Tag Archives: MIR

Casualty Actuarial Study Finds Medicare Mandatory Reporting Requirements May Cause Modest Loss Increases in Workers Compensation and Liability Claims

ss-card-in-walletArticle by Rafael Gonzalez, Esq.
Vice President, Strategic Solutions

Over the last couple of weeks, a study prepared for The Casualty Actuarial Society, which was the source of a presentation at the CAS Centennial Celebration and Annual Meeting, in New York, NY, delivered on November 12, 2014, has been getting a lot of attention. The study, titled “Medicare Secondary Payer Status – The Impact of Section 111 Reporting Requirements“, is written by Guy A. Avagliano, FCAS, MAAA, Philip S. Borba, Ph.D., Christine M. Fleming, J.D., ACAS, MAAA, and Craig P. Taylor, ACAS, MAAA of Milliman, Inc.  What follows is a verbatim summary of the information, research, findings, and conclusions of the authors as published on July 6, 2015.

Purpose of Study

The study examines Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Section 111 or MMSEA), which introduced formalized reporting requirements of medical services received by Medicare beneficiaries in various lines of insurance coverage, including liability, self-insured, no-fault, and workers compensation. The study was “undertaken to investigate the potential impacts of the Section 111 reporting requirements on property-casualty losses, and in particular to assist practicing casualty actuaries with the potential impacts of the reporting requirements.”

Mandatory Reporting

Section 111 requires mandatory reporting for ORM and TPOC. The study indicates “ongoing responsibility for medicals (ORM) refers to the ongoing responsibility for payment of the injured party’s medical treatment, including medical-only claims with more than $750 in payments and all indemnity claims.” The study also indicates “total payment obligation to the claimant (TPOC) refers to the settlement, judgment, award, or other payment in addition to the ORM. A TPOC is generally a one-time or lump sum settlement, judgment, or award. Structured settlements are considered TPOCs.”

The study points out “there is no threshold for TPOC claims for no-fault insurance, as all TPOC payments made under a no-fault coverage must be reported to CMS.” The study also points out “thresholds for reporting TPOC payments for workers compensation became effective for payments made on or after October 1, 2010, and thresholds for liability became effective for payments made on or after October 1, 2011.” The study indicates that “as of January 1, 2014, an insurer or self-insured is required to report TPOC payments made on or after October 1, 2013, that were over $2,000. As of January 1, 2015, the threshold for workers’ compensation and liability claims is $300 for payments made on or after October 1, 2014.”

The study indicates that “under Section 111, insurers and self-insureds are required to report to CMS certain information on incidents where a Medicare beneficiary has received medical treatment or where a one-time payment (such as a lump sum, settlement, or judgment) includes provisions for medical treatments. This information includes identifiers for the claimant and the insurer (or self-insured) and diagnostic information for the medical treatments (such as the International Classification of Diseases 9th (or 10th) Revision (ICD-9 or ICD-10) diagnosis codes).” Therefore, when a Medicare beneficiary receives medical treatment in the future for which payment is sought under Medicare, “CMS will use this information to determine whether the medical treatment was related to a previous injury that was covered by an insurer or self-insured. If CMS determines the medical service was related to the prior injury, CMS will seek reimbursement for payment for the medical service from the insurer or self-insured.”

General Findings

Because there is little information with which to estimate the financial impact of the new reporting requirements, for this study, the authors show “through case illustrations how losses may increase for insurers and self-insureds.” Using very generalized assumptions, the authors present “possible aggregate estimates for a hypothetical insurer for workers’ compensation and private passenger automobile coverages.” The study therefore provides “the practicing actuary with an approach for evaluating the impact of Section 111 claims where Medicare has been making payments and has not been reimbursed by the property-casualty insurer or self-insured.”

The authors found that the “Section 111 reporting requirements may cause modest increases in losses for injured workers and individuals 65 and over for cases where Medicare has been making payments without being reimbursed by the property-casualty insurer or self-insured.” The study illustrates the potential impact on losses in 10 cases (workers’ compensation, private passenger automobile, and homeowners cases).

Specific Findings

For the hypothetical insurer with the conditions or types of workplace injuries described in the report, the authors estimate “the impact to be an increase in total losses (medical and indemnity) between 0.9% and 5.7% for workers 65 and over.” Using a set of generalized assumptions, the authors estimate “the aggregate impact on medical losses for injured workers 65 and over to be between 11% and 25%, which when spread across all workers the estimated increase is from 0.5% to 1.3% depending on the condition or type of injury.” For private passenger automobile injuries (and again, using a set of generalized assumptions), the authors’ estimated impact is “a 0.4% to 0.8% increase in total losses for individuals 65 and over, and an estimated increase of 0.07% to 0.13% in total losses for all ages.” Although the authors included a homeowners claim in their case illustrations, they “did not estimate an aggregate impact due to the lack of information on medical payments for homeowners claims.”

Medicare Set-Aside Arrangements

The study distinguishes between the Section 111 reporting requirements and a Medicare Set-Aside Arrangement (MSA).  While Section 111 requires insurers and self-insureds to report to CMS personal identifier and diagnostic information for Medicare beneficiaries receiving medical treatments for an incident subject to a property-casualty insurance coverage (including incidents covered by self-insurance), “a Medicare Set-Aside Arrangement is a voluntary financial agreement that allocates a portion of a settlement to pay for future medical services related to a claim. Section 111 reporting is required by statute; Medicare Set-Aside Arrangements are voluntary.” The authors also point out that, as a practical matter “Section 111 concerns all claims with medical payments over $750, including claims with ongoing medical treatment. By contrast, MSAs only concern large settlements. CMS will only review MSA submissions where the claimant is a Medicare beneficiary and the total settlement is greater than $25,000 or the claimant has a reasonable expectation of enrolling for Medicare within the next 30 months and the total settlement is greater than $250,000.”

10 Cases that Illustrate Situations

To highlight the effect of Section 111, the authors developed 10 cases to illustrate situations that may arise under the Section 111 reporting requirements. Six cases concern work-related injuries covered by workers’ compensation, three cases were injuries subject to automobile coverage, and one case was for a homeowners coverage incident. The cases were developed to show a variety of situations across different liability coverages. “For the conditions associated with the case illustrations, the estimated financial impact to the insurer or self-insured was the difference between the current case reserve estimates and the potential losses.”

Study Findings and Estimates

Aggregating across the three claim groups, the study estimates “medical losses for workers 65 and over could increase by 17%, which converts to an increase of 0.9% across all workers.” Across the three assumed levels of impact, the study estimates “medical losses for injured workers 65 and over could increase by 11% to 25%, which when spread across all workers the estimated increases are from 0.5% to 1.3%.”

For private passenger automobile, the authors used estimates for injuries under five separate coverages and for injuries under all coverages, using information on the percentage of payments for medical care and the average medical payments. The study indicates that “the Section 111 reporting requirements may increase the average medical payments for individuals 65 and over by $842 to $1,685 (based on 2012 loss experience), or by 1.3% to 2.6% for this age group. The 1.3% to 2.6% estimated impact on medical payments for individuals 65 and over translates to an estimated increase of 0.2% to 0.4% in medical payments for all ages.” For total losses, the study estimates an “impact of 0.4% to 0.8% increase in total losses across injured individuals 65 and over, and an estimated increase of 0.07% to 0.13% for all ages.”

It is undeniable that Medicare Section 111 Mandatory Reporting has added significant administrative burdens for claim payers and handlers. Burdens that include collection of such data, and communicating same to Medicare on a consistent and accurate format. It is also undeniable that Mandatory Reporting has provided Medicare with information that allows it to track and monitor liability, self-insured, no-fault, and workers compensation claims. Information that includes the name of the primary payer, its insurer, date and description of the accident, injuries associated with said claim, medical professionals providing care for such injuries, as well as representatives involved in the claim.

The combined effect of this is Medicare’s consistent ability to seek reimbursement of conditional payments made by Medicare in liability, self-insured, no-fault, and workers compensation primary payers. As Medicare is better able to identify conditional payments that are the responsibility of primary payers, it is also undeniable that primary payers (liability, self-insured, no-fault, and workers compensation entities) will continue to see an increase in their costs or losses.

As the industry waits for the Mandatory Reporting process to mature, and therefore better data to become available, with hopefully a more accurate description of such losses and the specific effect of this new process requirements on all liability, self-insured, no-fault, and workers compensation claims, Helios Settlement Solutions has been and continues to be a national leader in this arena. Our MedicareConnect mandatory reporting platform is the industry’s most accurate reporting service available, with a 99.98% acceptance rate. As a result of such reliable data, Helios Settlement Solutions is the only national compliance vendor currently able to offer its clients custom crafted services and reports aimed at early identification of Medicare beneficiary status, early identification of unreimbursed conditional payments, and early identification of future allocation needs. All of these are offered with an eye toward mitigation of the potential costs and losses mentioned in the study reviewed here. To speak with us about such products and services, contact us at 888.672.7674, or contactus@helioscomp.com.

CMS Announces Switch on NGHP Conditional Payment Recovery from BCRC to CRC and Use of ICD-9 and ICD-10 to Determine Payment of Medical Bills

Article by Rafael Gonzalez, Esq. Vice President, Strategic Solutions HELIOS Settlement Solutions

Article by
Rafael Gonzalez, Esq.
Vice President, Strategic Solutions
HELIOS Settlement Solutions

On July 1, 2015, CMS published an announcement on its upcoming transition of Non-Group Health Plan recovery workload from the Benefits Coordination & Recovery Center to the Commercial Repayment Center.

As part of the continuing efforts to improve the Coordination of Benefits & Recovery (COB&R) program and claims payment accuracy in Medicare Secondary Payer (MSP) situations, the Centers for Medicare & Medicaid Services (CMS) will be transitioning a portion of the Non-Group Health Plan (NGHP) recovery workload from the Benefits Coordination & Recovery Center (BCRC) to its Commercial Repayment Center (CRC). CMS will also be working closely with its claims processing contractors to make sure that Medicare pays correctly in the MSP situations described below.

Effective October 2015, the CRC will assume responsibility for the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation (WC) entity as the identified debtor.

The following should be noted regarding the planned workload transition:

  • The transition only includes those cases where CMS is pursuing recovery from the liability insurer, no-fault insurer or WC entity directly.
  • Beneficiaries and their attorneys will continue to work with the BCRC where CMS is pursuing recovery from the beneficiary.
  • Webinars and town halls will be scheduled in the coming months to provide additional information.

For readers who are not familiar with Medicare’s Commercial Recovery Center, the CRC currently handles Group Health Plans (GHP) recoveries. Therefore, based on this announcement, it is anticipated that all NGHP recovery related activities, where CMS is pursuing recovery from the liability insurer, no-fault insurer or WC entity directly, including refund checks, correspondence, and telephone inquiries will be handled by the CRC. This may include recovery demand letters, repayment of debt, administrative appeals request, and notice of intent to refer debt to the Department of Treasury letters.

We do not yet know whether there will be any changes to the current NGHP recovery process as a result of the CRC assuming responsibility for recovery of such conditional payments. As always, Helios Settlement Solutions will continue to track such changes and will continue to inform as to any procedural and administrative effects resulting from same.

The announcement also indicates that “effective January 1, 2016, CMS will add an additional limitation to Medicare claims payments where insurers or workers’ compensation entities have reported to CMS that they have Ongoing Responsibility for Medicals (ORM).”

The announcement explains that “in situations where an insurer or workers’ compensation entity has reported to CMS that it has ongoing responsibility for medicals (ORM) for specific care, CMS’ claims processing contractors will use the information provided by the insurer or workers’ compensation entity to determine whether Medicare is able to make payment for those claims.” As a result, “insurers and workers’ compensation entities that notify Medicare that they have ORM are strongly encouraged to report accurate ICD-9 or ICD-10 codes as Medicare’s claims processing contractors will use this information to pay accordingly.”

Although we have all known for quite some time that information provided to CMS via the Mandatory Insurer Reporting (MIR) process would be used to determine whether Medicare is the primary or secondary payer of any bill received by Medicare on any given claim, this announcement makes it clear that as of January 1, 2016, CMS will in fact start using the ICD-9 or ICD-10 reported by employer/carrier/TPA/agent to determine whether Medicare should pay or deny such bills.

As a result, with ICD-10 requirements starting October 1, 2015, now more than ever, every employer, carrier, third party administrator, or agent reporting such information to CMS needs to make sure that the ICD-9 or ICD-10 codes provided to CMS are accurate and comply with the applicable guidelines. Not doing so may result in Medicare paying for items it should not have paid for, or denying payments on items it should have paid. Either way, these errors and mistakes may become the source of potential private causes of action under the MSP, or liability and professional malpractice claims away from the MSP.

As an industry leader delivering what I believe to be the best platform for MIR compliance through MedicareConnect℠, Helios can assist RREs, TPAs and insurers ensure the proper use of ICD coding throughout all areas of MSP compliance. Coding the claim correctly means the best possible outcome once the claim is reported to CMS. As a result, Helios recommends the reporting process itself should be reliable and allow for sufficient guidance to ensure the claim is accepted by CMS without the issues of mixed coding or utilization of codes not acceptable by CMS for NGHP Section 111, including where plan type may prevent usage of specific codes. To learn more about Helios’ MedicareConnect℠, please contact us at 888.672.7674, or contactus@helioscomp.com, or www.helioscomp.com/settlement-solutions/medicareconnect-mir.

Modification of Query Matching Criteria for Partial SSNs

Post by Frank Fairchok MedicareConnect℠ Senior Manager

Post by
Frank Fairchok
MedicareConnect℠ Senior Manager

CMS has released an alert to notify all users that they have modified the matching criteria for queries where the full Social Security Number could not be obtained and a five-digit SSN was provided. This change, which is effective immediately, fixes an issue where false beneficiary matches were made when the partial SSN and only three of the other four query fields were matched with the existing full SSN logic. CMS will now utilize the partial SSN and the other four query elements as detailed here:

  • First initial of the first name
  • First 6 characters of the last name
  • Date of birth (DOB)
  • Gender

Per CMS, when an exact match on the partial SSN is found, then all of the other four remaining data elements must be matched to the individual exactly. However the matching criteria for HICNs and full SSNs will remain the same.

It is important to note that CMS encourages RREs to submit the HICN or full SSN when it is available to ensure the most accurate match is obtained. CMS reminds RREs in this alert that failure to match to a Medicare beneficiary with the full or partial SSN does not negate the RRE’s Section 111 mandatory reporting requirement when a reportable claim exists.

This alert, dated and released on June 18, 2015, can be found at the following address: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Downloads/New-Downloads/Technical-Alert-Modification-of-Matching-Criteria-Used-When-Reporting-Partial-Social-Security-Numbers-for-Liability-Insurance.pdf

For more information, please contact Frank Fairchok, Senior Manager of MedicareConnect at Frank.Fairchok@helioscomp.com.

2016 Budget Proposal Would Require Reporting of Workers’ Compensation Benefits to Social Security Administration

heatherThe Social Security Administration (SSA) has been vocal in the past about its difficulty in obtaining information about workers’ compensation benefits. The primary reason that the SSA has been seeking this information is to reduce social security benefits by way of an SSDI/WC offset. The SSDI/WC offset is a calculation used by the SSA to reduce a beneficiary’s SSDI benefit amount if the person is also receiving workers’ compensation benefits. The SSDI/WC offset is different in every state and applies only when the individual’s combined monthly amounts of SSDI and workers’ compensation are greater than 80% of individual’s pre-disability “average current earnings.”

The SSA currently has to rely on beneficiaries to report to the SSA when they receive workers’ compensation or public disability benefits. President Obama’s 2016 budget proposal includes a provision to establish a new federal requirement that workers’ compensation and public disability benefit information be provided by states, local governments, and private insurers to the SSA.

The budget proposal summary includes the narrative below:

Establish Workers’ Compensation Information Reporting. Current law requires SSA to reduce an individual’s Disability Insurance (DI) benefit if he or she receives workers’ compensation (WC) or public disability benefits (PDB). SSA currently relies upon beneficiaries to report when they receive these benefits. This proposal would improve program integrity by requiring states, local governments, and private insurers that administer WC and PDB to provide this information to SSA. Furthermore, this proposal would provide for the development and implementation of a system to collect such information from states, local governments, and insurers.

The proposal can be found here: http://www.ssa.gov/budget/FY16Files/2016BO.pdf (the workers’ compensation reporting proposal can be found on page 22, section 10 of the document).

In summary, ultimately the proposal’s objective is to have states, local governments and insurers report SSDI beneficiaries to the SSA so that it can use the SSDI offset in more cases and ultimately preserve the fiscal integrity of the Social Security program.

This SSA reporting proposal might be giving payers déjà vu of the ultimate goal of MMSEA Section 111, which is to reduce the shifting of the burden to Medicare and so that Medicare can recoup more conditional payments.

Ultimately, the SSA and Medicare have the same end goal, which is saving money and preserving their respective SSA and Medicare programs. Helios would hope that if this SSA reporting proposal becomes a reality that the SSA and Medicare would solidify these efforts into a single reporting solution/requirement since the SSA and Medicare will often be receiving duplicative data.

Helios will be following this reporting proposal and will keep subscribers apprised of any further progress on this proposal.