Category Archives: Mandatory Insurer Reporting (MIR)

CMS Releases NGHP Section 111 User Guide v5.2

CMS has released an updated NGHP User Guide, version number 5.2. The update clarifies MIR Section 111 reporting thresholds initially addressed in a published alert by CMS Financial Services Group posted to the Non-Group Health Plan Recovery site on November 15, 2016 entitled “2017 Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments”. The changes to thresholds are summarized below.

For Section 111 reporting, the Centers for Medicare & Medicaid Services (CMS) has changed the minimum reportable Total Payment Obligation to the Claimant (TPOC) amounts for liability insurance (including self-insurance), no-fault insurance, and workers’ compensation claims.

  • Liability is changing from $1000 to $750 for TPOC Dates of 1/1/2017 and subsequent.
  • No-Fault is changing from $0 to $750 for TPOC Dates of 10/1/2016 and subsequent.
  • Workers’ Compensation (WC) is changing from $300 to $750 for TPOC Dates of 10/1/2016 and subsequent.

TPOC amounts exceeding these thresholds must be reported. However, TPOC amounts less than the specified threshold may be reported and will be accepted.

The logic for the CJ07 error has been changed such that a TPOC of any amount will be accepted for all types of TPOCs, including liability TPOCs. The CJ07 error will continue to be returned for a liability, workers’ compensation, or no-fault claim report where the ORM Indicator is set to “N” and the cumulative TPOC amount is zero.

We are able to provide a consolidated PDF file of all the updated chapters upon request. Please contact us at JustRegister@optum.com if you would like to receive this consolidated, searchable file. For more information, please email JustRegister@optum.com.

New Version of NGHP Section 111 User Guide 5.1

CMS Stack of PapersCMS has released an updated User Guide, version number 5.1, on October 10, 2016. This update expands upon the specific reference materials that may be obtained online at Section 111 Coordination of Benefits Secure Website (COBSW). CMS provides a summary of updates and impacted User Guide chapters stating “Chapter 1 Introduction and Overview and Chapter 2 Registration Procedures and Chapter 4 Technical Information: Updates were made to clarify which references under the online Section 111 Coordination of Benefits Secure Website (COBSW) Reference Materials menu are available to RREs post-login (Chapter 7).”

Additionally, the following documents are only available to NGHP RREs after login:

  • Test Beneficiary Data
  • Excluded ICD-9 Diagnosis Code Data
  • Excluded ICD-10 Diagnosis Code Data
  • Error Code Data
  • HEW Software Download

We are able to provide a consolidated PDF file of all the updated chapters upon request. Please contact us at JustRegister@optum.com if you would like to receive this consolidated, searchable file.

For more information, please email JustRegister@optum.com.

Centers for Medicare & Medicaid Services announces annual recovery thresholds for certain liability insurance, no-fault insurance and workers’ compensation payments

To fulfill the requirements of Section 202 of the Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2012, Centers for Medicare & Medicaid Services (CMS) is required annually to review all of the costs related to collecting data and determining the amount of Medicare’s recovery claim, otherwise known as conditional payments. As of September 26, 2016, and for the remainder of 2016, CMS has announced its recovery and reporting thresholds.

CMS determined that it will maintain the current single threshold for physical trauma-based liability insurance settlements, where settlements of $1000 or less do not need to be reported and Medicare’s conditional payment amount related to these cases does not need to be repaid.

CMS also evaluated available data related to no-fault insurance and workers’ compensation settlements. Based on this data, CMS determined that it will establish a new threshold for no-fault insurance and workers’ compensation settlements. For FY 2016, settlements of $750 or less for no-fault insurance and workers’ compensation do not need to be reported and Medicare’s conditional payment amount related to these cases do not need to be repaid if the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals (ORM) that has been accepted and/or reported via Section 111 mandatory insurer reporting (MIR).

BACKGROUND

The Medicare Secondary Payer (MSP) provisions of the Social Security Act prohibit Medicare from making payment where payment has been made or can reasonably be expected to be made by a primary plan. If payment has not been made, or cannot reasonably be expected to be made promptly by a primary plan, Medicare may pay conditionally, with the expectation that the conditional payments would be reimbursed, once primary payment responsibility is demonstrated.

The primary plan, such as liability insurance, no-fault insurance or workers’ compensation, often demonstrates primary payment responsibility through a settlement, judgment, award or other payment (hereinafter, “settlement”). Accordingly, Medicare is obligated by statute to recover conditional payments it made for medical care related to the settlement. Medicare’s recovery is limited to the amount of the settlement less any attorney fees or costs the beneficiary incurred to obtain the settlement.

Medicare beneficiaries, their attorneys and primary plans report settlements to Medicare. Reporting is required so Medicare is able to determine if it made any conditional payments related to that settlement. Once reported, Medicare calculates its conditional payment amount, reduces that amount for attorney fees and costs, then issues a demand letter requiring reimbursement.

Medicare incurs costs to perform these activities. These costs include, for example, compiling related claims, calculating conditional payments, applying reductions, sending demands and providing customer service. In addition to the CMS costs associated with pursuing recovery, Medicare does not usually recover the full amount of the conditional payments. For example, there may be reductions to the demand to account for procurement costs (attorney fees and costs) or for full or partial waiver of recovery if certain criteria are met. Implementing a threshold facilitates CMS’ efficient use of its resources.

COST OF COLLECTION

The CMS estimated the average cost of collection for Non-Group Health Plan (NGHP) cases (which includes liability insurance (including self-insurance), no-fault insurance and workers’ compensation) as approximately $421 per case. This cost of collection was based on the amount paid (invoices) to the Benefits Coordination and Recovery Contractors for work related to identifying and recovering NGHP conditional payments. CMS relied on data from fiscal year 2015. The total dollar amount paid to CMS’ contractors was divided by the number of final NGHP demand letters issued during the aforementioned date range. The average cost of collection per case was calculated to be approximately $421.

To determine settlement thresholds, CMS compared the estimated cost of collection per NGHP case of approximately $421 to the average liability insurance demand amount per settlement range. The CMS Office of Financial Management did the same comparison of the estimated cost of collection to the average no-fault insurance and workers’ compensation demand amounts per settlement range.

CONCLUSION

Based on this information, CMS determined it will maintain the existing $1000 threshold. As such, physical trauma-based liability insurance settlements of $1000 or less do not need to be reported to CMS via Section 111 mandatory insurer reporting (MIR). In addition, Medicare’s conditional payment amount for these settlements does not need to be repaid.

For workers’ compensation and no-fault insurance settlements, CMS has established a threshold of $750, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals (ORM).

However, if a conditional payment demand is received for a claim falling below the threshold, the letter must not be ignored but instead acted upon by informing the recovery contractor of the settlement amount and date and checking to be sure accurate amounts, dates and ORM were not inadvertently reported via Section 111 mandatory insurer reporting (MIR).

CRC Returns $125 Million to Medicare from Group Health Plans Conditional Payments in 2015. No-Fault Insurers and Work Comp Plans are Next in 2016!

Coordination of Benefits and RecoveryOn May 23, 2016, the Centers for Medicare and Medicaid Services (CMS) Coordination of Benefits and Recovery (COBR) Commercial Repayment Center (CRC) published its report to Congress as required by Section 1893(h) of the Social Security Act for Fiscal Year (FY) 2015.

This is the second annual report for the CRC, a national contractor utilized by CMS to identify and recover primary payments mistakenly made by the Medicare program when another entity had primary payment responsibility. The CRC’s work to date has only included the identification and recovery of mistaken primary payments when beneficiaries had coverage through an employer-sponsored Group Health Plan (GHP) arrangement in addition to their coverage under the Medicare program. Because as of October 1, 2015, the CRC began to identify and recover payments mistakenly made by Medicare when a Non-Group Health Plan (NGHP) applicable plan (that is, a Liability insurer, No-Fault insurer, or Workers’ Compensation entity) accepted Ongoing Responsibility for Medical (ORM) and thereby had or has primary payment responsibility, in FY 2016, CMS will expand the CRC’s workload to include the recovery of certain conditional payments where a NGHP applicable plan had or has primary payment responsibility.

As a result, the work process, ability to handle volume, identified mistaken payments, and astounding collections recovery reported here by CRC may be a telling sign of things to come in the NGHP world. If so, watch out self-insureds, liability insurers, no-fault insurers, and workers’ compensation entities or plans, as the CRC is transforming conditional payment recovery from a laissez-faire, slow moving, without deadlines process into a regimented, aggressive, deadline and results driven process.

Group Health Plans and Non-Group Health Plans

The report indicates that “Medicare Secondary Payer (MSP) program involves two broad categories: Group Health Plan (GHP) and Non-Group Health Plan (NGHP). The term “GHP” refers to the arrangement between the employer or other plan sponsor (such as a union or employee health and welfare fund) and the insurer or claims-processing TPA. The term “NGHP” specifically refers to Liability insurance (including self-insurance), No-Fault insurance or Workers’ Compensation. Under the provisions of 42 U.S.C. §1395y(b), the Medicare program can generally only make secondary payments when a payment has been made (or can reasonably be expected to be made) by these GHPs or NGHP applicable plans.”

Data Collection Through Mandatory Insurer Reporting

The report also provides that “CMS routinely collects information about any additional coverage a beneficiary may have or had for a specified period of time. Data collection activities include mandatory insurer reporting, as required by Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Section 111), codified at 42 U.S.C. § 1395y(b)(7) and (b)(8). This data is compiled and updated as necessary. When a medical claim is submitted for payment under Part A or Part B of the Medicare program, Medicare reviews the beneficiary’s records to determine if the Medicare program has primary payment responsibility, or if another entity has that responsibility.”

Identifying Mistaken Payments

In addition, the report also clarifies that “in certain situations after a Medicare claim is paid, CMS may receive new or updated information about health coverage other than Medicare benefits. The CRC reviews new and updated GHP records to determine whether Medicare may have mistakenly paid any claims as the primary payer. Once the CRC identifies mistaken payments, it recovers the payment from the GHP. In addition to recoveries it has initiated, the CRC maintains all open GHP recovery cases (and debts) that were established under previous MSP recovery contractors.”

During the time period for this report, the CRC only reviewed GHP MSP occurrences as they were received and updated to determine whether any primary payments were mistakenly made for a given beneficiary. As of October 1, 2015, the CRC has also been updating NGHP records to determine whether Medicare may have mistakenly paid any claims as the primary payer. In GHP situations, “when the CRC identifies a potential mistaken payment, it issues a Primary Payment Notice (PPN) to the entities that CMS believes had primary payment responsibility (typically the employer or other plan sponsor and the insurer or claims processing TPA).” In NGHP situations, when the CRC identifies a potential mistaken payment, it issues a Conditional Payment Notice (PPN) to the entities that CMS believes had primary payment responsibility (typically the self-insured, liability insurer, no-fault insurer, or workers compensation entity or plan).The notices “request information, but more significantly provide notice of any mistaken payments made by Medicare that may be the responsibility of the GHP or NGHP.”

Recovering Mistaken Payments

Once the CRC has identified mistaken payments made by Medicare which are the responsibility of a primary payer, “the CRC then issues a letter that demands repayment (called a “Demand” letter) from the entities that should have paid as primary. This Demand notifies the identified debtors of the existence of the debt and includes claim specific information. The Demand also includes instructions for how to repay or rebut the debt, and consequences of failure to resolve the debt within the identified timeframe. In response to the Demand, identified debtors may make payment to Medicare. Interest is assessed on any unresolved balance after 60 days (interest accrues from the date the Demand is issued, but is not assessed unless there is an outstanding balance 60 days after issuance of the Demand). If any portion of the debt remains unresolved, the CRC will notify the identified debtor of Medicare’s intent to refer the debt to the Department of the Treasury for collection. Failure to resolve the debt after that notice is issued results in referral of the debt to the Department of the Treasury for collection.”

MSP CRC FY 2015 Results

The report highlights:

[I]n FY 2015, CRC issued 31,968 Demand letter packages relating to 41,847 individual beneficiaries, representing $585.19 million in potential mistaken payments made by the Medicare program. In response to these Demand letters, the CRC received information that validated $292.2 million as correctly identified mistaken payments, representing an increase of almost 25% over the $234.2 million identified in FY 2014. The CRC processed collections of $154.29 million on behalf of the Medicare program, which represents an increase of almost 140% over the $64.4 million in collections processed in FY 2014. Taking into account refunded excess collections of $4.69 million; the CRC posted $149.6 million in net collections. This is an increase of over 150% compared to the $59.3 million in net collections in FY 2014. Considering agency administrative costs of $24.55 million (including contingency fees paid to the CRC), CMS realized a return of $125.05 million dollars to the Medicare trust funds as a direct result of this program, an increase of 147% over the return of $50.6 million for FY 2014.

[ . . . ]

[T]he CRC’s net collections totaled $149.6 million in FY 2015. This amount includes mistaken payments identified through the end of FY 2015 (collection efforts will continue into FY 2016 for mistaken payments identified in FY 2015). A total of $144.21 million of these payments were direct payments (that is, checks received from debtors). During FY 2015 the CRC processed $10.08 million in collections from the Department of the Treasury on delinquent debts. In addition, $4.6 million in excess collections were identified and refunded to the identified debtors.

The Commercial Repayment Center and NGHP Recovery

The report continues:

As with other recovery contractors engaged by CMS and in accordance with the Tax Relief and Health Care Act, the CRC is paid on a contingency fee basis. The amount of the contingency fee is a percentage of the mistaken payment that the identified debtor has returned to the Medicare program. The CRC negotiated its specific contingency fee at the time of the contract award, and may only collect its fee once payment has been applied to a specific debt. In the event that excess collections have been made and a refund must be made to the identified debtor, the CRC must refund the contingency fee related to those collections.

As was started in October of 2015, during FY 2016,

[T]he CRC workload will expand to include the recovery of certain NGHP conditional payments where an applicable plan (a self-insured, liability insurer, no-fault insurer, or workers’ compensation entity or plan) had or has primary payment responsibility. The CRC will recover directly from the applicable plan as the identified debtor when the applicable plan reports that it has ORM or otherwise notifies CMS of its primary payment responsibility.

Conclusion

The identified and recovered amounts reported here by the CRC during FY 2015 are impressive. They may also be a telling sign of things to come in the NGHP world. If so, watch out self-insureds, liability insurers, no-fault insurers, and workers’ compensation entities or plans, as the CRC is transforming the conditional payment recovery world. Given the better information captured through mandatory reporting, the increase in the number of entities and individuals reporting such claims and thereby complying with the MSP law, now seeking pre-settlement reimbursement of such mistaken Medicare payments if ORM has been accepted, and the contingent nature of the fee awardable to the CRC for such recovery, the CRC is about to change 35 years of conditional payment resolution history in the no-fault, med-pay, PIP, and workers compensation industries. As always, Optum Settlement Solutions will continue to keep you updated on all activities associated with the CRC and its attempts to recoup conditional payments prior to settlement from self-insureds, no-fault insurers, liability carriers, and workers compensation plans when ORM has been accepted or established.