January 2021 - Tower MSA

CMS Releases Technical Updates to Section 111 User Guide

January 26, 2021

CMS User Guides for Section 111 Reporting. open book with colored page markers

The Centers for Medicare and Medicaid Services (CMS) has begun the new year with some updates to its MMSEA Section 111 NGHP User Guide. This guide provides everything and anything you ever wanted to know about mandatory insurer reporting by non-group health plans. Version 6.2 provides the following updates:

$750 Reporting Threshold

In follow-up to its November 2020 announcement that it will be maintaining the $750 TPOC threshold for reporting and Medicare conditional payment recovery, CMS states:

As of January 1, 2021, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals (Sections 6.4.2, 6.4.3, and 6.4.4).

Key takeaway: Maintaining the $750 threshold means there are no changes to the reporting processes, determinations of claims that should be reported, or when conditional payments should be investigated or resolved.

Reporting Future ORM Termination Date

Per CMS:

To address situations where Responsible Report Entities (RREs) can identify future ORM termination dates based on terms of the insurance contract, RREs can now enter a future Ongoing Responsibility for Medicals (ORM) Termination Date (Field 79) up to 75 years from the current date (Section 6.7.1)

Key takeaway: A future ORM termination date can only be submitted if it is certain, e.g., the date is specified in an insurance contract or a statutory limitation provides for its exact determination. The prior policy only allowed the reporting of an ORM termination date that was six months into the future. The expansion to 75 years should allow for most date certain ORM terminations to be reported.

Data Exchange Update

Per CMS:

As part of CMS’ commitment to the modernization of the Coordination of Benefits & Recovery (COB&R) operating environment, changes are being implemented to move certain electronic file transfer data exchanges to the CMS Enterprise File Transfer (EFT) protocol. As part of this change the exchange of data with the COB&R program via Connect:Direct to GHINY SNODE will be discontinued. The final cutover is targeted to occur in April 2021. File naming conventions and other references have been updated in this guide. Contact your EDI Representative for details (Sections 10.2 and 10.3).

Key takeaway: Right now, CMS offers four methods of data transmission that Section 111 RREs or their reporting agents can use to submit and receive electronic files. CMS is discontinuing the Connect:Direct method, and since Tower does not communicate with CMS via this method there will be no impact to our reporting processes.

Policy Number Now a Key Field

Per CMS:

To support previous system changes, Policy Number (Field 54) has been added as a key field. If this field changes, RREs must submit a delete Claim Input File record that matches the previously accepted add record, followed by a new add record with the changed information (i.e., delete/add process) (Sections 6.1.2, 6.6.1, 6.6.2, and 6.6.4).

Key takeaway: Previously, if a claim input file was updated with a different policy number for the same claim it would create two records with the BCRC. This could duplicate Medicare conditional payment recovery efforts. CMS’s solution is to have the RRE delete the prior record with the old policy number and add a new record with the new policy number.

Retraction of Soft Code Error

Per CMS:

In Version 6.1, we announced that several input errors will become “soft” errors starting April 5, 2021. However, CP03 will not become a soft edit. The Office Code/Site ID (Field 53), which triggers CP03, is used to identify correspondence addresses, and if incorrect, could result in mail being sent to the wrong place. Therefore this error will continue to reject the record (Appendix F).

Key Takeaway: An error in Office Code/Site ID (Field 53) will not be considered a soft edit and will result in file rejection. An earlier Tower article, November CMS Mandatory Reporting and Conditional Payment Updates, explained these so-called “soft” code errors.

If you have any questions on these updates to the Section 111 User Guide, please reach out to Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com or 888.331.4941.

Three Medicare Secondary Payer (MSP) Predictions for 2021

January 14, 2021

rainbow over a highway with the year 2021 painted, illustrating predictions for Medicare Secondary Payer in 2021

We take a look at what’s in the crystal ball for Medicare Secondary Payer (MSP) short-term issues in the year ahead.

This year marks the 20^th anniversary of the famous —or infamous, depending on your perspective— “Patel Memo” that formally launched CMS’s Workers’ Compensation Medicare Set-Aside review process. It was probably safe to assume that a government program like this would still be around two decades later. However, the expansion of CMS’s authority to require mandatory reporting along with stepped up efforts to recover conditional payments by both Medicare and Medicare Advantage plans was less predictable.

I won’t hazard a guess on what Medicare Secondary Payer compliance will be like 20 years from now but will predict the outcomes of some short-term issues.

Liability MSAs

In June 2012 CMS issued an Advanced Notice of Proposed Rulemaking (ANPRM) with ideas as to how Medicare’s interests could be considered in the settlement of future medicals in a liability case. Ultimately, the ANPRM was withdrawn in October 2014.

Nothing further was heard from CMS management until December 2018 when it indicated proposed rules would be issued in September 2019. Subsequent notices postponed the date to March 2021.

Prediction: Since CMS will have new leadership and its attention has turned to vaccine distribution, I suspect we will not see proposed rules on LMSAs this year. Even if CMS proposes regulations, they would not be implemented until after a comment period followed by revisions, which would likely stretch into 2022.

Section 111 Penalties

On February 18, 2020, CMS issued its proposed regulations specifying how and when it would impose civil money penalties if Non-Group Health Plans fail to meet Section 111 Mandatory Insurer Reporting responsibilities. A comment period ended on April 20, 2020 (Please see CMP Comments Submitted for Tower’s comments on the proposal).

Prediction: Since CMS completed the process of releasing the proposed rule and receiving comment and the issuance of this regulation is statutorily required by the SMART Act of 2012 prior to issuing any penalties, I expect the final rule will be issued in 2021. Once issued, it will likely become effective within 60 days.

PAID Act

On December 11, 2020, President Trump signed into law HR 8900, Further Continuing Appropriations Act, 2021, which included the provisions of the Provide Accurate Information Directly Act or PAID Act.

The PAID Act requires CMS to provide applicable plans (liability insurance, no-fault insurance and workers’ compensation laws or plans) access to Medicare beneficiary enrollment status in Medicare Advantage and Part D Prescription Drug plans through the Section 111 Mandatory Insurer Reporting process. (Please review PAID Act Becomes Law for a full explanation of the law and its implications.)

Prediction: Per the law, CMS must provide access to Medicare Advantage and Part D plan information by December 11, 2021 (one year from the date of enactment). As CMS must implement technical changes to the Section 111 reporting platform to provide such access, it may not be ready by that date.

Beyond these three predictions, some issues to watch in the coming year:

Continued trend toward non-submit MSAs
More professional administration of MSAs
Cases affecting Medicare Advantage plan recovery rights
Per proposal from President-elect Biden, lowering of Medicare eligibility age to 60
“New” MSA reform legislation

A happy and safe new year to you and your families.

WorkCompCentral Explains the PAID Act

January 4, 2021

Red Medicare button on a keyboard to illustrate Medicare conditional payment.

The recently enacted PAID Act fixes long-term annoyances for MSA companies in securing accurate information about beneficiaries’ Medicare Advantage prescriptions drugs plans.

Right now, the Centers for Medicare and Medicaid Services (CMS) can tell payers which workers’ compensation claimants are Medicare beneficiaries. However, the agency has historically said that privacy concerns prevent it from sharing which Medicare Advantage Plans or Prescription Drug Plans these beneficiaries have joined. This means Medicare Set Aside (MSA) companies and insurers have to ask claimants or their attorneys and the information was sketchy at best, leading to conditional payment demands – and some lawsuits – post settlement.

In mid-December, the Provide Accurate Information Directly (PAID) Act was passed and signed into law, enabling Medicare to respond to queries by providing the name and address of beneficiary’s Medicare Advantage or prescription drug plans. The law should help end years of aggravation over Medicare Advantage Plan identification, according to Tower MSA Partners’ Dan Anders, who was interviewed for WorkCompCentral’s article on the law: Medicare Set-Aside Firms Applaud Passage of PAID Act Provisions.

PAID Act Becomes Law