For insurance carriers and self-insureds—known as Responsible Reporting Entities (RREs)—Section 111 can be a daunting obligation. In fact, it’s the only Medicare Secondary Payer (MSP) compliance area associated with a civil money penalty (CMP). While this penalty hasn’t yet been levied, the Centers for Medicare and Medicaid Services (CMS) has indicated that later in 2019 it will be introducing a proposed rule to allow CMS to effectuate a penalty for Section 111 noncompliance. With civil money penalties on the horizon, it’s time to focus on what really matters in Section 111 to remain compliant and avoid potential penalties.
The Importance of the Query Process
Although MSP requires that RREs determine if an injured party is on Medicare, its rules don’t specify using a query process. However, the most streamlined and efficient way to determine an injured party’s eligibility is through the query process. In fact, successful reporting may depend on it, because failing to properly identify beneficiaries can expose an RRE to reporting failure.
If a Medicare beneficiary is not identified and there’s a subsequent reporting trigger, it’s possible that the event may not be reported via Section 111. Conversely, the claim record will be rejected if a reported individual is not a Medicare beneficiary and is noted as such through the Section 111 process.
To query an injured party properly, an RRE must submit the following information:
- Medicare ID [the Health Insurance Claim Number (HICN) or the Medicare Beneficiary Identifier (MBI)] or Social Security number (partial SSN with last five digits is acceptable)
- first initial of the first name
- first six characters of the last name
- date of birth (DOB)
The Benefits Coordination & Recovery Center (BCRC) must find an exact match on the Medicare ID or SSN. Then, at least three of the four remaining criteria must match exactly. Note that all four must match if the partial SSN is used.
It’s vital that an injured party is correctly identified as a Medicare beneficiary to ensure that the claim is properly reported should a reporting trigger arise.
Identifying Reporting Triggers
For all Non-Group Health Plan (NGHP) claims, Ongoing Responsibility for Medicals (ORM) that existed or exists on or after January 1, 2010, must be reported (notwithstanding the workers’ compensation ORM exclusion for medical-only claims under $750 and the Special Qualified Reporting Exception). Typically, ORM is associated with workers’ compensation and no-fault claims. The Section 111 User Guide indicates:
The trigger for reporting ORM is the assumption of ORM by the RRE—when the RRE has made a determination to assume responsibility for ORM, or is otherwise required to assume ORM… If an RRE has assumed ORM, the RRE is reimbursing a provider, or the injured party, for specific medical procedures, treatment, services, or devices (doctor’s visit, surgery, ambulance transport, etc.).
From Section 111 User Guide, Chapter III: Policy Guidance, ch. 6.3.1.
Reporting assumption of ORM by the RRE allows Medicare to coordinate benefits properly (i.e., not pay for services for which the RRE is responsible) and to identify instances in which Medicare may seek conditional payment reimbursement. The failure to properly identify and report ORM, when it exists, could subject an RRE to a potential penalty.
When ORM ceases, the RRE must report the date this occurred. But as long as ORM is subject to reopening or to an additional request for repayment, the ORM termination date should not be reported. Examples of when an RRE may terminate ORM are:
- death of an injured party
- RRE’s responsibility for ORM has been terminated under applicable state law (i.e., a settlement or court order)
- RRE’s responsibility has been terminated per the terms of the applicable insurance policy (i.e., coverage benefits have been exhausted)
CMS also outlines an additional instance in which ORM may be terminated:
Where there is no practical likelihood of associated future medical treatment, an RRE may submit a termination date for ORM if it maintains a statement (hard copy or electronic) signed by the beneficiary’s treating physician that no additional medical items and/or services associated with the claimed injuries will be required.
From Section 111 User Guide, Chapter III: Policy Guidance, ch. 6.3.2.
TPOC Reporting Requirements
RREs are also required to report Total Payment Obligation to the Claimant (TPOC) events. The TPOC event consists of reporting an applicable amount and date. The TPOC amount, “refers to the dollar amount of a settlement, judgment, award, or other payment in addition to or apart from ORM. A TPOC generally reflects a ‘one-time’ or ‘lump sum’ settlement, judgment, award, or other payment intended to resolve or partially resolve a claim. It is the dollar amount of the total payment obligation to, or on behalf of, the injured party in connection with the settlement, judgment, award, or other payment” (Section 111 User Guide, Chapter III: Policy Guidance, ch. 6.4.).
The TPOC date is the calendar date when the obligation was established. It’s typically the date the underlying agreement was signed, unless court approval is required. If court approval is required, it’s the date the obligation is executed or the date of court approval, whichever occurs later. Absent a written agreement, the TPOC date is the date the payment is issued.
Planning to Be Penalty-Free in the Future
Steering clear of CMS penalties is more than possible by implementing a meticulous query process and being mindful of the regulations surrounding ongoing medicals and total payment obligations. For more information on Section 111 best practices, contact us at ISO Claims Partners and bookmark this blog.
. It should be noted that there is a Special Qualified Reporting Exception for ORM assumed prior to January 1, 2010, that allows an RRE to forgo reporting ORM (even though ORM continues as of January 1, 2010) under certain circumstances (Section 111 User Guide, Chapter III: Policy Guidance, ch. 6.3.3.).