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

Tune-up your conditional payment resolution processes with Tower’s Feb. 7 webinar!

Medicare conditional payment resolution should be a standard practice when settling workers’ compensation or liability claims that involve an injured worker or claimant who is a Medicare beneficiary.  While most settling parties recognize this obligation, many have questions about Medicare Secondary Payer (MSP) Medicare conditional payment requirements, conditional payment policies, the practices of CMS recovery contractors, and the role of the Treasury Department in debt recovery.

For the answers, join Tower for a complimentary webinar on Wednesday, February 7, at 2:00 PM ET. Dan Anders, Tower’s Chief Compliance Officer, and Ada Lopez, Director of Medicare Secondary Payer Compliance Services will tell you when and how to:

• Communicate with the Commercial Repayment Center (CRC) instead of the Benefits Coordination and Recovery Center (BCRC).
• Investigate conditional payments.
• Respond to Medicare conditional payment recovery correspondence.
• Dispute and appeal conditional payment demands- What works, what doesn’t work, and what sometimes works.
• Resolve Treasury Department debt recovery actions.
• Work with Tower to investigate, dispute and resolve conditional payments.

A Q&A session will follow the presentation and you can submit questions now.

Please click the link below and register today!

Note there is no CEU credit offered for this webinar.

Register Here

On January 18, 2024, the Centers for Medicare and Medicaid Services (CMS) held a Section 111 Civil Monetary Penalties webinar to provide important information on timelines, non-compliance definitions and safe harbors associated with the rule.

A copy of a screenshot of the webinar slides can be found here.

Some key points made during the webinar:

• • • October 11, 2024, is the Final Rule applicability date that starts the 365-day clock. From October 11, 2024 on, CMS expects records to be submitted in a timely manner.
    • On April 1, 2026, CMS will begin quarterly compliance audits by reviewing a random sample of new RRE records added since January 1, 2026.
    • To determine compliance, CMS will compare the date a TPOC record is accepted against the date CMS should have received the record. CMS provided several examples of compliance vs. non-compliance in the slides.
    • CMS will randomly select 250 new and accepted records per quarter to audit. These will be divided between group health and non-group health records.
    • Both Section 111 and self-reported submissions will be included in the audit. CMS emphasized that it will review other reporting methods to determine if there has been a failure to report, not just late reporting through Section 111.
    • TPOC and ORM are considered separate reporting obligations for purposes of audits and penalties.
    • A record must be reported and accepted to meet the rule’s timeliness requirement. For example, if a report is made without a diagnosis code, it will not be considered accepted.
    • The rule is prospective only – it does not consider retroactive reporting. This is an important point.  TPOC and ORM dates prior to October 11, 2024, which are reported more than 365 days after when they should have been reported, will not be subject to penalties.
    • The rule in no way changes reporting requirements.
    • The Informal Notice of a potential penalty will be emailed to the RRE’s Authorized Representative and the Account Manager.
    • Within 30 days of receipt of the Informal Notice, the RRE must respond with mitigating factors to CMS imposing a penalty.
    • A Formal Notice to Impose a CMP will be sent to the Authorized Representative by certified mail. The RRE will then have access to the appeals process.
    • As previously explained, there is a tiered approach to penalties. That is, penalties increase when the report is more than one year, two years, and then three years late. These are inflation-adjusted with the 2024 rates:

$1,000 (after three years late) = $1,428 /per day

$500 (after two years late) = $714/per day

$250 (after one year late) = $357/per day

• • • CMS will update the NGHP User Guide in the near future to incorporate the CMP rule.

Tower will update you as CMS implements the penalty rule over the next two years.

Prior Tower articles: CMS Section 111 Penalties Rule Focuses on Untimely Reporting and CMS Releases FAQs on Section 111 Penalties

As we start the new year, here’s a look at the top five Medicare Secondary Payer (MSP) compliance stories of 2023 and what to watch for in 2024.

 A Look Back

Centers for Medicare and Medicaid Section 111 Penalties Rule Released

The long-awaited Section 111 penalties rule was published in October. Surprisingly, the final rule was more narrowly focused than the proposed version. Now, only untimely reporting (defined as one year later than it should have been reported) of Ongoing Responsibility for Medicals (ORM) and Total Payment of Claim (TPOC) is at risk for potential penalties. Not only that, not all claims that run afoul of the rule will be penalized. CMS will incorporate a randomized selection process to identify records for audit. Finally, CMS’s rule only applies prospectively, that is, with reportable data on October 11, 2024, and later.

See CMS Section 111 Penalties Rule Focuses on Untimely Reporting and CMS Releases FAQs on Section 111 Penalties for more details.

CMS to Require Section 111 Reporting of WCMSA Amounts

In a November 16, 2023 webinar, CMS announced plans to require the report of a Workers’ Compensation Medicare Set-Aside (WCMSA) amount concurrently with the report of TPOC in Section 111 Mandatory Insurer Reporting.  While CMS can presently coordinate post-settlement Medicare benefits when they receive settlement documents with an MSA amount, except for CMS-approved MSAs, this is not required.

CMS wants to close this information gap with a requirement to disclose an MSA amount included in a workers’ compensation settlement whether CMS approved the MSA or not. In the webinar, CMS indicated it would like to have the new reporting fields in place by January 2025.  This represents a technical and training challenge for Responsible Reporting Entities (RREs), who will now have to capture and report this data along with the currently required information.

More information can be found in our article, CMS to Require Section 111 Reporting of WCMSA Amounts.

Amended Reviews Open to All MSAs

Tower had urged CMS for some time to drop the past 60-month time requirement for an Amended Review and open it up to any prior WCMSA determination. We were pleased when CMS ended the 60-month requirement in May. It now allows a one-time Amended Review when a case meets this criteria:

• CMS has issued a conditional approval/approved amount at least 12 months prior.
• The case has not yet been settled as of the date of the request for re-review.
• Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

Further information can be found in CMS Significantly Expands Amended Review MSA Availability and MSA Amended Reviews – Key to Settlements of Old Dog Legacy Claims

Option for Unsolicited Response File on ORM Record Changes

Starting in July 2023, RREs had the option to receive a monthly NGHP Unsolicited Response File through the Section 111 secure website. The Unsolicited Response File provides the RRE with changes made to ORM records by the Benefits Coordination and Recovery Center (BCRC), which were not requested by the RRE, but rather are typically in response to communication with the claimant. The file allows the RRE to update or correct its reporting dataor report to the BCRC that the action taken is inconsistent with the RRE’s legal obligations in relation to ORM.

See Section 7.5 of the NGHP Section 111 User Guide, Chapter IV, Technical Information, for further information on the NGHP Unsolicited Response File.

Medicare Conditional Payment Appeals Guide

While it did not break any new ground on bases to appeal Medicare conditional payments, the April release of the NGHP Applicable Plan Appeals Reference Guide represents an important move toward CMS transparency around demand letter appeals. The guide clarifies both the policy and process for RREs or their representatives in submitting such appeals. Notably, Tower referenced the guide in successfully appealing a Medicare conditional payment demand before a CMS Administrative Law Judge.

A copy of the guide can be found here.

What to Watch for in 2024

Section 111 Penalties Implementation:  As the data to be considered for Section 111 penalties is October 11, 2024 and later, there is no possibility of a penalty being issued in 2024 (as the data must be reported one year late). When it released the rules, CMS stated that it would have further policy announcements and webinars. This includes a January 18, 1:00 pm ET, informational webinar. Details on the webinar can be found here.

Section 111 Reporting of WCMSA Amounts: CMS has tentatively set the start date for reporting WCMSAs as January 2025. The planned timeframe is for an updated file layout and error codes to be released in early 2024, with testing in the fall of 2024. CMS is expected to issue written guidance along with webinars on the topic.

New MSPRP Portal Features:  CMS has indicated it will continue introducing new Medicare Secondary Recovery Portal features. We will be on the lookout for these throughout 2024.

Medicare Beneficiary Appeals Guide:  In 2023, CMS released an appeals guide for NGHP plans to appeal Medicare demands from the Commercial Repayment Center. We expect CMS will also release a similar document for Medicare beneficiaries to appeal demands from the BCRC.

Finally, there will surely be other CMS announcements during the year. As always, we will provide you with summaries and key takeaways.

Best wishes from your friends at Tower for a healthy, happy, and prosperous new year! Remember to contact our Chief Compliance Officer Dan Anders with questions about any MSP compliance and MSA issues. Reach him at daniel.anders@towermsa.com.

Tower wishes you a happy holiday season filled with peace, joy and laughter! We hope you can connect with loved ones and have time to relax and recharge.

This is a time to reflect on the past and prepare for new opportunities in the upcoming year. As we do this, we are filled with gratitude for our clients and other partners. We cherish these strong relationships and deeply appreciate the opportunity to work closely with you.

May your holidays be merry, your New Year prosperous … and your settlements smooth!