Mrc White Paper Mmsea Section 111
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Transcript of Mrc White Paper Mmsea Section 111
Protecting Medicare’s Interest through MMSEA:
A Practical Guide for Responsible Reporting Entities
A Medical Research Consultants White PaperSeptember 2009
IntroductionThe passage of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) brings with it a new host of acronyms, burdensome reporting requirements, and the potential for large fines.
MMSEA eventually will change the way all liability settlements are conducted.
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In order to understand the intent of MMSEA, we must first review the original Medicare Secondary Payer Statute (MSP) enacted in 1980. Medicare pays for health care for Americans over 65 years of age and those with certain disabilities. Prior to December 5, 1980, Medicare was the primary payer for all beneficiaries, even if a negligent third party was responsible for the related medical expenses. With the passage of the MSP provisions, Medicare became secondary to liability, no-fault, worker compensation and, in some cases, group health insurance.
Prior to MMSEA, plaintiff counsel already had a duty to verify and resolve any conditional payments made by Medicare. MMSEA essentially places a new layer of reporting and potential penalties on payers (RREs) to ensure that Medicare’s interest is protected on all settlements.
History
The role of and Section 111 MMSEA
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Section 111 of the MMSEA adds mandatory reporting requirements with respect to Medicare beneficiaries who receive a settlement, judgment, award or other payment from liability insurance (including self-insurance), no-fault or worker’s compensation insurance.
In general, an entity is considered a Responsible Reporting Entity (RRE), if it funds and pays for a settlement, judgment or award to a Medicare beneficiary. The CMS User Guide i and CMS town hall transcriptsii provide greater detail into the reporting responsibility for various payer scenarios including excess insurance, third party administrators, captives, etc. The User Guide also gives a detailed description of the registration process for an RRE, how to register multiple RRE’s and the procedure to register a reporting agent. The current deadline for an RRE to register is September 30, 2009 and CMS recently issued an alert that includes the new reporting timelines and dollar thresholds. iii
i http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPUserGuide2V2.pdf ii http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPTranscript06022009.pdf iii http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPV10UserGuide051109.pdf
Key Dates
RRE Registration Deadline: September 30, 2009
Testing: January 1, 2010- March 31, 2010
Live File Submission: April-June 2010
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Step One: How to Register as an RRE
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MMSEA requires that an RRE register with the COBC before any testing between the RRE (or their agent) and the COBC can proceed. During the registration process, the RRE must determine how many RRE ID’s to register as well as designate various reporting roles, including the Account Representative, Account Manager and Account Designee. An RRE’s corporate structure, claim systems and number of reporting agents will determine the number of RRE ID’s selected. Only one claim input file may be submitted for each RRE ID on a quarterly basis.
An RRE may designate an agent to report their Section 111 reporting on their behalf. A typical agent may be a third party vendor that assists the RRE in the collection, validation and reporting of the RRE’s files to the COBC. An agent can also bring expertise in data mining, analysis and coding as well as the necessary technical support to translate the RRE’s claims data into the required CMS format.
The final registration process includes registering with COBC i and completing the account set-up process. Upon signing and returning the RRE Profile Report, the COBC will assign the RRE an EDI (Electronic Data Interchange) Representative to assist the RRE through the claims data testing period.
i https://www.section111.cms.hhs.gov/MRA/LoginWarning.action
Step Two: The Query ProcessReporting claims data
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An RRE is only required to report claims data on Medicare Beneficiaries. Therefore, each individual claimant or potential member of a settlement group must be assessed for Medicare status. Once an RRE has registered, CMS will make available a query function to determine eligibility. A name, date of birth, gender, SSN and/or HICN will be required to query a claimant through the CMS system.
Claimants may be reluctant to provide a social security number. RRE’s and/or their counsel will need to take a proactive approach to capture this data on future claims. CMS has issued an alert dated June 23, 2009 to assist in the collection of SSN’s, HICN’s and EIN’si. It is also critical that a procedure be adopted to repeatedly query claimants that are initially found not to be eligible, as their status may change over the course of a claim. Although CMS does not require a HIPAA authorization to query a claimant, an RRE should develop procedures to protect privacy and avoid any accidental disclosures of private information.
i http://www.cms.hhs.gov/MandatoryInsRep/Downloads/CollectionofSSNsHICNsandEINsTINsALERT.pdf
Step Two: The Query ProcessVerification of claimant status
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There is no safe harbor for an RRE and the status of every claimant should be verified through the query process regardless of the claimant’s age or any other thresholds. It is critical to start the verification process at the onset of a new claim, or at the latest, when settlement appears to be a realistic near term goal.
The process takes time and early submission is urged in order to capture any data that will be reported at settlement, thus avoiding the $1000/day penalty for failing to report.
Step Two: The Query ProcessData points
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Once a claimant is found to be Medicare eligible, an RRE must capture and report up to 131 distinct data points. The required claimant data to be reported falls into five categories: i
The Injured Party/Medicare Beneficiary information (fields 1-83): Includes identification information, date of injury, cause of injury (ICD-9), venue, injury information (including 19 different ICD-9/diagnostic codes), product identification and insurance/self-insurance claim and contact information.
Injured party attorney information (fields 84-97): Includes detailed attorney contact information along with attorney/law firm TIN.
Settlement, Judgment, Award or Other payment information (fields 98-103): Includes amounts and dates for ongoing responsibility for medical and total payment obligations.
Claimant information, if other than injured party (fields 104-117). Includes contact information for estate or other claimant in survival or wrongful death action.
Claimant (other than injured party attorney (fields 118-131) Includes attorney contact information along with TIN.
i http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPUserGuide2V2.pdf
Step Two: The Query ProcessUnderstanding reporting challenges
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The required data elements outlined on the previous page will most likely not be captured by an RRE in their existing claims and a retrospective process must be developed to gather the data on their “old” claims. In addition, a prospective system and procedure must be designed and implemented to capture these data elements on new claims. RREs are faced with many known challenges around reporting, but other challenges will not become apparent until after MMSEA “goes live” in 2010 These include:
Missing Data: Many of the fields will not have been captured in previous claims systems, requiring mining of medical and billing records and generation of requests to opposing counsel.
Coding: Twenty fields relate to injury descriptions and will require some level of coding experience to accurately select the ICD-9 code(s) for the cause of injury and diagnosis.
Reporting: Exporting the required data into the format prescribed by CMS will undoubtedly create an entirely new set of challenges for an RRE’s IT department. The format is ripe for error, consisting of a 2,000-character string of data with a predetermined beginning and end position for each of the 131 data fields.
Step Three: The Reporting Process
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The actual RRE reporting is triggered by a settlement, award, judgment or other payment to a Medicare Beneficiary. Reported data is to be sent electronically from the RRE to the CMS Coordination of Benefits Contractor (COB).
Step Three: The Reporting Process
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The COBC consolidates the activities that support the collection, management, and reporting of other insurance or workers’ compensation coverage for Medicare beneficiaries. Already operational, the COB currently performs the roll of a call center for all new CMS cases and will likely see their resources stretched thin as MMSEA is implemented.
The COB then assigns the case to the CMS Medicare Secondary Payer Recovery Contractor (MSPRC), who is responsible for the recovery of any amounts due Medicare. The actual data submission process will take place between the RRE’s and the CMS Coordination of Benefits Contractor (the COBC).
Step Four: Protecting Medicare’s Interest
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The last and most problematic hurdle is the question of how an RRE should approach the settlement of a claim with a Medicare beneficiary. Will a co-payable draft including Medicare resolve (absolve?) an RRE of any liability? Should a separate draft be issued to Medicare for their interest? Is an indemnification clause in the release enough to protect an RRE? What about an unrepresented claimant? Does an RRE have an incentive or responsibility to act as an advocate for the claimant to satisfy Medicare’s interest in an effort to close the claim file? Currently, these questions have no definitely apparent answers, and RRE’s should already be working with their counsel to develop a strategy that best limits their liability.
What is abundantly clear, however, is that Medicare expressly states that their interest should be settled before any settlement funds are disbursed.i The best way to avoid RRE liability, satisfy Medicare’s interest, avoid prolonged settlements and reduce claim expenses is to adopt a proactive approach to resolving Medicare’s interest in cooperation with opposing counsel.
i 42 U.S.C. Section 1395y(b)(8)(ii
Review of the lien resolution process (1) Once it is verified that a claimant is a Medicare
beneficiary, a new case is entered by contacting the Coordinator of Benefits (COB).
The COB enters the claim data and assigns the case to the Medicare Secondary Payer Recovery Contractor (MSPRC). This process should take 7-10 business days, but will likely take longer.
The MSPRC assigns the file to a case manager. The case manager will request additional information about the injury and third party tortfeasor, along with a HIPAA authorization.
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Review of the lien resolution process (2) The MSPRC then must canvass all other Medicare
contractors to locate any bills that may have been paid on the beneficiary. This process is likely to take at least 60-90 days.
Once the MSPRC compiles all of the bills, they send a Conditional Payment Summary (CPS) which should include an itemized list of charges, including dates of service, amount billed and diagnostic codes.
The CPS should then be reviewed to verify that each charge is related to the underlying settlement. This is accomplished by comparing each line item diagnostic code (ICD-9) to the diagnostic codes included in the injury allegation.
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Review of the lien resolution process (3) Any charges unrelated to the settlement should
then be disputed with the MSPRC representative. Once settlement is reached, a demand letter is
requested which includes the date of settlement, settlement amount and any procurement expenses (attorney fees, case expenses).
MSPRC then sends out the final demand amount which must be paid within 60 days of receipt.
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Time is of the essenceGiven the proceeding process, the final resolution of Medicare’s
interest may take at least six months if the process is not started prior to settlement. Success for both RRE’s and plaintiff attorneys lies in working together to identify Medicare beneficiaries, and starting the resolution as early as possible.
It is critical that the ICD-9 codes reported to CMS match the injury allegations, so there is no discrepancy as to which charges are related.
It is important for an RRE to obtain a copy of the most recent conditional payment summary prior to settlement either from the claimant or directly from MSPRC with an authorization signed by the claimant. In the case of an unrepresented claimant, the RRE will have even a greater incentive to participate early in the resolution process. If Medicare’s initial claim equals or exceeds the proposed settlement, all efforts must be made to evaluate, audit and compromise any liens if the settlement is to proceed.
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ConclusionsMMSEA will change the entire claims process, from the way initial claims are entered, data is gathered and reported, and ultimately how claims are settled.
An RRE must evaluate their claims systems, employee training, reporting capabilities and settlement procedures to determine the most efficient way to deal with this new reality. Medicare is intent on recouping its payments and the penalties and the associated liability for failing to protect Medicare on a settlement are too severe to ignore.
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Glossary of TermsAccount Designee: Account Designees assist the Account Manager with the reporting process. They can be employees of the RRE or of an agent. There is no limit to the number of designees for any one RRE ID.
Account Manager: Controls the administration of the account and manages the reporting process. The Account Manager can be an employee of the RRE or their agent.
Account Representative: The Account Representative is ultimately accountable for an RRE’s Section 111 Reporting. The representative is typically an executive-level employee of the RRE and must have the legal authority to bind their organization.
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Centers for Medicare and Medicaid Services (CMS): A federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children’s Health Insurance Program (SCHIP), and health insurance portability standards.
Coordination of Benefits Contractor (COBC): Consolidates the activities that support the collection, management, and reporting of other insurance or workers’ compensation coverage for Medicare beneficiaries.
Health Insurance Claim Number (HICN): unique identifier for claimant.
Glossary of Terms (continued)Medicare: A health insurance program for people age 65 or older, people under the age of 65 with certain disabilities, and people of all ages with End-Stage Renal Disease.
Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA): Adds mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under Group Health Plans(GHP) or who receive settlements, judgments or awards from liability insurance, no-fault insurance and worker’s compensation.
Medicare Secondary Payer (MSP): The term used when the Medicare program does not have primary payment responsibility (that is, another entity has the responsibility for paying before Medicare).
Ongoing Responsibility for Medicals (ORM): Refers to an RRE’s responsibility to pay, on an ongoing basis, for the injured parties claims.
Responsible Reporting Entity (RRE): Per CMS, An applicable plan, defined as the following laws, plan or other arrangements, including the fiduciary or administrator for such law, plan or arrangement(s): Liability Insurance, No-Fault Insurance and Worker’s Compensation Laws or Plans.
Total Payment to Claimant (TPOC): refers to the dollar amount of a settlement, judgment, award, or other payment in addition to/apart from ORM.
Tax Identification Number (TIN): IRS-assigned, Federal Tax Identification Number.
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Want to learn more?
Contact:Randy HaynesMedical Research [email protected]
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Founded in 1983, MRC offers a comprehensive support solution for legal, healthcare, and insurance professionals, including medical records analysis, record retrieval and management, lien research and resolution, coding audit and education, and call center services. MRC has supported some of the largest mass torts on record, including toxic tort and products liability litigations, but also offers expertise in Pharmacovigilance, HCC Management, and individual personal injury cases. MRC is a certified woman-owned business, and is a preferred vendor for several major manufacturers and pharmaceutical companies, including Pfizer. MRC has been a Primary Service Provider for the DuPont Company since 2005.
