medicare secondary payer rules: impact of section 111 reporting requirements

1. Medicare Secondary Payer Rules: Impact of Section 111 reporting requirements Rebecca Price, claims manager

2. I just want to take a couple of minutes discussing who might be an RRE and methods of providing feedback to CMS in an attempt to continue to guide the development of their reporting requirements. I started my slides with our timeline which was accurate as of yesterday prior to the CMS townhall call. As Melisa has indicated, the User Guide will be amended with an alert but the speakers on yesterday�s CMS call indicated that submission of production files will be required starting April of next year.I just want to take a couple of minutes discussing who might be an RRE and methods of providing feedback to CMS in an attempt to continue to guide the development of their reporting requirements. I started my slides with our timeline which was accurate as of yesterday prior to the CMS townhall call. As Melisa has indicated, the User Guide will be amended with an alert but the speakers on yesterday�s CMS call indicated that submission of production files will be required starting April of next year.

3. Background: Section 111 Mandatory Medicare Secondary Payer Reporting Section 111 of the MMSEA requires certain "responsible reporting entities" (RREs) to register online between May 1st and June 30, 2009 and to report quarterly to CMS, in a new electronic format, any settlement, judgment, award or other payment made on or after July 1, 2009 which compensates an injured Medicare beneficiary (MB) for personal injury. Penalties for not reporting are $1,000 per day per claim. SKIPSKIP

4. Background: Sec. 111 Mandatory Medicare Secondary Payer Reporting The MMSEA broadly defines an RRE, and can be paraphrased from the current version of the CMS User�s Guide as �any entity which issues a check over $5,000 to compromise a liability claim/lawsuit brought by an injured MB.�� This includes self-insured entities and those that pay the plaintiff directly within a deductible or self-insured retention program.� Because of the burdensome IT requirements, and large potential fines, this definition could create many problems for hospitals and other business entities that may not even be aware of the new reporting requirement. Melisa has briefly gone over terminology and what a Responsible Reporting Entity, or RRE is. It�s important to note that this DOES include self-insured entities--and anyone who pays a claimant or plaintiff directly, even if it is a payment made within a deductible or self-insured retention, or a payment made directly without any insurance involvement at all. The reporting requirements apply to ANY liability scenario, including medical malpractice, general liability, auto, no-fault and others. The CMS definition of an RRE seems to have been intended for large organizations and insurers with the IT systems and regulatory resources already in place to comply with the statute. However, the definition is broad enough that it could create problems for hospitals, clinics, and even non-healthcare related businesses that haven�t even become aware yet that they are considered an RRE, and that this new reporting requirement applies to their entity. ; Melisa has briefly gone over terminology and what a Responsible Reporting Entity, or RRE is. It�s important to note that this DOES include self-insured entities--and anyone who pays a claimant or plaintiff directly, even if it is a payment made within a deductible or self-insured retention, or a payment made directly without any insurance involvement at all. The reporting requirements apply to ANY liability scenario, including medical malpractice, general liability, auto, no-fault and others. The CMS definition of an RRE seems to have been intended for large organizations and insurers with the IT systems and regulatory resources already in place to comply with the statute. However, the definition is broad enough that it could create problems for hospitals, clinics, and even non-healthcare related businesses that haven�t even become aware yet that they are considered an RRE, and that this new reporting requirement applies to their entity. ;

5. CMS Section 111 broadly defines an RRE These payments to a Medicare Beneficiary would require the individual or entity to register as an RRE to report the payment and then report quarterly forever� A small store owner with a $25,000 GL deductible pays $15,000 to a customer who incurred an injury in a fall at his store even though owner is later reimbursed by his insurance company A rural clinic with a $100,000 self-insured deductible pays $8300 to a patient for medical care from another provider due to alleged malpractice Payment amount requiring a report decreases- reporting duty increases 7/1/09 � 12/31/10: = $5,000 1/1/11 � 12/31/11: = $2,000 1/1/12 � 12/31/12: = $600 Once an RRE is registered, CMS requires submission of an �empty file� every quarter even if there are no payments to report! {Once an RRE, always an RRE} To illustrate some situations in which an entity might not currently be considering themselves to be an RRE, we wanted to give some scenarios that could require an RRE registration and a CMS payment report. Let�s say you own a store. A customer (who is a Medicare Beneficiary) trips on a loose stair and fractures her wrist. You pay the customer $15,000 directly, which is within the deductible on your general liability policy. Even if you are reimbursed that $15,000 later by your insurance carrier, you are an RRE by CMS definiition, and that payment needs to be reported. Or let�s say you are the office manager at a small clinic. Your practice carries professional liability insurance but you have a $100,000 self-insured deductible. If you pay $8300 to a patient for medical care that became necessary because of a bad outcome, or because of negligent care provided at your clinic, the is an RRE, and the payment needs to be reported. It�s even possible that a waiver of a bill for care provided at your own clinic, if it is done to prevent or respond to a liability claim, could require a report, depending on the dollar amount of the waiver. As Melisa has noted, the threshold amount triggering a report will initially be $5,000 but over the course of two years, it reduces to $600, which further increases the number of CMS payment reports that could be necessary. And once you register as an RRE, CMS requires a report every quarter, even if the RRE has no payment to report. CMS currently requires RREs to submit a �empty� claim input file during your quarterly reporting period when the RRE has no payments to report.To illustrate some situations in which an entity might not currently be considering themselves to be an RRE, we wanted to give some scenarios that could require an RRE registration and a CMS payment report. Let�s say you own a store. A customer (who is a Medicare Beneficiary) trips on a loose stair and fractures her wrist. You pay the customer $15,000 directly, which is within the deductible on your general liability policy. Even if you are reimbursed that $15,000 later by your insurance carrier, you are an RRE by CMS definiition, and that payment needs to be reported. Or let�s say you are the office manager at a small clinic. Your practice carries professional liability insurance but you have a $100,000 self-insured deductible. If you pay $8300 to a patient for medical care that became necessary because of a bad outcome, or because of negligent care provided at your clinic, the is an RRE, and the payment needs to be reported. It�s even possible that a waiver of a bill for care provided at your own clinic, if it is done to prevent or respond to a liability claim, could require a report, depending on the dollar amount of the waiver. As Melisa has noted, the threshold amount triggering a report will initially be $5,000 but over the course of two years, it reduces to $600, which further increases the number of CMS payment reports that could be necessary. And once you register as an RRE, CMS requires a report every quarter, even if the RRE has no payment to report. CMS currently requires RREs to submit a �empty� claim input file during your quarterly reporting period when the RRE has no payments to report.

6. RREs must understand the reporting requirements Download the CMS Liability Insurance User Guide and the subsequent alerts amending it on the CMS Web site: http://www.cms.hhs.gov/MandatoryInsRep/03_Liability_Self_No_Fault_Insurance_and_Workers_Compensation.asp#TopOfPage Register on the CMS Web site to receive alerts when CMS makes changes to the User Guide or adds notices or resources to the site: https://subscriptions.cms.hhs.gov/service/subscribe.html?custom_id=566&code=USCMS_537 Access the recorded PIMS Web conference "New CMS claim reporting requirements will hit insurers and self-insurers in 2009 (including hospitals and their captives): What you need to do now!� Provides critical information hospitals need to consider as they work to comply with the CMS regulations for reporting liability payments. http://www.premierinc.com/risk/education-newsletters/past.jsp Now that you�re thinking more broadly about the implications of �who might be an RRE� you can see how important it is to arm yourself with information regarding the requirements. Melisa has suggested that everyone should download the CMS User Guide and the amendments to it that CMS has already been posted�and it�s important enough that here�s the link for that again. Also, we suggest you register on the CMS Web site to receive the email alerts CMS will push out whenever there is new information added to the User Guide or when it adds information to their Website. And finally, if you have not had a chance to build a good foundation of knowledge regarding the payment reporting requirements themselves, a recording of our March 16th PIMS Web conference covering this in more detail can be accessed on Premier dot com.Now that you�re thinking more broadly about the implications of �who might be an RRE� you can see how important it is to arm yourself with information regarding the requirements. Melisa has suggested that everyone should download the CMS User Guide and the amendments to it that CMS has already been posted�and it�s important enough that here�s the link for that again. Also, we suggest you register on the CMS Web site to receive the email alerts CMS will push out whenever there is new information added to the User Guide or when it adds information to their Website. And finally, if you have not had a chance to build a good foundation of knowledge regarding the payment reporting requirements themselves, a recording of our March 16th PIMS Web conference covering this in more detail can be accessed on Premier dot com.

7. CMS comment portal Submit comments to CMS urging that the rule be amended: Apply only to insurers and entities that are fully self-insured and are experienced with mandatory reporting compliance Remove the IT burden by creating an internet-based input program to give CMS claims information directly or some other type of manual reporting system for those expecting to make few reports. Eliminate the quarterly �empty� Claim Input File reporting requirement so that entities contracting with external reporting agents will not incur high fees simply to report they have no claims. CMS will accept comments via its Web site ONLY: https://www.cms.hhs.gov/MandatoryInsRep/Downloads/OpportunityToCommentRev041009.pdf CMS has indicated they are still considering industry input into the reporting requirements and process. You can use this portal, which is the same link Melisa provided for your questions to CMS, to urge CMS to amend the new liability reporting requirements to eliminate, or at least ease the burden on hospitals that the requirement creates. Some examples of input we can provide is to ask that CMS consider amending the reporting requirement to apply only to insurers and entities that are fully self insured and are experienced with mandatory reporting compliance. The IT burden on RREs could be eased by the creation of an internet-based input program or secure portal through which CMS claims information could be directly input on a case by case basis, or some other type of manual reporting system for entities that don�t expect to make many payment reports.We have heard from CMS that a more direct and simple method to report a payment is under consideration, but they�ve made no promises, so industry input on that in particular has a potential of really making a difference. It would also benefit all potential RREs to have the quarterly �empty� claim input file requirement eliminated, so consider letting CMS know where you stand. You may have other specific issues or comments pertinent to your region, or your organization, that you may want to submit, and consider involving your state or regional governmental representatives on behalf of your organization and industry. Just remember, CMS will only accept comments via this portal.CMS has indicated they are still considering industry input into the reporting requirements and process. You can use this portal, which is the same link Melisa provided for your questions to CMS, to urge CMS to amend the new liability reporting requirements to eliminate, or at least ease the burden on hospitals that the requirement creates. Some examples of input we can provide is to ask that CMS consider amending the reporting requirement to apply only to insurers and entities that are fully self insured and are experienced with mandatory reporting compliance. The IT burden on RREs could be eased by the creation of an internet-based input program or secure portal through which CMS claims information could be directly input on a case by case basis, or some other type of manual reporting system for entities that don�t expect to make many payment reports.We have heard from CMS that a more direct and simple method to report a payment is under consideration, but they�ve made no promises, so industry input on that in particular has a potential of really making a difference. It would also benefit all potential RREs to have the quarterly �empty� claim input file requirement eliminated, so consider letting CMS know where you stand. You may have other specific issues or comments pertinent to your region, or your organization, that you may want to submit, and consider involving your state or regional governmental representatives on behalf of your organization and industry. Just remember, CMS will only accept comments via this portal.

8. Possible Data Solutions CMS has estimated, on the average, the process of developing the ability to electronically exchange data with CMS will take 375 hours, or three employees 5 hours a day for 25 days. At PIMS, we are fortunate to work with Priscilla Sanchez, our data insurance and reporting manager, who has been looking into vendors and data solutions. CMS has estimated, on the average, the process of developing the ability to electronically exchange data with CMS will take 375 hours, or three employees 5 hours a day for 25 days. At PIMS, we are fortunate to work with Priscilla Sanchez, our data insurance and reporting manager, who has been looking into vendors and data solutions.

10. Vendors include� Reporting Software/Data Companies iSPACE - http://www.ispace.com/ SMART Data Solutions - http://www.sdata.us/ ISO - http://www.iso.com/ CS STARS - http://www.csstars.com/ Reporting and Mandatory Secondary Payer Specialists Piatt Consulting - http://piattconsulting.com/ Corvel - http://www.corvel.com/ Gould & Lamb - http://www.gouldandlamb.com/ Crowe Paradis - http://www.cpscmsa.com/ MedAllocators, Inc - https://www.abilityservicesnetwork.com/#

11. Research the right solution for you� Selecting a vendor is crucial in this process, so it is important to be prepared to perform significant due diligence. First, know how much service you want to perform and where you want them to attach in the process. Then consider the following: Is the company reputable ? Ask for customer referrals This product may be new, but if they have been in business for awhile they should have a good client base. What type of training do they provide? Customer service or help desk availability How much time will your team need to commit? How much of the process do you want to manage? How are updates or modification to CMS rules handled? Does the vendor have policies and procedures in place to address changes? Can your existing work comp. vendor perform reporting? Pricing

12. Fees & Pricing Structures Pricing structures depend on multiple variables Volume of reported claims The number of RREs \ Coordination of multiple business lines Level of training provided Amount of customer service Initial data set-up Organizations with an expected high volume of reportable claims: May elect to have a flat fee structure and not volume driven. Initial set-up fees may range from $4,000 to $50,000 Ongoing quarterly fees may be charged separately and may range from $3,000 to $10,000. Query files may be an additional charge. Organizations with an expected low volume of reportable claims: Some reporting agents are willing to charge per claim reported. Fees range from $18-$25 per claim (a minimum number of claims may apply). Initial set-up fees are common and may start at $4,000, quarterly fees may also apply. Query files may be an additional charge. Additional fees may apply with certain vendors, ensure you thoroughly understand their pricing structure.

13. Consider the resources within your reach� CMS� Section 111 Reporting mandate may seem overwhelming, but you may have the resources to satisfy the requirements. Volume Is the expected volume of reportable claims low enough that your claims department is capable of tracking all reports and response files? IT expertise Does your organization have IT personnel capable of crafting your own solution? Does your IT dept have the bandwidth to create the files required for submission? Electronic Reporting Method Can your organization send data via the required flat files? Flat files are simple plain text files, that contain one record per line. Some additional programming may be required to compile the complete file to be sent to CMS (i.e. include header & trailer records). Your claim department must be able to review any responses from CMS and respond per the CMS User Guide.

14. Additional items to consider File Transmission Method During registration select file transmission methods for the (1) Claim input file and the (2) Query Only File The user guide lists 3 options for transmitting data to CMS. Refer to section 15 �Electronic Data Exchange�. Connect:Direct SFTP HTTPS (Secure Website) � Best method to use for low volume submissions (under 24,000 records), files are uploaded via a secured website. Various Data Elements Refer to the CMS Section 111 MSP Mandatory Reporting User Guide for file layouts: For more information, sign up for the CMS computer based training (CBT) at http://www.cms.hhs.gov/MandatoryInsRep/05_Computer_Based_Training.asp#TopOfPage

15. This slide is sometimes skipped at the presentation if client is aware of �what is PIMS� so the show starts with slide 3 on AEIX PIMS operates independently of premier so you do not have to be a Premier member to participate in AEIX and the educational offerings This slide is sometimes skipped at the presentation if client is aware of �what is PIMS� so the show starts with slide 3 on AEIX PIMS operates independently of premier so you do not have to be a Premier member to participate in AEIX and the educational offerings

16. American Excess Insurance Exchange (AEIX), RRG is an alliance of sophisticated, not-for-profit health systems. Dedicated to financial health and quality care, members work together to enhance risk management protocols for each and every participating organization. Appendix-AEIX: An Alternative To The Commercial Insurance Market An RRG is controlled by federal law, allowing AEIX to domicile in one state (VT) for regulation while being able to write in all 50 states without having to go through the regulatory process with each state. An RRG is basically a captive insurance company formed by the member/owners of the RRG Vermont has the highest number of captives, and has a very well respected regulatory structure. Our employee in Vermont has very good relationships with the regulators. Stability is one of the basic tenants for RRG formation. We have been in business for 19 years while several commercial carriers have gone under, and others enter and leave depending on market conditions An RRG is controlled by federal law, allowing AEIX to domicile in one state (VT) for regulation while being able to write in all 50 states without having to go through the regulatory process with each state. An RRG is basically a captive insurance company formed by the member/owners of the RRG Vermont has the highest number of captives, and has a very well respected regulatory structure. Our employee in Vermont has very good relationships with the regulators. Stability is one of the basic tenants for RRG formation. We have been in business for 19 years while several commercial carriers have gone under, and others enter and leave depending on market conditions

18. Appendix: Definitions Account Manager the individual who controls the administration of an RREs account and manages the overall reporting process. The Account Manager may be an employee or agent (See page 23 of CMS User Guide) Account Designees are individuals who assist the Account Manager with the reporting process and can be employees or agents. (see page 24 of CMS User Guide) Agents are vendors (data service companies, consulting companies, etc) the RRE may contract to act as an agent for reporting purposes. (see page 21 of CMS User Guide) Authorized Representative is the individual in the RRE organization who has the legal authority to bind to a contract and the terms of Section 111. This individual will have ultimate accountability for the RREs compliance with reporting requirements. This individual cannot be an agent. (see page 23 of CMS User Guide) CMS Centers for Medicare & Medicaid Services COBC Coordination of Benefits Contractor hired by Medicare to identify primary payers to Medicare for health benefits available to a Medicare beneficiary and to coordinate the payment process to prevent conditional payment of Medicare benefits. For liability insurance, the data submission process for reporting requirement will be with the COBC. Conditional payment A conditional payment is a Medicare payment for Medicare covered services for which another insurer is primary payer. Conditional payments are made under the condition that they are subject to repayment if and when the primary payer makes payment.

19. Definitions DOI CMS date of incident. A definition of when a loss occurred. In some instances, the definition that CMS uses will be different than that normally used in the insurance industry. Cumulative injury cases will differ in liability and Workers compensation (see user guide Appendix A fields 12-13). HICN Health Insurance Claim Number, The number assigned by the Social Security Administration to an individual identifying him/her as a Medicare beneficiary. This number is shown on the beneficiary's insurance card and is used in processing Medicare claims for that beneficiary (typically the social security # followed by an alpha designator GHP Group Health Plans MMSEA Medicare, Medicaid, SCHIP Extension Act of 2007 which provides that MSP Medicare Secondary Payer is the term used when the Medicare program does not have primary payment responsibility (that is another entity has the responsibility for paying before Medicare) MSPRC Medicare Secondary Payer Recovery Contractor is the contractor hired by Medicare who is responsible for the recovery of amounts owed to the Medicare program as a result of settlements, judgments or awards, or other payments by liability insurance (including self insurance), no fault insurance, or worker�s compensation. NGHP Non-Group Health Plans. Includes liability insurance, self-insured plans, No-fault insurance, Workers Compensation

20. Definitions ORM On-going Responsibility of medicals refers to the RRE�s responsibility to pay, on an ongoing basis, for the inured party�s (Medicare Beneficiary�s) medicals associated with a claim. Typically applies to No-fault and workers compensation claims. SCHIP State Children�s Health Insurance Programs TPOC Total payment obligation to claimant refers to the dollar amount of a settlement, judgment or award or other payment in addition to/apart from ORM.