What are conditional payments?  How and when should payers respond to Conditional Payment Letters, Notices and Demands? What happens if you don’t? Our Chief Compliance Officer Dan Anders and Director of MSP Compliance Services Ada Lopez covered these topics and much more in our February 7 webinar.  Here’s a quick recap.

How does Medicare know who the primary payer is … or that a case has settled?

The Medicare Secondary Payer Act was written to protect the Medicare Trust Fund. And the Centers for Medicare and Medicaid Services developed Coordination of Benefits (COB) rules and processes to keep Medicare from paying for treatment that is covered by a primary payer (workers’ compensation, liability, no-fault). If Medicare has made a payment for which a primary payer exists, then such a payment is considered conditional, meaning it is conditioned upon reimbursement to the Medicare Trust Fund.

Most commonly, CMS learns that a primary payer for a Medicare beneficiary’s claim exists through these Section 111 reporting triggers:

• Acceptance of Ongoing Responsibility for Medical (ORM), usually in a WC or no-fault claim
• Total Payment Obligation to Claimant (TPOC), typically a settlement

Timeliness and accuracy are keys to protecting the payers who are the Responsible Reporting Entities (RREs)

• ORM and TPOC should be reported via Section 111 every quarter.
• As of Oct. 11, 2024, RREs will be subject to penalties if ORM or TPOC are reported more than 365 days late. (Link to Penalty blog)
• Report valid ICD-10 codes:
  • For ORM, report only diagnosis codes that are accepted on the claim.
  • For TPOC, only report diagnosis codes that are released as part of the settlement.
  • Be careful to report only codes that apply to the claim. (Medical bills and records often contain non-claim-related ICD-10 codes.)

Conditional payment recovery

The webinar took a deep dive into the processes and communications the Benefits Coordination & Recovery Center (BCRC) and Commercial Repayment Center (CRC) deploy to obtain reimbursements. Dan and Ada also discussed ways to dispute conditional payment notices and demands.  It’s worth requesting a recording of the session from Dan (daniel.anders@towermsa.com) just to get this information.

Some best practices for conditional payments

• Make sure claims are accurately and timely reported for ORM and TPOC.
• Update ICD-10 codes when additional body parts are accepted or denied or they need correction.
• Terminate ORM when appropriate, e.g., settlement.
• Identify your Medicare-eligible claimants.
• Immediately review and act on conditional payment correspondence and meet the deadlines!
• Make sure settlement terms specify who is responsible for conditional payments post-settlement.
• When a Demand is received, either pay or appeal. Pay attention to Conditional Payment Letters (CPLs) and Conditional Payment Notices (CPNs) and take action on them, but do not pay before the Demand.
• Be sure to respond to the Demand on time. Otherwise, the debt will eventually be transferred to the U.S. Treasury.
• Follow-up with the CRC or BCRC to ensure payment was received and applied to the debt and that no debt remains.

If you don’t work with conditional payments on a daily basis, consider partnering with Tower for conditional payment identification, resolutions and appeals. And, if you have any questions about conditional payments, even on specific claims, or any other MSP compliance issues, Dan Anders is happy to answer them.  Email daniel.anders@towermsa.com.

Also, let us know what areas of MSP compliance you would like us to cover in future Premier Webinars. We want to help you.

The Centers for Medicare and Medicaid Services has announced that Total Payment Obligation to Claimant (TPOC) Section 111 reporting must include Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs) effective April 4, 2025.  This means CMS will require workers’ compensation payers to report MSA amounts, even if $0, concurrently with settlement amounts, when the TPOC date is April 4, 2025 and later. See CMS’s February 23 Technical Alert for details.

CMS previously explained this significant expansion in a November 13, 2023 webinar (See CMS to Require Section 111 Reporting of WCMSA Amounts).

In the February alert, CMS reiterates that this new reporting requirement aims to improve coordination of benefits for Medicare beneficiaries.  Specifically, if a WCMSA is reported, then the WCMSA will be considered primary for payment before Medicare.

Notably, the WCMSA reporting requirement applies to both CMS-approved and non-approved MSAs.  The rule will be prospective only, meaning it applies to TPOC dates of April 4, 2025 and later.

To collect this data, CMS is adding new fields to the Section 111 Claim Input File. This information must be reported if the reported insurance type is workers’ compensation and the TPOC amount is greater than $0. Here is a look at the new fields:

• MSA Amount: This will be either $0 or an amount greater than $0.  If an annuity is used, then the “total payout” is reported.
• MSA Period: If the MSA amount is greater than $0, you need to enter the number of years the MSA is expected to cover the beneficiary.
• Lump Sum or Structured/Annuity Payout Indicator: If the MSA amount is greater than $0, you will enter “L” for a lump-sum MSA or “S” for a structured/annuity MSA.
• Initial Deposit Amount: If an annuity, then the MSA seed amount is reported.
• Case Control Number (CCN): If an MSA is submitted to CMS for review or is otherwise submitted to CMS post-settlement, it will be assigned a CCN.  The CCN is entered in this field, although this is optional.
• Professional Administrator EIN: If the MSA includes a professional administrator, enter the Employer Identification Number of the professional administrator here.  If a professional administrator EIN is not provided, the “case administrator” defaults to the beneficiary.  If the EIN submitted does not match a registered administrator account in the Workers Compensation Medicare Set-Aside Portal (WCMSAP), then “case administrator” will also default to the beneficiary.

CMS also provided a table of error codes if errors are identified in the above-reported information.

Testing of the new fields will be made available to Responsible Reporting Entities (RREs) beginning on October 7, 2024.

Key Takeaways

The data CMS requires to be reported is not commonly captured in payer and TPA claims systems.  Consequently, claims systems must be updated with the new fields and claims professionals will need to be trained on when, how, and what to enter into these fields.

Tower will work with our Section 111 reporting clients to provide further technical information on reporting these fields, including testing. We can also assist with capturing this data for reporting purposes.

Questions remain over what CMS will do with this data once it has it.  What if the Section 111 reporting data contradicts the CMS-approved MSA data?  If a non-CMS approved MSA exhausts prematurely (meaning the funds were insufficient to cover the number of years the MSA was to cover), will CMS step in and pay for injury-related medical care, or will they claim that it was underfunded?  If they claim that it was underfunded, does the individual have a right to challenge such a determination and how does that process work?

CMS states that this technical alert, with additional information, will be incorporated into an April 2024 version of the MMSEA Section 111 Mandatory Reporting User Guide.  We will provide further updates with the release of that document.

Please get in touch with Chief Compliance Officer Dan Anders at (888) 331-4941 or daniel.anders@towermsa.com with any questions.

The Centers for Medicare and Medicaid Services (CMS) issued a series of updates over the past month, which include an updated NGHP Section 111 User Guide, the latest Top 10 Section 111 Reporting errors, and its 2024 conditional payment recovery threshold.  We have summarized these for you below.

Updated NGHP Section 111 User Guide

CMS released NGHP User Guide Version 7.4, which incorporates the Section 111 civil monetary penalties rule into Section 5.1 of Chapter III: Policy Guidance of the guide. See our most recent update on Section 111 penalties in Recap of CMS Section Penalties Webinar.  CMS includes the following in the guide:

The occurrences to be audited will include both Section 111 submissions and records from sources outside of the Section 111 reporting process, to ensure that CMS does not miss those situations where an RRE has entirely failed to report the occurrence. RREs will only be informed when there is a potential instance of non-compliance.

In short, CMS will be auditing untimely reporting through Section 111 and reviewing reports outside of Section 111 to determine if there was a failure to report at all.

Top 10 List of Section 111 Reporting Errors

CMS released a chart of the Top 10 Section 111 Non-Group Health Plan Reporting Error Codes from 7/1/2023 to 12/15/2023.  The top three reporting errors were:

• TN – 99: No matching, valid TIN Reference File Detail Record was found for the TIN/Office Code combination on the Claim Input File Detail Record.
• CI05 – Invalid Diagnosis Code 1.
• SP49 – No previously accepted record can be matched to the submitted delete. Delete failed.

These issues are what CMS calls “hard errors,” meaning the record will be rejected.  Remember that if a record is rejected and not timely corrected, it could be subject to Section 111 civil monetary penalties for untimely reporting.

$750 Threshold Kept for Reporting and Conditional Payment Recovery

In a February 14, 2024 alert, CMS announced that the 2024 conditional payment recovery threshold for liability, no-fault and workers’ compensation settlements will remain at $750. Accordingly, Total Payment Obligations to the Claimant (TPOCs) in the amount of $750 or less do not need to be reported to CMS through the Section 111 Mandatory Reporting process. Nor will CMS attempt to recover conditional payments for TPOCs of $750 or less (The threshold does not apply to liability settlements for alleged ingestion, implantation or exposure cases.)

By way of background, pursuant to the SMART Act of 2012, CMS must determine a threshold amount each year to ensure the collection cost stays within the amount recovered through such efforts.

Please get in touch with Tower’s Chief Compliance Officer, Dan Anders, with any questions at (888) 331-4941 or daniel.anders@towermsa.com