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CMS announces that Section 111 Medicare Secondary Payer (MSP) records will accept future effective date starting October 4th

On September 27, 2021, the Centers for Medicare and Medicaid Services (CMS) released a notice announcing that starting October 4, 2021 the Benefits Coordination and Recovery Center (BCRC) will accept MSP effective dates up to three months in the future for certain Non-Group Health Plan (NGHP) claims.  The following provides a general overview of CMS’s notice and its potential wider impact:

Cms Releases New Nghp Section 111 User Guide (version 6

CMS’s notice outlines its new Section 111 compliance updates

CMS’s notice states in full as follows:

Effective October 4, 2021, Section 111 MSP record submissions will accept effective dates up to three months in the future for certain Non-Group Health Plan (NGHP) claims.  Because Medicare entitlement records may have effective dates up to three months in the future, CMS is updating the COB&R systems to accept these future MSP effective dates. When a S111 Ongoing Responsibility for Medical (ORM) NGHP record is submitted, and the Medicare Beneficiary’s entitlement is in the future (up to 3 months), the system will now create an MSP record with a future MSP Effective Date.  For example, if a Responsible Reporting Entity submits a claim that it has an ORM for on 10/05/2021 and the beneficiary’s Medicare entitlement date is 01/01/2022, the Benefits Coordination and Recovery Center (BCRC) will now accept the Medicare entitlement date

New changes starting October 4th

From the authors’ view, the likely primary impact of CMS’s new policy change, though not necessarily the exclusive impact, will relate mostly to the reporting of individuals who are Medicare eligible based on age (i.e. individuals approaching their 65th birthday) who are three months away from their actual entitlement to Medicare benefits.  These individuals are generally added to CMS’ system with CMS creating a beneficiary profile approximately three months prior to their Medicare entitlement becoming effective. Currently, in this situation, if a query is submitted for one of these individuals during the three- month period before his/her Medicare entitlement becomes effective, CMS will return a “positive” eligibility response via the RRE’s Query Response File, despite the fact that the individual at that point in time is not yet entitled to Medicare. 

In this scenario, based on the positive eligibility response received via their monthly Query Response File, RREs may submit a Section 111 coverage record to CMS via their Claim Input file prior to the point in time that the claimant technically becomes a Medicare beneficiary.  In response to an RRE’s reporting of a coverage record in this instance, CMS, prior to April 2021, would return an ‘SP31’ error in relation to these pre-Medicare entitlement submissions, which indicated that the reported claimant was not yet entitled to Medicare and which also directed the RRE to resubmit the coverage record as part of its next quarterly Claim Input File submission.  However, starting in April 2021, CMS retired the ‘SP31’ error and began to simply return an ‘03’ (non-overlapping coverage) disposition code when a coverage record is submitted prior to the beneficiary’s entitlement date.  In cases involving open ORM coverage, the RRE is similarly required to resubmit the coverages which received the ‘03’ disposition, just as they would have been required to resubmit upon receipt of the older ‘SP31’ error, via their next quarterly Claim Input File.  See our recent article which discussed these changes.

In relation to the above, starting October 4, 2021, those coverage record submissions, for which CMS returned an ‘SP31’ error prior to April 2021, and for which CMS has been returning an ‘03’ disposition after April 2021, should simply be accepted with an ‘01’ (accepted ORM) disposition code, upon their initial submission.   Thus, rather than CMS continuing to return these submissions with ‘03’ disposition codes, it is anticipated that under CMS’s new policy they will now apply a coverage record within their COB&R systems with a future effective date which mirrors the beneficiary’s Medicare entitlement date. 

For our MSP Navigator, ClaimSearch, and iComply Section 111 reporting customers

Please note CMS’s new policy update will require no technical changes for RREs utilizing any of ISO’s Section 111 reporting platforms (MSP Navigator, ClaimSearch CMS or iComply).  Each of ISO’s reporting platforms have logic in place to automatically resubmit open ended ORM coverage in scenarios for which CMS would presently return an ‘03’ disposition due to a future Medicare entitlement date.  Moving forward, as CMS should simply accept those coverage records involving future Medicare entitlement upon initial submission, the aforementioned system logic would not be triggered as subsequent resubmission would no longer be required.

Questions?

Please do not hesitate to contact the authors if you have any questions regarding CMS’s notice or the information discussed above.


Jeremy Farquhar

Jeremy Farquhar is a senior product consultant at ISO Claims Partners, a Verisk business. You can contact Jeremy at Jeremy.Farquhar@verisk.com.

Mark Popolizio

Mark Popolizio, J.D., is vice president of MSP compliance at ISO Claims Partners, a Verisk business. You can contact Mark at mpopolizio@verisk.com.


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