Third Party Administrators (TPAs) are commonly used for various levels of insurance claims handling and processing, including ensuring that settlements are compliant with the MSP Act. With MIR having been underway for a year, it appears that CMS is beginning to better understand the role that TPAs play in the claim process by their recent decision to allow TPA information to be provided via Section 111 reporting.
When CMS was initially confronted with this issue, their opinion was that RREs should provide their contact information (mailing address) when fulfilling their Section 111 reporting requirements and coordinate the transfer of recovery correspondence to appropriate TPA or claims handling personnel. This initial process proposed by CMS was not ideal and would often cause delays in responding to recovery correspondence while the RRE forwarded the information to the TPA.
Various Insurers, TPAs, and Reporting Agents brought this issue to the attention of CMS, who issued an alert dated December 20, 2011 providing a temporary solution for RREs to submit TPA information using existing Section 111 TIN Reference File fields until specific TPA-related fields can be added to the file layout.
Previously, an RRE’s only option to provide TPA information to CMS was to manually submit an authorization on RRE letterhead, thus allowing MSRPC to forward recovery-related correspondence directly to the TPA. Submission of this information via Section 111 will provide CMS and the MSPRC necessary notification that the listed TPA is representing the RRE and will eliminate a need for separate, manual communication.
Essentially, CMS is allowing the RRE to indicate that recovery correspondence should be sent in care of or to the attention of the TPA via the address fields of the TIN Reference file (refer to the alert for a full set of instructions). It is important to note that if an RRE submits its TPA’s address using this workaround, all correspondence associated with MSP-related recoveries will only be sent to the TPA and not the RRE. It is up to the RRE and its TPA to arrange sharing of this information with each other as appropriate as the RRE retains ultimate responsibility for adhering to Section 111 mandatory reporting requirements and all other pertinent MSP regulations.
RREs that utilize the services of a TPA and prefer that their TPA receive recovery correspondence from the MSPRC should immediately begin providing TPA information via Section 111 reporting. This change should prove beneficial to both RREs and TPAs who want to assure that recovery correspondence is addressed timely. Additionally, this appears to be an indication of CMS’ willingness to listen to issues and concerns as it relates to Section 111 reporting and the recovery process which is a benefit for CMS as well as the insurance industry.