A View From The Top
Volume 1, Issue 4 • October 2009
Well…September 30, 2009 has come and gone and our industry continues to struggle with compliance issues and requirements which have kept some RREs from being able to complete the registration process under MMSEA Section III. The Town Hall Meetings with CMS continue to be held twice a month and questions continue to be raised which affect an entity’s ability to determine who should register as the RRE and, once registered, what exactly is required to be reported and when. Finally, CMS issued revised and updated reporting guidelines on July 31, 2009, changing more of the requirements.
This issue of our newsletter is circulated to allow all of us a chance to take a breath and summarize what has been decided, what remains an open issue, and what guidelines were amended on July 31, 2009.
Clare Bello
MMSEA SECTION III – SECONDARY PAYER REPORTING:
One of the big questions in the industry, is: What happens if our RRE did not register before September 30, 2009? Are there penalties? How do we go forward from here? Some of these questions were addressed during the September 30, 2009 CMS Town Hall Conference call.
REGISTRATION – BEGAN MAY 1, 2009 – FORMAL DEADLINE SEPTEMBER 30, 2009
This deadline has passed – but what if your RRE isn’t registered yet?
Barbara Wright of CMS indicated on the September 30, 2009 Town Hall Conference Call that CMS will not impose penalties against an RRE based solely upon an RRE not registering with CMS by September 30, 2009. The focus of CMS is to be certain that an RRE is registered with sufficient time to complete the required quarter of testing prior to the April 1, 2010 formal reporting date.
What does that mean?
It appears that CMS’ position is that penalties will not be imposed solely based upon an RRE missing the September 30, 2009 registration deadline, SO LONG AS, the RRE is registered in time to complete the testing phase and is prepared to meet the initial reporting deadline beginning in April, 2010.
CMS requires a calendar quarter for the completion of testing for an RRE prior to an entity being approved for formal reporting. As such, an RRE must be registered before year end 2009 in order to allow for the completion of testing prior to reporting on April 1, 2010 and to avoid penalties.
Continuing Open Ended Questions Halting Some Registration Progress:
Foreign RREs:
On the September 30, 2009 Town Hall conference call, one of the issues addressed was the registration and reporting process for a foreign RRE without a domestic address or US Tax ID Number. That process is still being developed by CMS and as such they recommended that foreign RREs wait to attempt to register until they have issued formal procedures.
Clinical Trials:
Again, CMS has not issued formal requirements in connection with Clinical Trials and whether medicals paid in connection with clinical trials will be reportable under Section 111.
Bill Waivers:
One of the outstanding open items to be determined by CMS is whether or not the waiver of a medical bill by a hospital is reportable under Section III. In many situations, the waiver of invoices are completely separate from the claims program and its RRE. As such, should waivers be required to be reported, many entities that would not have any obligation to register as an RRE will have to do so. Since CMS has not issued any formal position on the issue of bill waivers, many entities are hesitant to complete the registration process until it is known one way or the other whether bill waivers will be reportable under Section III.
The question surrounding whether the waiver of bills is a reportable event is a hotly contested open issue. If one looks at the language of Section III itself and the purpose stated in the reporting requirements, it is clear that the purpose of reporting under Section III is to allow Medicare to recover dollars spent as a secondary insurer for the payment of a benefit to a Medicare Beneficiary. In the situation of a waiver of a bill, provided the invoice is not submitted to Medicare for payment, there is no payment and thus, arguably, there is no recovery issue to trigger reporting obligations by the RRE under Section III.
CMS has indicated that they may require the reporting of bill waivers to identify those instances where the provider has submitted the bill for reimbursement to Medicare, while having waived the bill or a portion of the bill to the patient. Again because that issue is not related to secondary recovery, it appears to be beyond the scope of the Section III reporting requirements.
CMS has also indicated that in the instance where a visitor slips and falls in an entity, such as a hospital, and the visitor is taken to the Emergency Department and provided with some treatment/diagnostic testing, where those bills are waived, CMS considers the entity “self-insured” for that event and thus the waiver is reportable if the visitor is also a Medicare Beneficiary. However, CMS indicated in the August 18, 2009 Town Hall Conference Call that where this examination is to determine if there are injuries as part of an investigation in anticipation of a General Liability claims, then it would be considered an Independent Medical Examination (IME) and is not reportable under Section III.
In light of the unanswered questions surrounding the reporting issue of Bill Waivers, it is very difficult for an entity to decide whether they are required to register as an RRE or not. In many situations an entity may need to be registered as an RRE no matter the decision regarding the Bill Waiver issue. In that case, the RRE should move forward immediately to complete the registration and testing process in order to be compliant as of April, 2010.
If an entity, would have no reason to register as an RRE except for the reporting of the bill waivers, then the decision as to when to begin compliance becomes more difficult to address. One school of thought would be to register with CMS and be prepared to report bill waivers and should CMS decide that there is no reporting for waivers under Section III, then the RRE can deactivate the registration with their EDI Representative. The other school of thought would be to wait for CMS’ decision on the issue. This is certainly a decision which needs to be made by each entity facing the dilemma based upon that entity’s situation.
RECOMMENDATION:
As soon as it is possible for an RRE, the entity should complete the registration process with CMS. It is important to remember that your reporting agent cannot begin testing for your RRE until the registration process is completed and an email for CMS indicating that the RRE is in testing is received by the RRE.
It is also important to remember that at this point of the process, the testing process will likely take additional time to complete, as the process is new and there is a high volume of testing which needs to be completed prior to reporting.
As a reminder – the following information is required for an RRE to complete the registration process:
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;
Identify the Reporting Agent for the program;
Identify the transmission method of data to CMS, as well as an estimate of the number of paid claims expected to be reported in the next twelve (12) months.
TESTING – TWO DEADLINES
No matter who your reporting agent is, it is important to note that every reporting agent must complete a full testing phase with CMS for EVERY RRE for which they will be the reporting agent. While that testing will be cleaner and faster with a reporting agent who has undergone the testing process for other RREs, the testing does require certain steps to be performed and will take time to complete.
Deadline One – Monthly Queries:
July 1, 2009 – The testing deadline in connection with being able to run monthly queries is happening now. CMS has indicated that the test data for the query testing will be released in mid-October for use in the testing process. CMS will also allow testing for the query function through a program using its actual claimant data. CMS intends to allow the RRE to run queries in 2009 to provide information on existing files to identify those files in which there is Medicare Beneficiary; but only for RREs who are fully registered and have tested this component of the upload capabilities.
This is an important concept to consider when deciding the timing for your program’s registration with CMS. For all open files, an RRE must be able to identify who is a Medicare Beneficiary in order to prepare to collect the data CMS will require in the report of any settlement or ORM. Having the query function available prior to the end of the year will help an RRE begin to organize their open files to prepare for compliance reporting in 2010.
Deadline Two – Quarterly Claim Input:
January 1, 2010 – The quarterly claim input file is the long report of data required by CMS when an RRE either assumes responsibility for the payment of medicals (ORM) or an RRE settles a claim involving a Medicare Beneficiary. It is this report that has over 130 fields of data which must be submitted in a flat file format designated by CMS. Testing for the claim input files will not begin until January 1, 2010 and must be completed by March 31, 2010, in order to allow an RRE to be ready for formal production reporting in the quarter starting April, 2010.
An important note regarding this stage of the testing is to remember that there is an extremely large number of entities who are registering as RREs with CMS. Every single one of them will be undergoing the claim input file testing in the same three month quarter, beginning in January, 2010. As such, you need to have your reporting solution, agent or program ready prior to January 1st to allow for clean testing with CMS.
FORMAL REPORTING
Deadline: Initial formal report is due in the quarter beginning April 1, 2010.
What is in Initial Report?
TPOC Payments (Settlements): All TPOCs on or after 1/1/2010
ORM Reports (On-Going Medicals): All ORMs in existence on or after 7/1/2009
Thresholds:
There are some thresholds established, which limit reporting under Section 111 until certain amounts are met. These thresholds differ between certain lines of coverage and even between types of reporting under Section III.
A second note, in connection with the Workers’ Compensation exception, is that for the medical only claim that is not reported until there is more than $750.00 there is no way to identify timely filing within the quarterly claim input file, thus the exclusion under the reporting rules will actually generate a compliance flag. (September 30, 2009 Town Hall Call). For example, an employee is injured and the responsibility for the payment of medicals is assumed in April of 2010 – technically under the reporting requirements, the RRE is required to submit the initial ORM report to CMS indicating that the ORM has been begun. However, the claim meets all of the requirements for the exclusion from reporting and the medicals do not exceed $750.00 until June of 2010, at which time the RRE reports the ORM. There is nothing in the ORM report to indicate any amounts to alert CMS that while the ORM was accepted in April 2010, it was under the exclusion threshold until June. CMS indicates that this report would produce a compliance flag for late reporting and that the RRE must have all documentation to justify the timing of the reporting should CMS inquire about the compliance flag.
A final note in connection with the threshold amounts is that Medicare will consider files reported under an established threshold to be an error and will not accept the file for reporting. Thus, the thresholds are not optional, they are mandatory for each year identified. In many ways this is helpful in limiting the number of files to be reported, however, the thresholds themselves raise additional questions, considerations, and yes exceptions.
COMMON QUESTIONS REGARDING THE THRESHOLDS:
If I have a claim with both an ORM and a TPOC, which threshold amount applies?
CMS states that the file can be reported under the threshold and that the TPOC edit Criteria will be applied to claims reported with an ORM. (CMS NGHP User Guidelines, v. 2.0, p. 44). In other words, because an ORM is being reported and it has a $0.00 threshold, the TPOC amount will not be reviewed in connection with the required final report terminating the ORM.
What Happens if I report a TPOC under the Threshold?
If a single TPOC under the threshold is reported, CMS will reject the file with an error code. If, however, the TPOC is originally submitted at an amount over the threshold amount and is later amended to an amount below the threshold, no error code will issue. (CMS NGHP User Guidelines, v. 2.0, p. 44).
What if I have more than 1 TPOC?
For Threshold calculation purposes, the TPOCs must be combined to determine if reporting is triggered under Section III. The time for reporting is triggered as of the most recent TPOC payment to the Medicare Beneficiary. (CMS NGHP User Guidelines, v. 2.0, p. 44).
What if My RRE pays a Deductible and First Layer Of Coverage – are those calculated separately for TPOC thresholds?
No. If an RRE pays a deductible that is below the TPOC threshold and then pays an amount in the next layer of coverage that is also under the threshold amount, CMS will combine those amount to determine whether the threshold is exceed, thus requiring reporting under Section III.
WHAT EXACTLY ARE AN RRE’S OBLIGATIONS UNDER SECTION III?
Overlying all of the requirements and deadlines is the ultimate question – What is my RRE required to do and/or protect under Section III?
Our interpretation of the obligations in the reporting requirements is:
1. To know if a claimant is a Medicare Beneficiary;
2. To know if a claimant becomes a Medicare Beneficiary at some point during the life of a claim;
3. To protect any Medicare Lien prior to the payment of a settlement to a Medicare Beneficiary; and
4. To report the payment of settlement/ORM dollars to or on behalf of a claimant.
What does CMS Mean by “Protect” in Connection with a Medicare Lien?
The obligation to satisfy the lien remains with the claimant even under the Section III reporting requirements. What changes under Section III is that CMS does now require that the insurer “protect” any existing Medicare lien prior to paying a settlement. Under the recovery statutes, in the absence of protection, CMS may seek re-payment from the insurer. CMS has been clear during the Town Hall Meetings that they have always had the right to come back to the insurer for recovery, but that historically they impose the obligation of repayment on the beneficiary and at present do not intend to change that position.
What “protect” requires by an insurer and RRE is definitely open to debate. The requirements do not state that the insurer must satisfy the lien as part of the settlement; rather the insurer has an obligation to know of any lien and protect the lien in connection with a settlement. Our interpretation of the stated and affirmative obligations in the requirements is that the insurer: (1) know whether the claimant is a Medicare Beneficiary; and (2) inquire and know, to the best of their ability whether a lien exists in a case, which will likely be through additional discovery requests and/or deposition questions; and (3) that any lien or absence of a lien is acknowledged and protected in the release with language that claimant certifies the accuracy of the lien information and/or certifies that they will satisfy the lien with the settlement dollars.
In the absence of specific edicts to pay the lien – and in light of CMS’ position in the Town Hall Meetings – we believe the above will satisfy the requirements stated in Section III. These obligations will continue to shift and evolve, but as of this date there is no statute, regulation or reporting requirement that forces the insurer to pay the lien in lieu of the claimant and their counsel.
CONCLUSION:
The reporting requirements under Section III are complex and are difficult to develop black and white reporting rules and structure around. We hope that the explanations in these newsletters help your program develop the reporting solutions needed by next year. There are many more evolutions of the processes under Section III to come. We will continue to issue newsletters as the changes warrant. In the meantime, for our prior newsletter installments regarding these reporting requirements or for more information about VCM, our services and our industry leading CMS reporting system solution, TRIDEO, please visit our website at www.vcm-llc.com or contact VCM at customerservice@vcm-llc.com.
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