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CMS releases new NGHP Section 111 policy alert regarding the funding beyond the TPOC start date field

The Centers for Medicare and Medicaid Services (CMS) has released a new Non-Health Group Plan (NGHP) Section 111 Policy Alert regarding the funding delayed beyond the total payment obligation to the claimant (TPOC)[1] start date field.

Nghp User Guide Chapter Iii Policies V6 6 20 To 6 21

As part of this new Alert, CMS “reminds” Responsible Reporting Entities (RREs)[2] to provide the actual or estimated date of funding in situations where funding of a TPOC will be delayed beyond the TPOC start date. On this point, CMS indicates that some RREs are failing to indicate a Funding Delayed Beyond TPOC Start Date when funds have not yet been released. This has resulted in CMS recovery demands being sent based upon the receipt of a TPOC date and TPOC amount before the funds for the settlement have been received by the beneficiary.  Further, CMS states the Funding Delayed Beyond TPOC Start Date is used to ensure an RRE is not found non-compliant with the Section 111 timeliness reporting requirements when a settlement has been made, but the final payment amount has not yet been determined or dispersed. 

While CMS describes the information outlined in the new Alert as a “reminder,” from the authors’ review it appears that some of the information contained in CMS’s new Alert is presented for the first time.  Specifically, certain wording in the Alert could be potentially viewed as being inconsistent with long-established published guidance and CMS’s historical instructions on this reporting point.

The authors provide an overview of CMS’s new Alert and related thoughts as follows:

New Policy Alert: Funding Delayed Beyond the TPOC Start Date Field

CMS’s new Alert states in full as follows:

This is a reminder that if funding is delayed after the settlement date reported in Field 80: TPOC Date, in the Claim Input File Detail Record, RREs should provide the actual or estimated date of the funding determination in Field 82: Funding Delayed Beyond TPOC Start Date.

Some RREs are failing to indicate a Funding Delayed Beyond TPOC Start Date when funds have not yet been released. This has resulted in CMS recovery demands being sent based upon the receipt of a TPOC date and TPOC amount before the funds for the settlement have been received by the beneficiary.

As soon as CMS receives a report of a TPOC Date and corresponding TPOC Amount, CMS begins its recovery process to collect Medicare claims conditionally paid that are covered by the TPOC. The Funding Delayed Beyond TPOC Start Date is used to delay the recovery process so as not to negatively impact the beneficiary prior to receipt of the settlement proceeds.

In addition, the Funding Delayed Beyond TPOC Start Date is used to ensure an RRE is not found non-compliant with the Section 111 timeliness reporting requirements when a settlement has been made, but the final payment amount has not yet been determined or dispersed.

CMS’s Alert in the bigger picture

As noted above, as part of CMS’s new Alert, the agency reports that “[s]ome RREs are failing to indicate a Funding Delayed Beyond TPOC Start Date when funds have not yet been released.” (Authors’ emphasis). However, the authors note that historically, and as stated within CMS’s current Section 111 NGHP User Guide (“User Guide”),[3] CMS’s instructions have focused on using the date of funding “determination” and not when funds have been “released.” 

On this point, the authors note the following instructions regarding the Funding Delayed Beyond TPOC Start Date field as contained in CMS’s current User Guide:

  • Chapter III, Section 6.5.1

The authors’ note that historically CMS has identified the Funding Delayed Beyond TPOC Start Date field (Field 82) as intended for use in scenarios where, as of the TPOC Date, the TPOC Amount to be paid, to or on behalf of the beneficiary, has yet to be determined.  This guidance has been consistently stated in Section 6.5.1 (6-20 to 6-21) of Chapter III of CMS’s User Guide[4]  and remains part of this section today. In Section 6.5.1, CMS instructs RREs, in part, that the date to be reported within the Funding Delayed Beyond TPOC Start Date is “the date a determination is made, as to the amount to be paid to or on behalf of the beneficiary.”

  • Chapter V, Appendix A

In Chapter V, Appendix A of the current User Guide, the description field of the Claim Input File Detail Record field 82 (Funding Delayed Beyond TPOC Start Date 1 – page A-23), states: “If funding is determined after the settlement date (in TPOC Date field), provide actual or estimated date of funding determination.”  This same language is contained within the Claim Input File Auxiliary Record fields 95, 98, 101 and 104 (Funding Delayed Beyond TPOC Start Dates 2 – 5).  

In reviewing each of the noted User Guide sections above, the authors note that reference is made to the “date of funding determination” and there is no reference to when the funds are “released” as now contained in CMS’s new Alert.

 On this point, it is worthy to note the distinction between the date of funding determination and the date that funds have been released. These are two very separate and distinct concepts and CMS has not, prior to this new Alert, instructed RREs to report the date that TPOC funds are “released” or the date upon which the RRE’s payment obligation has been fully met regarding the Funding Delayed Beyond TPOC Start Date field (Field 82).  In this regard, from the authors’ view, CMS would appear to have now repurposed the Funding Delayed Beyond TPOC Start Date for use in reporting the date that funds have been, or are anticipated to be, “released.”  It is unclear if CMS now intends, in fact, to require RREs to utilize the Funding Delayed Beyond TPOC Start Date to report the date that TPOC funds have been or are expected to be “released” as could be potentially understood from the wording in the new Alert.  If this is in fact CMS’s intention, this would appear to be inconsistent with the guidance and instructions the agency has historically provided on this topic --- and which is still contained within the User Guide as noted above.

Further, in looking at the final paragraph of the Alert, CMS indicates, almost as an aside, the fact that the Funding Delayed Beyond TPOC Start Date field is also used to ensure that an RRE is not found to be non-compliant in regard to timeliness of reporting requirements when funding has yet to be determined as of the TPOC Date.  Although, per reading of CMS’ current User Guide and per guidance provided historically, one might have assumed this was actually the sole purpose of this particular data element.

Taking all this into consideration, and to the extent CMS does in fact intend to require the report of the date funds are either “released” or anticipated to be “released” via the Funding Delayed Beyond Start Date field, this could have a significant impact for RREs in TPOC reporting scenarios.  For example, while scenarios in which a determination of funding is not yet known as of the TPOC Date are often limited to litigation involving multiple plaintiffs, scenarios where funding has not been released as of the TPOC Date are very common in cases involving a single plaintiff.  As part of the typical settlement, funding will not commonly occur simultaneously with, or immediately upon, determination of a settlement obligation.  That being the case, while the Funding Delayed Beyond TPOC Start Date would, when following CMS’s published guidance as contained in Chapter III, Section 6.5.1 of the User Guide, have been a data element not commonly required, the current Alert would seem to indicate that, if the expectation is that this field should reflect the date funds will be “released,”  this data element may now be expected to be reported in most TPOC scenarios.  However, this may require additional clarification from CMS.

Questions?

Please do not hesitate to contact the authors if you have any questions regarding CMS’s new Alert, or any other issues related to Section 111 reporting.


[1] CMS states that the TPOC reporting trigger refers to the dollar amount of a settlement, judgment, award, or other payment, in addition to or apart from ORM. CMS’s Section 111 NGHP User Guide, Chapter III (Version 6.5, October 4, 2021), Chapter 6, section 6.4. In general, CMS describes TPOC as a “one-time” or “lump sum” payment intended to resolve or partially resolve a claim. Id.  A TPOC is the dollar amount paid to, or on behalf of, the claimant in relation to a settlement, judgment, award, or other payment. Id. CMS states that the computation of the TPOC amount “includes, but is not limited to, all Medicare covered and non-covered medical expenses related to the claim(s), indemnity (lost wages, property damages, etc.), attorney fees, set aside amount (if applicable), payout totals for all annuities rather than cost or present values, settlement advances, lien payments (including repayment of Medicare conditional payments), and amounts forgiven by the carrier/insurer.” Id.

[2] Responsible Reporting Entities (RREs) are the parties who are obligated to report under Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173).  While Section 111 applies to both group health plans (GHP) and non-group health plans (NGHP) (i.e. workers’ compensation, liability, self-insurance, and no-fault insurance), references to Section 111 in this article relate to Section 111 reporting in the NGHP context as codified at 42 § U.S.C. 1395y(b)(8). In general, RREs are insurers and self-insurers, but could involve other entities such as self-insurance pools or assigned claims funds depending on the facts. (See generally, CMS’s Section 111 NGHP User Guide, Chapter III (Version 6.5, October 4, 2021), Chapter 6.   Expanding on this concept further, 42 U.S.C.  § 1395y(b)(8) provides that the “applicable plan” is the RRE and defines the term “applicable plan” to include liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans.)  However, claimants and their lawyers are not RREs and do not have reporting responsibilities under Section 111. Id.

[3] The current User Guide is: CMS’s Section 111 NGHP User Guide (Version 6.5, October 4, 2021).

[4] CMS’s Section 111 NGHP User Guide, Chapter III, Section 6.5.1 (Version 6.5, October 4, 2021).


Mark Popolizio, J.D.

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.

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.


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