Medicare Secondary Payer Rules: Impact of Section 111 reporting requirements

1. Rebecca Price, claims manager Medicare Secondary Payer Rules: Impact of Section 111 reporting requirements Presented by Premier Insurance Management Services, Inc.

2. MMSEA Section 111 Timeline-2009 • May 1 to June 30: Registration is now open for all potential RREs with CMS secure Web site (COBSW) • July 1: CMS reporting is triggered for settlements, judgments, and awards made after this date • July 1 to December 31, 2009: Testing data transmissions from RREs/Agents • January 1, 2010: Reporting to CMS begins • Reporting will be quarterly, during a 7 day reporting schedule to be assigned to RRE by CMS

3. Background:Section 111 Mandatory Medicare Secondary Payer Reporting • Section 111 of the MMSEArequires 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.

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.

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}

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

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

8. Possible Data Solutions Priscilla Sanchez, data insurance and reporting managerPremier Insurance Management Services

9. CMS Section 111 Data Vendors Types of vendors in the market Software/Data Companies – deal only with transmitting data to CMS and there is no involvement in the claim settlement process. Reporting and MSP specialists – capable of both transmitting data to CMS and actively participating in the claim settlement process. Strategic Alliances also exist between software/data companies and reporting agents/MSP specialists. 9

10. Vendors include… 10 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 11

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. 12

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. 13

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 14

15. Appendix-Premier Insurance Management Services (PIMS) • PIMS is a wholly-owned subsidiary of Premier, Inc. and is dedicated to helping not-for-profit hospitals. • PIMS manages insurance programs created and governed by hospital systems, offering unique expertise in data management, clinical improvement and claims management. • PIMS provides third party administrative services and unbundled claims, risk management and quality services Our Mission: To improve access to cost-effective insurance coverage and provide expert management services, pushing profits back to the participants whenever possible. This will be accomplished by creating data-driven, quality improvement programs; sharing best practices; leveraging positive results through comparative benchmarking; and capitalizing on efficiencies created through alignment with Premier’s national programs and resources. - Premier Insurance Management Services, Inc.

16. Appendix-AEIX: An Alternative To The Commercial Insurance Market American Excess Insurance Exchange (AEIX), RRGis an alliance of sophisticated, not-for-profit health systems. Dedicated to financialhealth and quality care, members work together to enhance risk management protocols for each and every participating organization. • AEIX is a 100% policyholder-owned insurance company. • Started by owners of Premier; first policy written June 1990. (AEIX is independent of Premier, Inc.). • Regulated by the State of Vermont Department of Insurance. • AEIX contracts with Premier Insurance Management Services for all management and operational duties/functions. For more information about AEIX or PIMS contact Les Meredith at (858) 509-6529

17. APPENDIX: Acronyms 17

18. Appendix: Definitions Account Manager the individualwho 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. 18

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 Contractoris 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 19

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. 20

21. Appendix-PIMS Contacts • Les Meredith, vice president claims 858-509-6529/les_meredith@premierinc.com • Becca Price, claims manager 858-509-6598/becca_price@premierinc.com • Priscilla Sanchez, data insurance and reporting manager 858-509-6588/priscilla_sanchez@premierinc.com