The Medicare Secondary Payer (MSP) Act was enacted to prevent workers’ compensation, general liability, and no-fault claims payers (primary plans) from shifting their primary payer obligations onto the Medicare Trust Fund. In short, primary plans may not evade payment for a Medicare beneficiary’s claim-related, Medicare-covered medical treatment (thereby shifting the burden of medical expenses onto the federal government) if they are deemed to be a primary plan, as defined under the MSP Act.
Primary plans are generally tasked with three major tenants of compliance:
• Reimbursement to Medicare for conditional payments (pursuant to the MSP Act).
• Reporting of claims/settlements involving Medicare beneficiaries (pursuant to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007).
• Protection of Medicare’s future interest via a Medicare Set-Aside or other future medical allocation/mutual agreement to prevent the shift of the burden of future injury-related medical care onto the Medicare Trust Fund [pursuant to the Centers for Medicare & Medicaid Services’ (CMS) written policy guide and associated memoranda].
Section 111 and the MSP Act
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who receive settlements, judgments, awards, or other payment from primary plans. The passage of Section 111 enabled CMS to have transparency into claims and settlements occurring with primary plans so that CMS can either coordinate a Medicare beneficiary’s benefits or recover conditional payments from the primary plan.
The MSP Act, specifically 42 U.S.C. § 1395y(b)(8)(E)(i), grants CMS the right to impose Civil Monetary Penalties (CMPs) of up to $1,000 per day, per claim against Responsible Reporting Entities (RREs) for noncompliant MMSEA Section 111 reporting. However, before CMS issues CMPs, it must finalize a proposed rule that has been pending since Feb. 18, 2020.
The CMP Final Rule
The most recent proposed rule was published in the Federal Register on Feb. 18, 2020, and it was originally scheduled to be finalized on Feb. 18, 2023. However, on Feb. 17, the executive secretary to the Department of Health and Human Services filed notice that the proposed rulemaking timeline was extended for a full year, until Feb. 18, 2024. Once the proposed rule is finalized, CMS may start imposing CMPs against noncompliant RREs 60 days after the final rule’s effective date.
The delay of the CMP final rule is not surprising, especially given the mounting pressure on CMS to ensure that any CMPs that are levied against workers’ compensation, general liability, and no-fault RREs are fair, consistent, and not levied to cause severe economic impact to insurers. Further, the COVID-19 pandemic is a justifiable reason why CMS may not have been able to manage a timely release of the final rule; however, rest assured, the final rule is certainly coming.
It appears very likely that the final rule will be released next year, as CMS could have withdrawn the proposed rule entirely and started from scratch. The fact that CMS still intends to issue the final rule signals that CMS is serious about enforcing MMSEA Section 111 reporting compliance.
If you work with workers’ compensation or no-fault claims involving Medicare beneficiaries, you should be familiar with Ongoing Responsibility for Medical (ORM) as a requirement of MMSEA Section 111 reporting. According to Medicare’s Non-Group Health Plan (NGHP) User Guide, the reference to “ongoing” is not related to “ongoing reporting,” or repeated reporting of claims under Section 111. Rather, ORM refers to the RRE’s responsibility to pay, on an ongoing basis, for the injured party’s (Medicare beneficiary’s) medical associated with the claim.
The trigger for reporting ORM is the assumption of ORM by the RRE, which is when the RRE has made a determination to assume responsibility for ORM and when the beneficiary receives medical treatment related to the injury or illness. Medical payments do not actually have to be paid, nor does a claim need to be submitted, for ORM reporting to be required.
At times, ORM being populated incorrectly or not terminated by an NGHP RRE can cause benefit interruptions for Medicare beneficiaries. NGHPs are receiving more requests from injured workers to report the termination of ORM—even before the statute of limitations period runs—because Medicare beneficiaries are having trouble obtaining medical care.
Even if an NGHP RRE updates the reported International Classification of Diseases (ICD) diagnosis codes through its Section 111 reporting, this will not, by itself, resolve coordination of benefit issues experienced by Medicare beneficiaries. This is because any open ORM by the NGHP RRE will signal to Medicare that the NGHP RRE—not Medicare—is responsible for covering the Medicare beneficiary’s medical treatment.
One practical tool to assist in closing ORM is to obtain a signed letter from the treating physician that certifies the treatment for the alleged injury related to the workers’ comp insurance/No-Fault insurance has been completed, and that future medical items and/or services for that injury will not be required. This can be as simple as putting together a prepared questionnaire and providing it to the treating physician at the time of the anticipated release of medical care. The treating physician will either certify that the treatment has been completed on a specific date or that treatment has not been completed. A good practice in designing the physician questionnaire is to ask the treating physician to list what type of future treatment might be required and the duration of the future treatment.
Although CMS has targeted February 2024 for finalizing the rulemaking on CMPs, now is the time to make sure reporting programs and data are in order. It is important that RREs are addressing errors and populating accurate ICD diagnosis codes in their Section 111 data. If RREs fail to do so, CMPs of up to $1,000 per day/per claim are anticipated in the spring of 2024.