• CMS Posts New Guidance on Medicare Secondary Payer Mandatory Reporting
  • March 19, 2010 | Authors: Ramy Fayed; Sean McEneaney; Janice H. Ziegler
  • Law Firms: SNR Denton - Washington Office ; SNR Denton - Chicago Office
  • Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 ("Section 111") imposes mandatory reporting obligations on certain entities, such as liability insurance (including self-insurance), no fault insurance and workers' compensation plans (commonly referred to as "non-group health plans" or "NGHPs").  Hospitals and other entities may be "self-insurers" in certain instances, including where they rely on self-insurance retention arrangements to handle liability claims.

    The secretary of the U. S. Department of Health and Human Services is authorized to implement the mandatory reporting requirements "by program instruction or otherwise."  As a result, the program requirements are being implemented through sub-regulatory guidance, including a user guide and certain supplemental alerts.  The Section 111 requirements have garnered much attention because entities that fail to report as required may be subject to civil monetary penalties of $1,000 a day for each instance of non-reporting.

    Last week, the Centers for Medicare & Medicaid Services ("CMS") released several important documents relating to the Section 111 reporting requirements, including a revised NGHP User Guide that (among other things) clarify changes in the previously announced reporting deadlines, and several other guidance documents.

    Three New Alerts

    On February 25, 2010, CMS posted alerts on the following subjects:

    • Who Must Report.  This alert provides guidance on several issues relating to the critical, threshold determination of who/what entity is required to report as a Responsible Reporting Entity ("RRE").  This document is an update to the guidance that CMS issued in draft on July 31, 2009, and is meant to respond to various comments received from potentially affected parties.  Among other things, CMS has changed its position with respect to reporting by insured entities who physically pay a claimant based on a deductible.  CMS now maintains that "where the self-insurance in question is a deductible, and the insurer is responsible for Section 111 reporting with respect to the policy, [the insurer] is responsible for reporting both the deductible and any amount in excess of the deductible."  Put otherwise, in such an instance the deductible is not generally to be reported by the insured.  But, if the insured "acts without recourse to its insurance" (e.g., does not inform its insurer of the claims payment), the insured is responsible for Section 111 reporting with respect to the claim regardless of whether the settlement amount is within the deductible or in excess of the deductible (available at https://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPAlertRREsWhoMustReport.pdf).
    • RRE Compliance.   This alert provides that CMS will consider RREs to be in compliance with the Section 111 reporting requirements (and, thus, presumably not subject to civil monetary penalties) to the extent that the RREs take certain registration, testing and data exchange steps described in the alert.  CMS states that RREs are expected to compile the data required by the Section 111 reporting requirements and should maintain a record or case file of all of the RRE's data development activities (available at https://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPComplianceAlert022410.pdf).
    • NGHP Risk Management and Other Issues.  This alert identifies certain situations, including risk management activity and clinical trials where the sponsor has agreed to pay for items or services related to injuries or complications, where CMS intends to issue additional guidance for Section 111 reporting purposes.  CMS indicates that RREs do not need to report information on these activities until the guidance is published.  The alert also indicates that additional guidance will be published on other matters, including reporting by foreign insurers and the use of fields 58¿62, which were originally intended to deal with "mass tort" situations but are under active consideration and will be modified (available at https://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPAlertRiskMgmt022410.pdf).

    Updated User Guide

    On February 26, 2010, CMS issued an updated version of the NGHP User Guide.  The new User Guide (version 3.0)  incorporates numerous changes, including:

    • important new information regarding time frames for reporting, which provide that:
      • RREs have until their assigned file submission time frame in the first calendar quarter of 2011 to submit their first production data exchange file;
      • RREs may commence production data exchange reporting prior to January 1, 2011, but only if testing is complete and they are moved from testing to production status;
      • RREs are required to report Total Payment Obligation to Claimant ("TPOC") dates October 1, 2010, and later according to designated thresholds (the earlier version of the User Guide required reporting of TPOC dates January 1, 2010, and later); and
      • RREs are required to report claims on which ongoing responsibility for medicals ("ORM") exists as of January 1, 2010, and later regardless of the initial acceptance of payment responsibility.  (The earlier version of the User Guide required reporting for ORM in existence as of July 1, 2009.)
    • instructions on how foreign entities may register (and new data fields added to accommodate reporting by foreign entities);
    • certain changes in RRE registration and reporting;
    • updates to the definition of what CMS considers to be a valid ICD-9 diagnosis code for reporting;
    • clarification that accident and health policies are to be reported as "no-fault"; and
    • a host of technical modifications and clarifications. 

    CMS' release of these documents comes close on the heels of its decision to postpone the first file production date for RREs that are NGHPs, from April 1, 2010, to January 1, 2011.  This timing strongly suggests that although CMS has pushed back the timeline, the Section 111 reporting requirements and related compliance issues remain a priority for CMS.