Category Archives: Mandatory Insurer Reporting (MIR)

CMS Releases NGHP Section 111 User Guide Version 5.4

As an established Medicare Secondary Payer (MSP) compliance services provider, one of our goals is to keep clients, and the property and casualty insurance industry, informed of changes affecting MSP compliance. On October 1, 2018, CMS released an updated Non Group Health Plan (NGHP) User Guide, version number 5.4. This release contains several updates that are summarized here.

The first update is a disclosure regarding the Paper Reduction Act (PRA). This disclosure, found on page iii of Chapter I – Introduction and Overview, relates to the PRA of 1995, an amendment to PRA of 1980, intended to reduce the paperwork burden on businesses and citizens imposed by federal government agencies. This portion of the update does not have any impact on NGHP Section 111 reporting and is for informational purposes only.

The next update is a reminder from CMS that Responsible Reporting Entities (RREs) should submit the policy number uniformly and with a consistent format so that updates are applied to recovery cases correctly. The update states:

“To ensure updates are applied to recovery cases appropriately, RREs are asked to submit the policy number uniformly with a consistent format. When sending updates, enter the policy number exactly as it was entered on the original submission, whether blank, zeros, or a full policy number (Appendix A, Claim Input File, Field 54).”

Please note, our analysis of this change determines that the wording above is inconsistent with other areas of the User Guide. Specifically, the policy number field cannot be submitted to CMS as “blank” as stated above, which would mean padding the field with spaces in the claim input detail record. Optum has confirmed with the BCRC that no changes have occurred making policy number a non-required field. The policy number must contain at least a three character length valid policy number or be completed with all zeros. Submission of a blank policy number will result in the claim being rejected by CMS with the CP04 error code. Clients utilizing Optum’s MedicareConnect platform for NGHP Section 111 reporting can rest assured that our validations will properly evaluate your data, allowing for continued 100 percent acceptance rate for submitted claims.

The next update occurs in the Chapter V appendices. Appendix I lists ICD-9 and ICD-10 diagnosis codes not allowed for NGHP Section 111. Likewise, Appendix J contains ICD-9 and ICD-10 diagnosis codes not allowed on no-fault plan insurance type claims for NGHP Section 111. These updates include the following:

  • Placement of decimals for the ICD-10 Excluded “Y” diagnosis codes has been corrected (Appendix I).
  • The excluded and no-fault excluded ICD-10 diagnosis codes have been updated for 2019 (Appendix I and Appendix J).

The last update involves a contact name change in multiple chapters of the User Guide. This change removes Jeremy Farquhar’s contact information and includes a new escalation contact due to Jeremy’s departure from the BCRC in August 2018. In cases needing escalation, the new EDI Director is Angel Pagan, available via phone at (646) 458-2121 or e-mail at

As a senior leader in mandatory insurer reporting, Optum Settlement Solutions looks forward to working with Mr. Pagan in providing our clients with MSP compliance industry leading advice, expertise, support and services.

Optum would also like to take this opportunity to thank Mr. Farquhar for the many years of incredible support he provided Optum and the entire NGHP community. We wish him the very best in the future.

Click here to access the updated User Guide.

Should you have any questions about the information presented above, please contact Frank Fairchok via email at

Conditional Payment Recovery is not for Wimps

Workers’ compensation, auto personal injury protection (PIP) insurers, commercial premises med pay insurers and all liability insurers continue to struggle with the recovery compliance process concerning the repayment to Medicare conditional payments CMS believes are owed as demanded.

The dispute process and challenge to the indebtedness is complex and must include supporting documents such as medical evidence, judicial decisions, and state statutes controlling the underlying claim, so arguments and defense may be included in the rebuttals and appellate briefs submitted.

The risks and potential consequences of ignoring demands and not reimbursing Medicare and/or Medicare Advantage Plans (MAP) are generally unacceptable and costly to self-insureds, insurers, and third party administrators (TPAs). Unfortunately, there is still a lack of knowledge, experience, and expertise in managing conditional payments as the regulations change and become more comprehensive and as the Centers for Medicare and Medicaid Services (CMS) recovery contractors rely on what has already been reported to CMS via Section 111 mandatory insurer reporting (MIR).

It is not uncommon, and understandably so, for an adjuster to take the path of least resistance and merely reimburse Medicare the total amount of the conditional payment amount to simply close the file or to ignore the conditional payment demand altogether until the notice of intent to refer the debt to the Department of Treasury is received.

When one inexperienced in this process blows through the first and second levels of appeal—redetermination and reconsideration respectively—it takes over two years to bring the third level appeal before an administrative law judge. If all applicable arguments and defenses have not been raised at the second appeal level, they are waived and may not be heard or considered.

In this discussion, we will explore and dissect actual cases illustrating three misconceptions continuing to plague conditional payment recovery involving counterintuitive ideas we may not wish to confront:

  • What has already been reported to CMS via Section 111 MIR trumps all legitimate medical and legal arguments and defenses as well as what the parties have agreed upon unless and until corrected.
  • Conditional payments related to injuries/illness claimed and released must be reported and reimbursed even when liability/responsibility is unlikely or disputed.
  • Diagnosis codes bundled by the provider on a specific date of service may have to be repaid even if not treated and even if not the reason for the provider encounter.

Let’s begin by examining a case in which defenses and arguments were presented that should have resulted in a significant reduction in conditional payments.

Case 1

Mr. Bagley was a 64-year-old baggage handler for ACME Airlines. On July 8, 2010, Mr. Bagley complained of pain in his back and neck after handling over 350 bags in one day. He reported the pain to his supervisor and a workers’ compensation claim was filed. After the initial investigation, the following aforementioned injuries were deemed compensable: lumbar strain (847.2) and cervical strain (847.0).

However, he was not yet a Medicare beneficiary. Eventually, ongoing responsibility for medicals (ORM) was assumed on his Medicare eligibility date of October 10, 2010. The following ICD9 codes listed on the latest Health Insurance Claim 1500 form approved by the adjuster for payment to the provider was reported via Section 111 mandatory insurer reporting (MIR): lumbar strain (847.2), cervical strain (847.0), inguinal hernia without mention of obstruction or gangrene (550.9), elevated prostate specific antigen [PSA] (790.93).

He was treated conservatively with rest, rehab, and epidural steroid injections over a period of months, and was eventually released to return to work at full duty on November 17, 2010, with no permanent impairment assigned. He was paid indemnity benefits during the time his treating physician had him off work. Because there was no settlement and related medical expenses were left open, the file was administratively closed six months later. Mr. Bagley did not seek further medical treatment and retired from ACME Airlines on his 65th birthday, March 16, 2011.

On May 10, 2016, the responsible reporting entity (RRE) was mailed a conditional payment notice (CPN) showing that $11,446.55 was identified as related conditional payments. Most of the ICD diagnosis codes listed in the Commercial Repayment Center’s (CRC) Statement of Reimbursement were unrelated to the cervical and lumbar strain/sprain and instead were to treat his subsequent prostate cancer and inguinal hernia repair.

ORM was not terminated for ICD diagnosis codes. Some of the ICD codes were unrelated and erroneously reported. As such, the initial decision from the CRC was unfavorable. A request for reconsideration was filed with the Qualified Independent Contractor (QIC) assigned once the corrections were made in the Section 111 data fields and re-reported to CMS. The inguinal hernia and elevated PSA level ICD codes were deleted since Mr. Bagley never claimed a hernia or elevated PSA level to be related to his work injury nor did his workers’ compensation (WC) treating physician ever treat either condition. A copy of the clinic notes was submitted as evidence to show no hernia was ever mentioned or treated. However, the elevated PSA level was listed in the past medical history showing he was under the care of a personal urologist.

While there were no medical records for the hernia surgery, a causation E code with a specific date of incident occurring after his retirement date was used to dispute a subsequent, unrelated cause for the inguinal hernia. The CRC statement of reimbursement showed that ICD9 code E919.2, accidents caused by lifting machines and appliances, was billed on June 18, 2012.

Case 2

The second case we will examine is one in which the ICD codes assigned when ORM was assumed for compensable injuries treated necessitated reporting of additional ICD codes when the case settled and TPOC was reported for all claims released.

On November 5, 2015, 66-year-old, 235-pound, Mr. Green stepped into a hole while working, twisted his knee, and sustained a left meniscus tear confirmed by MRI. ICD code S83.201 was deemed compensable and reported to CMS via Section 111 MIR when ORM was assumed shortly afterward.

After a lengthy period of physical therapy with limited success, a decision to perform a left knee arthroscopy was made. The procedure was followed by additional rehabilitation with an eventual release to return to regular duty some eight months after the initial date of injury.

Almost 18 months post return to work, Mr. Green complained of low back pain, but could not identify a specific activity triggering the pain, so his workers’ compensation claim to add his low back pain was denied. While his orthopedic surgeon who performed the arthroscopy attributed his low back pain to a change in gait resulting from the meniscus tear, an IME spine surgeon did not agree. No medical or indemnity benefits were paid as a result of his lower back complaints. He continued to treat for his back pain but never returned to work and instead retired. His disputed workers’ compensation claim for both injuries was compromised and settled on July 17, 2017, for $50,000.

The total payment obligation to the claimant (TPOC) amount and date was reported to CMS via Section 111 MIR which included both the ICD diagnosis codes S83.201 and M54.41. An ORM termination date was reported since all medical benefits were included in the settlement.

MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation USER GUIDE, Version 5.2, Chapters 3 & 6, state when a claim settles, all injuries claimed and released must be reported to CMS. As such, both of the following ICD codes were reported upon settlement: left meniscus tear (S83.201) and lumbago with sciatica, right side (M54.41).

Case 3

The final case to review involves ICD diagnosis codes bundled by the medical provider into a specific date of service even though the reason for the provider encounter did not include treatment involving the ICD diagnosis code.

On December 13, 1984, while working, Mr. Coleman injured his lower back. Over the course of several years, he has periodically continued to be treated by his authorized treating physician for chronic low back pain as a result of his degenerative lumbosacral disc. His employer continues to pay for Mr. Coleman’s pain management services. Unfortunately, when he became Medicare-eligible a few years ago, CMS demanded conditional payments for items and services billed by his private and personal family physician who treats him for an occasional upper respiratory infection, chronic diabetes, and esophageal reflux disease. The example below shows one of many similar dates of service. In this instance, $76.34 was demanded as a conditional payment CMS made related to the claim for one date of service:

ORM is open for a lifetime for his low back pain. The WC statute permits the employer the choice of treating physician and states medical services provided by an unauthorized physician are not covered and will not be reimbursed by the employer. Both the employee and the unauthorized physician were notified the unauthorized provider would not be reimbursed pursuant to state WC statute. Unfortunately, his family physician continues to include one ICD code for each semiannual office visit.

It continues to be the practice of CMS to seek full reimbursement for a conditional payment as long as one diagnosis code is related. Although only applicable in California and not precedent case law, CIGA v. Burwell, 2017 WL 58821, (C.D. California, January 5, 2017) held that the state law that controls the underlying claim determines whether a workers’ compensation payer has a "responsibility to make payment" for an "item or service" rather than the Medicare Secondary Payer Act. In addition, when the case was appealed, CIGA v. Price, 2017 WL 1737717 (C.D. California, May 3, 2017) issued a limited prospective order declaring CMS’ interpretation of the term "item or service" in relation to its billing practice unlawful. The case is set for trial in September 2017. We continue to raise these issues since the insurer/TPA is not entitled to obtain unrelated, private medical records that can be used to show that the reason for the provider encounter and the diagnoses being treated are all unrelated to the worker’ compensation claim.

Adverse Consequences That May Not be Readily Apparent:

Patterns of practice to take into consideration and revisit at various times during the life of the claim:

  1. Did I input ICD diagnosis codes into my claims database or Section 111 MIR system before the claimant was Medicare eligible?
  2. Do I know whether ICD diagnosis codes, ORM, or TPOC automatically transmit to CMS when
  • a claimant is not Medicare eligible,
  • after a claim is administratively closed, or
  • the claim has been denied?
  1. Does my claims database require I assume ORM in order to pay an expense on the claim file regardless of whether the claim is compensable or denied?
  2. Did I assume ORM on a case in which there may have been no-fault coverage but NO no-fault claim was ever presented for payment?
  3. Did I inadvertently report ORM on a claim that had been denied? Is that the reason why I received this conditional payment notice (CPN)?
  4. Have I inadvertently forgotten to terminate ORM when
  • medical benefits were settled,
  • when a WC claim was denied, or
  • when a causation judicial decision was made?
  1. Were ICD codes obtained from provider bills that had been approved for payment used as a means of selecting which ICD codes to report via Section 111 MIR? If so, re-review and correct if needed.
  2. For Section 111 MIR purposes, did I select ICD codes for diagnoses
  • deemed to be compensable?
  • consistent with the injuries claimed and are being treated?
  • identifying injuries being released when settled?

Recently Released and Soon to be Released Generics Expected to Reduce Claims Costs

Over the past several years, prescription drug costs related to workers’ compensation claims have risen dramatically, making it increasingly important for claims professionals to carefully evaluate this exposure and mitigate costs when possible. Optum Settlement Solutions understands that keeping up to date on new generic formulations is part of an overall strategic approach to reduce the cost of claims and ultimately the prescription allocation of a Medicare Set-Aside (MSA).

Every brand medication has a patent life that will ultimately expire. Once the patent expires, generic formulations become available on the market, typically at a lower cost. Although there is no set brand-versus-generic price differential upon generic entry, clinical analysis shows, on average, the generic has a 10% lower price at time of launch over its brand counterpart.

There were several brand name medications during 2016 and already in 2017, commonly prescribed in workers’ compensation claims, whose patents expired with their Food and Drug Administration (FDA) approved generic formulations released to the market.

Generics released in 2016 and first quarter of 2017:

Intermezzo (Zolpidem sublingual tablet): Sedative/hypnotic which is FDA approved for the treatment of insomnia. This is the only indication The Centers for Medicare and Medicaid Services (CMS) currently accepts for inclusion of Intermezzo (Zolpidem) in an MSA. Brand: $13.60/tab* Generic: $10.03/tab* (all strengths)

Frova (Frovatriptan 2.5mg): Central serotonin-receptor 1B and 1D agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Frova (Frovatriptan) in an MSA. Brand: $88.35/tab* Generic: $72.27/tab*

Nasonex (Mometasone Furoate 50mcg/actuation nasal spray): Medium –potency synthetic corticosteroid with anti-inflammatory, antipruritic, and vasoconstrictive properties which is FDA approved for the treatment of allergic rhinitis and allergic rhinitis prophylaxis. These are the only indications CMS currently accepts for inclusion of Nasonex (Mometasone Furoate) in an MSA. Brand: $16.74/gm* Generic: $15.07/gm*

Voltaren Gel 1% (Diclofenac Gel): Topical non-steroidal anti-inflammatory which is FDA approved for the treatment of osteoarthritis of the feet, ankles, knees, wrists, hands, and elbows. It is utilized most often in workers’ compensation claims for the treatment of inflammation and mild to moderate pain. While not FDA approved indications, CMS recognizes these as “medically accepted” indications for use on the body parts listed above and will include Voltaren Gel (Diclofenac Gel) in an MSA. It is considered to be utilized off-label when applied to other body parts such as the neck, shoulder or back and CMS will exclude this medication from the MSA. Brand: $0.49/gm* Generic: $0.54/gm* (Note: currently the generic formulation is more expensive, but as more manufacturers release their generic products the cost should become more competitive and decrease).

Nuvigil (Armodafinil): A psychostimulant which is FDA approved for the treatment of circadian rhythm disruption, narcolepsy, and sleep apnea. It is utilized most often in workers’ compensation claims off-label for daytime somnolence or fatigue due to the utilization of narcotic pain medications which is not recognized by CMS as an accepted indication (FDA or “medically accepted”); therefore, it would be excluded from the MSA for this diagnosis. Brand: 50mg, $8.86/tab, 150,200, & 250mg, $26.60/tab* Generic: 50mg, $7.26/tab, 150,200,250mg $21.86/tab*.

Seroquel XR (Quetiapine Fumarate Extended Release): Atypical antipsychotic which is FDA approved for the treatment of bipolar disorder, schizophrenia, and depression. These are the only indications CMS currently accepts for inclusion of Seroquel XR (Quetiapine Fumarate Extended Release) in an MSA. It is most often utilized in workers’ compensation claims for the treatment of depression. Brand: e.g., 200mg strength, $19.47/tab* Generic: 200mg, $15.52/tab* (Note: All strengths are available in generic formulation).

Pristiq (Desvenlafaxine Succinate): Serotonin-norepinephrine reuptake inhibitor which is FDA approved for the treatment of depression. This is the only indication CMS currently accepts for inclusion of Pristiq (Desvenlafaxine Succinate) in an MSA. Recently released in March 2017, no generic price available for comparison at this time.

*Current pricing based on lowest Redbook AWP

Generics to be released later in 2017:

Relpax (Eletriptan): Serotonin agonist which is FDA approved for the treatment of acute migraine attacks with or without aura. This is the only indication CMS currently accepts for inclusion of Relpax (Eletriptan) in an MSA.

Proair HFA (Albuterol Sulfate inhaler): Moderately selective short-acting beta -2 receptor agonist which is FDA approved for the treatment of acute bronchospasm and exercise-induced bronchospasm prophylaxis. These are the only indications CMS currently accepts for the inclusion of Proair HFA (Albuterol Sulfate) in an MSA.

Viagra (Sildenafil): Phosphodiesterase type 5 inhibitor which is FDA approved for the treatment of erectile dysfunction (ED) and pulmonary hypertension. CMS accepts the indication of pulmonary hypertension for inclusion of Viagra (Sildenafil) in an MSA; however, Viagra (Sildenafil) is Part D excluded for treatment of erectile dysfunction and would not be included by CMS in the MSA for this diagnosis.

Generics can help to lower the cost of the claim:

As healthcare expenditures continue to climb, the effect has been felt in the workers’ compensation industry. Generic medications play a key role in helping to lower costs. It is important, as an industry, we keep up to date on generic availability and intercede when necessary if generics are not being utilized by the treating physician. Optum, being a leader in the industry, has products and programs which can assist clients with managing and mitigating prescription drug costs. These include identification of claims where generic options are available (based on availability of data) and, when applicable, reaching out to the treating physician to discuss conversion to lower cost prescription drug alternatives.

For questions, please contact our Settlement Solutions Division at 888-672-7674 or

Social Security Number Removal Initiative

Social Security Numbers (SSN) have been used as the beneficiary identifier for administering the Medicare program since its inception. The Centers for Medicare & Medicaid (CMS) recently introduced the Social Security Number Removal Initiative (SSNRI) to remove the SSN from Medicare Cards. The primary goal of removing the SSN-based Health Insurance Claim Number (HICN) and replacing it with a new Medicare Beneficiary Identifier (MBI) is to decrease Medicare identity theft.

Optum has begun planning for this change, but what does this mean to you? There will be no file format changes to any input or response files used as part of the Medicare Secondary Payer (MSP) data exchange process. Starting in July 2017, reference to the term HICN will be replaced by “MedicareID.” The Medicare ID will universally apply to all MSP processes and will be reflected in all documentation on the Coordination of Benefits & Recovery (COB&R) web site.

CMS has stated that the MBI will have the following characteristics:

  • The same number of characters as the current HICN (11), but it will be visibly distinguishable from the HICN
  • Contain uppercase alphabetic and numeric characters throughout the 11 digit identifier
  • Occupy the same field as the HICN on transactions
  • Be unique to each beneficiary (e.g. husband and wife will have their own MBI)
  • Be easy to read and limit the possibility of letters being interpreted as numbers (e.g. Alphabetic characters are upper case only and will exclude S, L, O, I, B and Z)
  • Not contain any embedded intelligence or special characters
  • Not contain inappropriate combinations of numbers or strings that may be offensive

CMS will complete its system and process updates to be ready to accept and return the MBI on April 1, 2018. Stakeholders may submit or exchange the MBI or HICN during the transition period which runs from April 1, 2018 through December 31, 2019.

After January 1, 2020, Section 111 MMSEA Responsible Reporting Entities (RREs) may provide any one of the following to Medicare’s Benefits Coordination & Recovery Center (BCRC) as the beneficiary identifier for MSP reporting purposes:

  • MBI
  • Full SSN
  • HICN or Railroad Retirement Board (RRB) Medicare number

Additional information can be obtained from the CMS website at