towermsa.com

In an update to its Section 111 MSP Mandatory Reporting User Guide (Version 7.1 Chapter III Policy Guidance) CMS made clear that in a subscription insurance policy arrangement, the lead insurer is solely responsible for Section 111 mandatory reporting requirements.

The new section of the guide, Section 6.1.13 states:

In a subscription insurance policy arrangement, two or more insurers enter into an agreement whereby the risk of the insurance policy is spread among the various insurance entities in some agreed-upon ratio. In such arrangements, a lead insurer is designated for various administrative and business purposes. While there may be many co-insurers on a subscription insurance policy, there is only one lead insurer, and that lead insurer remains so throughout the policy life cycle.

 Due to the nature of the subscription insurance market and the way such policies are structured, it is appropriate for the lead insurer to act as the sole RRE as it relates to Section 111 mandatory reporting requirements. The ability for the lead insurer to act as the sole RRE is predicated on the assumption that the lead insurer will avail themselves of all rights, requirements, and responsibilities codified in statute and further set out in regulation and within this and any other sub-regulatory guidance provided by CMS, as is from time to time amended. In any such lead reporting situation, as it relates to subscription insurance policies, CMS will assume that the lead insurer, as the sole RRE, will be responsible for all applicable reporting, recovery, and benefits coordination requirements that presently exist, regardless of the existence of any other co-insurer that may enter into a subscription arrangement or similar contract with the lead insurer.

Practical Implications

With subscription insurance policies, risk is divided among two or more policies. It can be an equal split, or one company assumes more risk than another as long as the combined coverage equals 100% of the required limits.  In these arrangements, one insurer takes the lead as administrator.

Based on this policy announcement, only the lead insurer is required to complete Section 111 reporting as the sole RRE.  Other insurers are released from reporting responsibilities.

Please get in touch with Dan Anders, Chief Compliance Officer, at daniel.anders@towermsa.com or 888.331.4941 with any questions.

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.

Over the past month the Centers for Medicare and Medicaid Services issued two alerts reminding Responsible Reporting Entities (RREs) to make sure data reported through the Section 111 Mandatory Insurer Reporting process is accurate and updated. This appears to be part of an ongoing effort by CMS to avoid unnecessary Medicare conditional payment recovery efforts.

In the first alert, entitled “Reporting of Incorrect No-Fault Policy Limits” CMS states:

Responsible Reporting Entities (RREs) are accountable for ensuring the information included in their Section 111 MMSEA Mandatory Insurer Reporting submissions is accurate. There may be situations where, depending upon state law or the terms of a given policy, the policy limit may vary. In these situations, the reported Policy Limit should reflect the actual amount the RRE has accepted responsibility for at the time the record is submitted or updated. Just as important, if the Section 111 record needs to be corrected to reflect a different Policy Limit, the RRE should update the record as quickly as possible to reflect the new policy limit. For example, if a policy allows for a minimum amount of MedPay coverage and will only allow a higher amount under certain circumstances, and those circumstances are not yet met at the time of reporting, the RRE should report the lower amount. Should the criteria that triggers the higher policy limit be met after that report, the RRE should update the record as soon as possible. Reporting of an incorrect Policy Limit or failing to timely update the record can put the RRE at risk of non-compliance with the Section 111 reporting requirements.

 Inaccurate and/or uncorrected information can impact current Medicare claims payment actions. Inaccurate and/or uncorrected information also places the RRE at risk of recovery actions and increases the burden of proof upon the RRE should it attempt to dispute recovery efforts. Therefore, we advise the RRE to consider contacting their EDI Representative to submit an off-cycle Section 111 report with new policy limit information, rather than wait for their next Section 111 reporting cycle.

Practical Implications

By recommending an “off-cycle” reporting of the new policy limit, CMS is trying to avoid paying medical expenses when a primary payer, in this case, the no-fault carrier, is available to pay. (CMS has a similar recommendation in the Section 111 User Guide for an immediate report of ORM termination to the EDI representative.) If the no-fault plan can pay medical costs directly to the provider, it streamlines the system and eliminates the conditional payment recovery process.

This portion of the alert’s language raises some concern, though: “failing to timely update the record can put the RRE at risk of non-compliance with the Section 111 reporting requirements.”  While CMS has yet to issue final regulations regarding civil monetary penalties for non-compliance with Section 111 reporting requirements, in its proposal, timeliness and accuracy of reporting are factors in determining whether penalties will be imposed.

CMS could clarify this alert by stating that “failing to update the record by the quarterly reporting period following the policy change puts the RRE at risk of non-compliance.” Making failure to report “off-cycle” a basis for penalties adds confusion to a system based on quarterly reporting.  Tower will seek clarification from CMS on this point.

The second alert from CMS, “Use the Funding Delayed Beyond TPOC Start Date Field,” states:

This is a reminder that if funding is delayed after the settlement date reported in Field 80: TPOC Date, in the Claim Input File Detail Record, RREs should provide the actual or estimated date of the funding determination in Field 82: Funding Delayed Beyond TPOC Start Date.

Some RREs are failing to indicate a Funding Delayed Beyond TPOC Start Date when funds have not yet been released. This has resulted in CMS recovery demands being sent based upon the receipt of a TPOC date and TPOC amount before the funds for the settlement have been received by the beneficiary.

 As soon as CMS receives a report of a TPOC Date and corresponding TPOC Amount, CMS begins its recovery process to collect Medicare claims conditionally paid that are covered by the TPOC. The Funding Delayed Beyond TPOC Start Date is used to delay the recovery process so as not to negatively impact the beneficiary prior to receipt of the settlement proceeds.

In addition, the Funding Delayed Beyond TPOC Start Date is used to ensure an RRE is not found noncompliant with the Section 111 timeliness reporting requirements when a settlement has been made, but the final payment amount has not yet been determined or dispersed.

Practical Implications

What is not explained here is that Field 82, per the Section 111 User Guide, is to be used in specific circumstances where the amount the claimant Medicare beneficiary is to be paid is not known at the time the settlement occurs.  This happens most often in mass tort settlements.  Here is an example from the user guide:

• There is a settlement involving an allegedly defective drug.
• The settlement contains or provides a process for subsequently determining who will be paid and how much. Consequently, there will be payment to or on behalf of a particular individual and/or the amount of the settlement, judgment, award, or other payment to or on behalf of that individual is not known as of the TPOC Date.
• Timeliness of MMSEA Section 111 reporting for a particular Medicare beneficiary will be based upon the date there is a determination both that payment will be made to or on behalf of that beneficiary and a determination of the amount of the settlement, judgment, award, or other payment to or on behalf of that beneficiary.
• RREs shall submit the date of the settlement in the TPOC Date field and the date when there is a determination both that payment will be made to or on behalf of that beneficiary and a determination of the amount of the settlement, judgment, award, or other payment to or on behalf of that beneficiary in the corresponding Funding Delayed Beyond TPOC Start Date Field.

While it’s important to remind people to use Field 82 when applicable, the alert causes confusion when it refers to the date settlement funds are “dispersed.”  CMS seems to assume that the date inserted into Field 82 is not only the date that the settlement amount is determined but is the same date the funds are dispersed. However, these dates may be weeks or months apart.

We will seek clarification from CMS but based on CMS’s representation that this is the date it uses to initiate conditional payment recovery against the Medicare beneficiary claimant, we recommend placing the date settlement funds are dispersed in Field 82.

Recognizing that both alerts are somewhat technical, and questions are understandable, feel free to contact me at Daniel.anders@towermsa.com or 888.331.4941.