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MMSEA Section 111 brings headaches for RMs
If your health care organization is self-insured, the government is holding up a new hoop and waiting for you to jump through it.
Known as MMSEA Section 111, the rule requires that self-insured health care providers submit data on all Medicare-eligible participants and make the appropriate benefit determinations. The Centers for Medicare & Medicaid Services (CMS) has publicized the rule extensively, but as deadlines loom, risk managers must ensure they are ready to comply.
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) adds new mandatory reporting requirements for group health plans (GHPs), nongroup health plans (NGHPs), and for liability insurance (including self-insurance), explains Saghi Fattahian, JD, an attorney with the law firm of Morgan Lewis in Chicago.
The MMSEA imposes the reporting obligation of certain data elements upon the Responsible Reporting Entity (RRE). Generally, the RRE on a fully insured arrangement is the insurer, and on self-insured arrangements, the RRE is the plan sponsor, Fattahian explains. The purpose of the mandatory reporting obligation is to enable CMS to pay appropriately for Medicare-covered items and services furnished to Medicare beneficiaries by determining primary vs. secondary payer responsibility. In the NGHP context, the reporting obligations alert CMS to settlements or other payments made to Medicare beneficiaries that compensate the Medicare beneficiary for Medicare-covered items and services.
Rule intended to help Medicare
The rule is intended to help Medicare with its goal of being the second payer, behind other insurers, whenever possible, explains Diane Wilkerson, senior vice president, CPHRM, part of the national clinical health care consulting team with the consulting firm Marsh in Charlotte, NC.
"CMS hasn't given us final guidance on several important issues, which might create the obligation to register and comply with Section 111, one of which is the question of risk management write-offs," Wilkerson says. "It has been common practice for risk managers and claims managers to offer a write-off of patient charges after an adverse event, as a way of making amends and helping smooth out the situation. If they're dealing with a Medicare beneficiary, the question becomes whether those write-offs are reportable under Section 111."
CMS has not yet provided an answer to that question. Wilkerson says she advises health care providers to start thinking about how they would collect that information if it is deemed reportable.
"Risk managers don't hear every time somebody tells the patient they will make sure the charges are waived," Wilkerson says. "This has been one of the unsettling parts of this rule, because we just don't have an answer yet."
All GHPs began official reporting on Oct. 1, 2009. All NGHPs are expected to begin official reporting by July 1, 2010. CMS recently announced an important deadline change, extending the date for reporting MMSEA Section 111 claim input files to CMS until Jan. 1, 2011. CMS advised all NGHP RREs that the date for first production NGHP Input Files has been changed from April 1, 2010 to Jan. 1, 2011.
CMS also has posted the latest version of the "Section 111 NGHP User Guide" and a number of alerts relating to particular NGHP policy issues, as well as an alert for NGHP RREs describing the steps those RREs can take to assure their ongoing compliance with the Section 111 reporting requirements. (Editor's note: For those alerts and other MMSEA Section 111 information, go to http://www.cms.hhs.gov/MandatoryInsRep/04_Whats_New.asp#TopOfPage)
To comply with Section 111, RREs must first register with CMS.
Health providers affected
The rule will affect many health care providers, says Vickie Patterson, an associate director in the Atlanta office of Protiviti, a risk consulting firm. She explains that the MMSEA Section 111 includes in the definition of a "Group Health Plan organization that must report under Section 111" an entity serving as an insurer or third-party administrator (TPA) for a group health plan that is self-insured and self-administered, a plan administrator, or fiduciary.
"Many health care providers are self-insured for employee medical benefits, as well as workers' compensation. Most utilize TPAs to administrate the health and workers' comp plans," she says. "In these cases, the TPA has the responsibility for the reporting requirement. For providers with self-administered plans, they bear the reporting responsibility."
These providers may contract with an agent to submit reports on their behalf; however, the accountability for submitting the reports in the manner and form stipulated by the government and the accuracy of the information will rest with the provider.
CMS will provide information on the format and method of identifying agents for reporting purposes, Patterson explains. If an agent is used, the provider also will need to develop communication protocols. The Medicare Secondary Payer Recovery Contractor (MSPRC) will issue demand letters for repayment if Medicare has erroneously paid a claim.
"Failure to repay the amount promptly can lead to the MSPRC reporting the debt to the Department of the Treasury for offset and ultimately the Department of Justice for legal action if payment is severely delayed," Patterson says.
To the extent they have not yet done so, self-insured providers will need to implement internal policies and adequate procedures to identify, collect, and submit data on all Medicare-eligible participants and to make the appropriate benefit determinations, Fattahian says.
The penalty for failure to report is $1,000 per day per Medicare beneficiary claimant for any failure to report settlements, awards, or other payments to Medicare beneficiaries as required.
In light of the new mandatory reporting requirements for NGHPs, companies must establish and implement protocols to collect Medicare information from claimants and CMS to determine whether a claimant is a Medicare beneficiary and to report settlements or amounts paid under any of the NGHPs to Medicare beneficiaries in a timely manner. In a litigation context, consideration should be given to the language contained in settlements and release agreements, Fattahian says.
The collection of some data elements, such as a participant's health insurance claim (HIC) number or Social Security numbers, which TPAs may not currently be using to identify a participant, may prove to be challenging, Fattahian says.
"The data collection will likely require a cooperative process between the plan sponsor and the service provider," she says. "This process will add an additional administrative expense, which the insurer or TPA will want to pass on to the plan sponsor, along with a requirement that the plan sponsor indemnify the insurer or TPA for any failures to identify and report all of the Medicare-eligible participants."
Plan sponsors should request adequate assurances in writing that their insurer or TPA is assuming responsibility for the data collection and reporting process, Fattahian says. Plan sponsors currently in negotiations with a service provider should negotiate the cost and responsibility for the data collection and reporting process and ensure that the responsibility for the process is clearly stated in the service agreement, she advises.
Wilkerson cautions risk managers that they must make sure defense counsel contracted to settle claims with Medicare beneficiaries are up to speed with Section 111.
"What's required now in settling a claim is no more hiding behind the veil of claiming you didn't know there were Medicare payments involved," Wilkerson says. "Medicare may have been paying bills for a couple of years without knowing there was a claim or a lawsuit filed. All this forced reporting will alert Medicare to the fact that they should be secondary."
For more information on MMSEA Section 111, contact:
Saghi Fattahian, JD, Associate, Morgan Lewis, Chicago. Telephone: (312) 324-1744. E-mail: firstname.lastname@example.org.
Vickie Patterson, Associate Director, Protiviti, Atlanta. Telephone: (404) 926-4300. E-mail: email@example.com.
Diane Wilkerson, SVP, CPHRM, Marsh, National Clinical Healthcare Consulting Team, Charlotte, NC. Telephone: (704) 374-8412. E-mail: firstname.lastname@example.org.