A View From The Top

Volume 1, Issue 2   •   March 2009

As we continue to work our way through the CMS Secondary Payer mandatory reporting requirements under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007, we are closing in on the May 1, 2009 registration deadlines and also contemplating the actual data to be reported.

At VCM, we continue to be closely involved with this issue both from the regulatory standpoint as well as from the technology developments needed to comply with these requirements to continue support the healthcare professionals we value as clients, partners and colleagues. 

This is our second of three consecutive issues of our newsletter dedicated solely to each of the three major deadlines outlined in Section 111. 

What follows is our Phase II analysis of the Section 111 reporting requirements for liability insurance (including self-insurance), no-fault insurance, and worker’s compensation.  In other words – what happens now that the Responsible Reporting Entity (RRE) is registered?

What is the testing phase of this process?  What is the monthly query report?  What needs to be reported in the initial report to CMS?  What triggers reporting of a file to CMS?  These are the questions which we will be answering in Phase II of our newsletter.

Clare Bello

clare.bello@vcm-llc.com

SECONDARY PAYER REPORTING:

Timeline Reminders:

Phase I – May 1, 2009 – the RRE must begin registration with CMS.  Reminders for Registration:  (From the VCM Phase I Newsletter, February 2009).
Identify the entit(ies) which need to be registered as the RRE;
Identify how many RRE ID numbers your program will require;
Identify the RRE Authorized Representative who can register the entity with CMS;
Identify the Account Manager for the RRE, who will need to be identified in the registration process;
Register the RRE(s) beginning May 1, 2009, but no later than June 30, 2009.

Phase II – July 1, 2009 – the RRE (or its agent) begins the testing phase of the implementation process.  This will also include compilation of required data for the initial report to CMS by each RRE.

Phase III – October 1, 2009 (poss. January 1, 2010) – the RRE (or its agent) will be required to begin submitting regular quarterly reports to CMS to the extent that they are registered and testing is successful.  CMS has provided an extension to the testing period to allow programs to begin to report on January 1, 2010, if they need additional time for testing after the October deadline.  The extension does not extend the deadline for RRE registration in May or for initial testing to begin in July.  (CMS March 20, 2009 Alert).

Since our last newsletter, on March 16, 2009, the formal “MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting, Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation USER GUIDE” was issued.  In addition, CMS has issued an update and supplement to the User Guide, dated March 20, 2009.  We will be looking to these documents in connection with this issue of the Newsletter.

WHAT AND WHEN DO WE REPORT?

First and foremost, while these reporting requirements are mandatory for all lines of insurance, including medical and general liability claims, they are limited to:

Any settlement, judgments, awards or other payments;

Includes the assumption of an on-going responsibility for payment of medicals (ORM).

Made to or on behalf of a Medicare Beneficiary;

People age 65 or older;
People under age of 65 with certain disabilities; and
People of all ages with End-Stage Renal Disease.

For any claim in which medicals are claimed and/or released. 

If medicals are claimed and/or released, the settlement judgment, award or other payment must be reported regardless of any allocation made by the parties or a determination by the court.
(CMS NGHP User Guidelines, pp. 10, 49, 55-57).

CMS has identified very lengthy and stringent reporting data points for each claim that falls into the definition above.  Many of these data points are new to certain types of claims management and will require that a program be compiling data between now and July 1, 2009 to back fill their open files on one hand; and working through the physical technology of the upload process to CMS, on the other hand.  This is where we focus our Phase II analysis.

July 1, 2009 Testing Deadlines

There are two parts to the testing phase of compliance under the CMS Reporting Guidelines:  (1) The Quarterly Required Reports; and (2) The Monthly Queries.  Each of these serve a different function under the guidelines and each has different testing and reporting guidelines to be implemented.

However, before you begin to worry about the actual file upload and testing phase of the implementation process there are several key decisions regarding the data collection and reporting that the RRE needs to have in place well before the May 1, 2009 registration process begins:

Who and how will the RRE report to CMS?  Is this a process that the RRE can manage through its own internal resources or does there need to be an outsourcing of the reporting functions?
The RRE registration process performed by the RRE requires the RRE to know who and through which method the report uploads will occur.

What data is currently collected and in a reportable format in the RRE’s current claims system; and
If there is information which CMS requires that is not currently contained in the RREs files which were open as of January 1, 2009, then how will that information be collected and added to the existing open files?

Recommended Step 1: Determine the method and/or agent you intend to use to accomplish the data uploads on behalf of your RRE.  This needs to be done prior to the May 1, 2009 registration deadlines as both of these pieces of information need to be provided as part of the registration process.

Once the RRE ID(s) are established, the RRE can begin to work with the reporting agent to compile any missing information required for reporting in the RRE’s initial report to CMS.  Data points, such as the collection of Social Security Numbers, birth dates and gender for every claimant and/or the Tax ID Number for every plaintiff law firm representing claimants in a file.  It is very important that the RRE work with their agent between May 1, 2009 and July 1, 2009 to back fill the information which will need to be reported to CMS for existing open files.  Collecting and adding information to existing open files for the initial formal report to CMS will be a time consuming prospect, so be sure to allow as much time as possible for this stage of the compliance implementation.

Recommended Step 2: Identify data needed to comply with CMS data fields in the CMS NGHP User Guidelines and begin to compile the data to get the data entered into the claim system or files prior to the start of the July 1, 2009 testing period.

Quarterly Reports

The quarterly file uploads are electronic reports to CMS for the purpose of identifying either the responsibility to make medical liability payments; or to report indemnity payments already made to a Medicare beneficiary for the settlement of medical expenses.

Single Indemnity Payment
In the case where there is a single indemnity payment made in satisfaction of a claim or suit to a Medicare Beneficiary in which medicals were claimed and/or resolved, the indemnity payment must be reported to CMS in the quarterly upload file.  (CMS NGHP User Guidelines, pp. 45; 50).

Because there is a single indemnity payment obligation (even if it is a structured settlement), the resolution of the claim would result in a single report made to CMS after the indemnity payment has been made.  (CMS NGHP User Guidelines, p. 50).

The challenge lies in collecting all of the required data fields for each of these reports for the upload to CMS.  Our final newsletter will discuss the required fields by CMS which are new to the claims industry and will require new processes to collect and report.

On-going Responsibility for Medicals (ORM)
In those situations where the RRE agrees to pay medical bills for additional or on-going treatment, as part of the resolution of the claim, CMS requires an initial report to inform CMS that the obligation to make those payments has been accepted by the RRE.  (CMS NGHP User Guidelines, p. 50).

Once the obligation to make those payments ends, an update to the original file is sent to CMS, informing them of the total amount paid and the date when the obligation ceased.  If there were additional indemnity dollars paid to settle the case, they are included in the updated report to CMS.  (CMS NGHP User Guidelines, p. 50).

So what does that mean for the initial report to CMS this year?  Well, it means that for every file that is open as of January 1, 2009, the RRE needs to know:

Which Claimants are Medicare Beneficiaries; and
Which files are open in which there is a responsibility accepted to pay on-going medical bills by the RRE.

In the initial report to CMS, each RRE ID will have to provide the initial reporting of all claims which are open as of July 1, 2009, for which there is an existing ORM and which were open as of January 1, 2009.  (CMS NGHP User Guidelines, p. 35, 52).

Recommended Step 3:  Perform an open file analysis to determine those files which will have an on-going ORM as of July 1, 2009, thus triggered reporting to CMS.  Also, the program must be prepared to begin tracking all settlements and ORMs on all files beginning July 1, 2009, which is the trigger date under the regulations.

Monthly Queries

Because the required reporting is triggered with the requirement that the claimant be a Medicare Beneficiary, one of the critical questions asked in the implementation process has been:  How can the RRE know if the claimant is a Medicare Beneficiary?

CMS has provided the RREs and their agents with the ability to submit a query file once per month containing very basic information regarding a claimant in order to determine whether the claimant is a Medicare Beneficiary.  (CMS NGHP User Guidelines, p. 67).

The query must include:

SSN
First initial of the first name
First 6 characters of the last name
Date of birth
Gender

In order for the query to provide a match, the SSN must match 100% and three out of the other four criteria must also match.  If the claimant is a Medicare Beneficiary a record will be returned to that effect containing the HICN, which should then be used by the RRE in any quarterly reports to CMS on this file.  (CMS NGHP User Guidelines, p. 67-68).

If a claimant is not a Medicare Beneficiary at the time a claim is opened, CMS does impose a continued obligation upon the RRE to monitor whether or not the claimant becomes a Medicare Beneficiary through the life of the claim.  (CMS NGHP User Guidelines, p. 40).  As such, best practices would be to run a query each month for each open claimant who has not been identified as a Medicare Beneficiary.

It is critical that the information required to run queries on all claimants; in all files open as of January 1, 2009 and still open as of July 1, 2009; be collected to allow for the queries to be completed.

The testing for the data uploads will begin July 1, 2009.  The testing requirements are fairly stringent and there are data integrity thresholds which must be met in order move the RRE from a testing status to an operational RRE ready to file formal reports.  As there may be data issues and upload issues, it is important that your RRE and/agent be prepared to begin testing as soon as possible after the registration process is completed and as soon after July 1, 2009 as possible.

CMS has acknowledged that the testing phase may take longer than the original three months allotted and as such, has provided some flexibility at the end of 2009 for an RRE to complete its testing process.  (CMS March 20, 2009 Alert).  However, the extension does not delay the requirement for RREs to be registered between May 1, 2009 and June 30, 2009. 

Once the testing phase of the implementation is complete, the initial quarterly report and queries will be the last phase of this implementation.  If the testing is successfully completed before the RREs reporting period during the Fourth Quarter of 2009, the initial report must be submitted between October 1, 2009 and December 31, 2009.  If the testing is not completed prior to October 1, 2009, then the initial report will be due in the quarter beginning January 1, 2010.

Changes to Claims Management

Because many of the data collection requirements are different from claims data collected prior to these compliance requirements, all programs will need to make adjustments to their claims handling procedures.

For example, in order to run a query to determine if a claimant in a Medicare Beneficiary, the reporting agent must first have their Social Security Number.  Social Security Numbers have not been collected as part of a claim file.  So, for the initial report to CMS, one question is:  How do we get those for existing open files?

If the claim is in suit, an interrogatory will work, citing the Medicare Reporting act Section 111, as the basis for compelling plaintiff’s counsel to divulge the information.  But what if they don’t voluntarily agree to provide it?  Will it require court orders to compel the production of personal information?

If the claim is not in suit, how does a program compel the production of the social security number of a claimant?  If it is a medical malpractice case, the information might be found through a medical records request.  If it is not, compelling and collecting that information may prove to be challenging for the entire insurance industry.

To date, CMS has refused to provide any “Safe Harbor” for insurers at the present time.  As such, it is not yet an option to argue all good faith efforts to obtain information failed, as a defense for a failure to know if the claimant is a Medicare Beneficiary or an inability to submit a quarterly report.  It is likely that a safe harbor will be developed as the testing phase begins and the programs begin to determine whether they can obtain the required information for the reporting and how difficult that task may prove to be.

Recommended Step 4 – Review current claims data collection and handling procedures to make necessary changes to provide for information needed for CMS Reports.

NEXT ISSUE:
PHASE III – PREPARING FOR THE INITIAL FORMAL REPORT AND QUERIES

Our final newsletter, Phase III, will be devoted solely to the data point to be collected for the initial reporting, as well as an examination of the situations in which reporting is triggered to CMS.

Look for Phase III coming in early April, 2009.

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