Tag Archives: SMART Act

As Medicare Conditional Payment Appeal Rules for Plans/Payers Become Effective 4/28/15, CMS to Host Webinar to Explain New Process and Offer Tips and Suggestions for Plans/Payers

RG Helios Professional Pictures (2)On April 22, 2015, the Centers for Medicare and Medicaid Services Financial Services Group (CMS) published a memo announcing the latest changes on “Appeal Rights for Applicable Plans for Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation.”

By way of background, the memo indicates that “on February 27, 2015, CMS issued a final rule implementing certain provisions of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act). This final rule established a formal appeals process for applicable plans in situations where the Secretary seeks Medicare Secondary Payer (MSP) recovery directly from an applicable plan. The rule is effective on April 28, 2015 and applies to demand letters issued on or after April 28, 2015.”

As defined in the new regulations, “applicable plans include liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans. The SMART Act further requires that the Medicare beneficiary who received the items and/or services in question be notified of the applicable plan’s intent to appeal. The final rule can be found at 80 FR 10611, February 27, 2015.”

If an MSP recovery demand is issued to the beneficiary as the identified debtor, the beneficiary has formal administrative appeal and judicial review rights. Prior to this regulation however, “recovery demands issued to the applicable plan as the identified debtor had no formal administrative appeal rights or judicial review.” However these new rules change that as” the appeals process established in the final rule parallels the existing process for claims-based beneficiary and other appeals for both non-MSP and MSP, and is used for appeals involving both prepayment denials as well as overpayments.”

The memo explains that the final rule establishes a formal multilevel appeal process for applicable plans where MSP recovery is pursued directly from the applicable plan. This process includes:

  • An “initial determination” (the MSP recovery demand letter),
  • A “redetermination” by the contractor issuing the recovery demand,
  • A “reconsideration” by a Qualified Independent Contractor,
  • A hearing by an administrative law judge (ALJ),
  • A review by the Departmental Appeals Board’s Medicare Appeals Council, and
  • Judicial review.

The memo makes it clear that “the applicable plan is the only entity with appeal rights/party status when Medicare pursues recovery directly from the applicable plan. The beneficiary is not a party to applicable plan appeals. However, CMS is required to provide notice to the beneficiary of the applicable plan’s intent to appeal and will provide such notice if the applicable plan files a request for a redetermination.”

The memo also explains that “proper proof of representation must be submitted in writing prior to or with a request for appeal in order for an attorney, agent or other entity to file an appeal on behalf of an applicable plan or act on behalf of an applicable plan with respect to an appeal that has been requested.” Appeal requests without proper proof of representation will be dismissed. “Proper proof of representation may be submitted with a request to vacate the dismissal, but the better course of action is to make sure that proper proof of representation has been submitted when requesting a redetermination.” Separate proof of representation is required even where an applicable plan may have identified an agent for recovery correspondence as part of the Medicare, Medicaid & SCHIP Extension Act of 2007 Section 111 reporting process.

The memo indicates that “the applicable plan may appeal the amount of the debt and/or the existence of the debt. However, the regulation does not permit applicable plans to appeal the issue of who is the responsible party/correct debtor. Requests for appeal on the basis that the applicable plan is not the correct debtor will therefore be dismissed. Medicare’s decision regarding who or what entity it is pursuing recovery from is not subject to appeal.”

CMS’ memo can be found here.

In order to assist and inform interested parties and stakeholders, CMS also announced it will be presenting a webinar on “Applicable Plan” Appeals. The presentation will include “an introduction to the appeals process (as the process is new to applicable plans), information on the appeals process specific to applicable plans, and tips/suggestions to applicable plans regarding the recovery process, including appeals.” The webinar will be held on April 28, 2015 at 1:00 PM Eastern time, and sign-ups are now open. CMS has asked that those planning on attending begin logging in approximately 15 minutes before the start time, due to the large number of anticipated participants.

For those of you interested in learning more about what this new appeals process means for payers, please visit  this article on workcompwire.com where I discuss that the MSP Act has always provided the Medicare beneficiary with the right to seek an appeal if he or she disagreed with the amount of the reimbursement sought by Medicare. However, despite considering workers’ compensation plans, liability and no-fault insurers, and self-insurers as primary payers, the MSP Act did not include an appeals process for these non-group health plans (NGHPs). If a payer disagreed with Medicare’s assessment of a conditional payment owed, there was no formal process for an appeal. In 2013, the Strengthening Medicare and Reimbursing Tax Payers (SMART) Act proposed an amendment to the MSP, which would give NGHPs the right to appeal and a formal appeals process when Medicare pursued a recovery directly from them. After more than a year of collecting and considering public comment, CMS published the final rule, which becomes effective April 28, 2015. Finally, employers, carriers, and administrators in the workers’ compensation system will have a process to voice their disagreement or concerns with the items and amount of Medicare reimbursement.

CMS Issues Alert Regarding Change in Reporting SSNs/HICNs Pursuant to the SMART Act

Just yesterday, September 10, 2014, CMS issued an alert which modifies the requirements relating to the reporting of HICNs and SSNs by NGHP RREs. The alert can be found here.

Pursuant to the SMART Act, CMS was required to do the following: “not later than 18 months after the date of enactment of this bill, the Secretary of HHS shall permit but not require to access or report the beneficiary’s social security account numbers or health identification claim numbers.”

As a result, CMS has issued this alert which provides that effective January 5, 2015, where an NGHP RRE cannot obtain an individual’s HICN or full SSN, RREs may report the following data elements that will enable CMS to properly identify a Medicare beneficiary: 1) last five digits of SSN, 2) first initial, 3) surname, 4) date of birth, and 5) gender.

If NGHP RREs are unable to obtain or do not provide the HICN, full SSN, or any of the above listed data elements, they must document their attempts to obtain this information (RREs may use the model language provided by CMS located in the Downloads section of the MIR for NGHP page at http://go.cms.gov/mirnghp).

CMS states within the alert that a subsequent alert will be published prior to the January 5, 2015 implementation, which will include additional instructions for entry of the partial SSN into the Claim Input File or Query Input File.

While Helios Settlement Solutions applauds CMS for taking action on this requirement of the SMART Act, some questions remain:

1) Within the alert, CMS states that they currently highly recommend, but do not require, that NGHP RREs submit the HICN or full SSN as part of their reports. However, CMS does currently require the HICN/full SSN to obtain a match in their system when reporting, so this statement seems to contradict current requirements. We assume that this is a scrivener error and that CMS meant to say that full SSNs/HICNs will be recommended but not required come January 5, 2015.

2) While it is helpful that an RRE will no longer have to obtain a full SSN come January 5, 2015, it is unclear that if a claimant is unwilling to provide a full SSN, whether they would then be willing to still provide the last 5 digits of the SSN. On a good note, however, and as mentioned above, if the RRE still cannot obtain the last 5 digits of the SSN, the RRE can document its attempts to obtain this information.

Helios will keep our subscribers updated on any additional developments. For questions, please contact asktheexperts@medicareinsights.com.

CMS to Extend Deadline for Reporting SSNs?

Pursuant to section 204 of the SMART Act, within 18 months of the enactment of the SMART Act (which is July 10, 2014), CMS was required to modify MMSEA Section 111 Reporting Requirements so that an RRE was no longer required to report social security numbers (SSNs) or health insurance  claim numbers (HICNs).  However, within section 204, CMS was provided with the ability to extend this deadline for 1 year periods if the Secretary notifies Congress that without the extension, it would threaten patient privacy or the integrity of the Medicare Secondary Payer (MSP) program.

Now that July 10th has came and CMS has not implemented this change, it is expected that CMS will soon file for the 1 year extension; however, we remain hopeful that CMS will soon implement this provision of the SMART Act.

In the meantime, RREs that are unable to obtain a beneficiary’s SSN have a few options to remain compliant. CMS has provided the industry with a method to document and demonstrate good faith efforts to obtain SSNs from Medicare beneficiaries through the use of a form that has model language created by CMS to request the information required for reporting under MMSEA Section 111. This document can be found here.

Additionally, there is case law precedent in which a carrier refused to tender a settlement due to the beneficiary not providing their SSN (See Seger v. Tank Connection, LLC and Hackley v. Garofano). In these cases, the courts sided with the RREs and required the beneficiaries to provide their SSN so that the RRE could be in compliance with the MMSEA and not subject to fines.

Therefore, if needed, RREs can document their good faith efforts to obtain SSNs and/or bring the matter to court if the beneficiary refuses to provide their SSN. We will keep our subscribers updated on any developments on the SMART Act and any filings by CMS with respect to this particular provision.

CMS Clarifies Reporting Threshold for Liability Settlements

On February 19, 2014, we issued a blog notifying subscribers that CMS had issued a Liability Insurance Reporting and Recovery Threshold pursuant to the SMART Act of $1000. On February 28, 2014, CMS issued another alert clarifying that its reporting threshold will be moved from $300 to $1000 for liability claims resolved on/after October 1, 2014.

The alert states the following:

An updated MMSEA Section 111 Non-Group Health Plan (NGHP) User Guide, Version 4.2, Chapters I – V is now available in the Downloads section of the NGHP User Guide page. This version documents the change in reporting threshold for certain liability insurance (including self-insurance) settlements, judgments, awards, or other payments. Please refer to page 1-1 of each Chapter for a summary of updates made.

The Centers for Medicare & Medicaid Services (CMS) would like to clarify for certain liability insurance (including self-insurance) settlements, judgments, awards,
or other payments:

  • The current mandatory reporting threshold for liability insurance (including
    self-insurance) Total Payment Obligation to the Claimant (TPOC) is $2000 and
    over for TPOCs dated on or after October 1, 2013.
  • The mandatory reporting threshold for liability (including self-insurance) TPOCs dated October 1, 2014 and after is changing from $300 to $1000. If the most recent TPOC Date is on or after October 1, 2014, and the cumulative TPOC Amount is greater than $1000, the TPOC(s) must be reported no later than the end of the RRE’s submission timeframe in the quarter beginning January 1, 2015.
  • Error code CJ07 has not been updated to reflect this change. Further guidance will be provided at a later date concerning changes to this error code to coincide with the new reporting threshold of $1000.

These changes will also be applied to the downloadable version of the MMSEA Section 111 Coordination of Benefits Secure Website (COBSW) User Guide, available on the COBSW.