Historically, to initiate the conditional payment process, the COBC would have to be placed on notice of the claim which would then result in the creation of a record in the Medicare database. This was accomplished by the injured party, attorney, RRE/TPA or their designated vendors communicating with the COBC via telephone or in writing to ensure a record is on file for a beneficiary. This voluntary process did not consistently provide CMS with the necessary claims information for proper coordination of Medicare benefits. Typically, Medicare would not be aware of a carrier’s responsibility to pay medical treatment on a claim until settlement was contemplated and conditional payment verification was requested. Therefore, there was a high likelihood that Medicare could make conditional payments (possibly due to erroneous billing procedures on the part of the physician) when they were clearly a secondary payer. In an effort to tighten the coordination of benefit process and assure Medicare’s interest as a secondary payer are being protected, Section 111 of the MMSEA was enacted requiring RREs to electronically report claims information to Medicare.
Now that Medicare has received claims data through Section 111 reporting for over a year, on January 10, 2012 it was announced that self reporting of ORM will no longer be required. This information was provided in the form of an alert posted on the Section 111 webpage which confirmed that RREs must report ORM through the Section 111 reporting process as required rather than through a self report. Additionally, CMS confirmed that RREs should no longer self-report exhaustion of benefits to the COBC or the MSPRC, as this should also be handled through the Section 111 reporting process. However, if the RRE needs to make an immediate report of ORM termination prior to their Section 111 reporting date they can contact the COBC and report ORM termination for a single claim as long as it was previously reported and accepted via Section 111. It is important to remember that if an RRE chooses to contact the COBC to make an immediate report of ORM termination they must still report this information through the Section 111 reporting process as required.
Since RREs do not report TPOCs until there is a settlement, judgment, award, or other payment (normally late in the claims process) self reporting may still be necessary. Claims data reported via Section 111 is communicated to the MSPRC after a settlement is reported which does not allow for verification of conditional payments prior to settlement. This is problematic for RREs, TPAs, and claimant attorneys who are trying to properly consider Medicare’s interest during the settlement process. For claims involving TPOCs only (no ORM), which is typical for liability claims and may involve denied workers’ compensation claims, it will be necessary to continue to self report claims to the COBC in order to obtain conditional payment information prior to settlement. However, it is important to note that a self-report does not eliminate the RRE’s Section 111 reporting obligations.
The changes noted in this alert are an indication of how CMS is working to improve the recovery process. These changes are a positive outcome of the Section 111 reporting process which benefits those required to report, as well as CMS, and we hope that CMS will continue to make modifications to both the recovery process and Section 111 reporting process going forward.