Mandatory Insurance Reporting Under The MMSEA

The actual implementation of the statute has been a long time coming. The Centers for Medicare and Medicaid Services (CMS) has spent considerable energy, time and money to develop the complex procedures and systems required to carry out the mandates of the MMSEA. These procedures and systems are still evolving, but the basics are in place and a tentative schedule has been set for applicable plans to comply with their duties under the MMSEA.

(a) In General- Section 1862(b) of the Social Security Act (42 U.S.C. 1395y(b)) is amended by adding at the end the following new paragraphs: . . .

`(8) REQUIRED SUBMISSION OF INFORMATION BY OR ON BEHALF OF LIABILITY INSURANCE (INCLUDING SELF-INSURANCE), NO FAULT INSURANCE, AND WORKERS' COMPENSATION LAWS AND PLANS-

`(A) REQUIREMENT- On and after the first day of the first calendar quarter beginning after the date that is 18 months after the date of the enactment of this paragraph, an applicable plan shall--

`(i) determine whether a claimant (including an individual whose claim is unresolved) is entitled to benefits under the program under this title on any basis; and

`(ii) if the claimant is determined to be so entitled, submit the information described in subparagraph (B) with respect to the claimant to the Secretary in a form and manner (including frequency) specified by the Secretary.

`(i) the identity of the claimant for which the determination under subparagraph (A) was made; and

`(ii) such other information as the Secretary shall specify in order to enable the Secretary to make an appropriate determination concerning coordination of benefits, including any applicable recovery claim.

`(C) TIMING- Information shall be submitted under subparagraph (A)(ii) within a time specified by the Secretary after the claim is resolved through a settlement, judgment, award, or other payment (regardless of whether or not there is a determination or admission of liability).

`(ii) an individual filing a claim against an individual or entity insured or covered by the applicable plan.

`(i) IN GENERAL- An applicable plan that fails to comply with the requirements under subparagraph (A) with respect to any claimant shall be subject to a civil money penalty of $1,000 for each day of noncompliance with respect to each claimant. The provisions of subsections (e) and (k) of section 1128A shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a). A civil money penalty under this clause shall be in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer claim under this title with respect to an individual.

`(ii) DEPOSIT OF AMOUNTS COLLECTED- Any amounts collected pursuant to clause (i) shall be deposited in the Federal Hospital Insurance Trust Fund.

`(F) APPLICABLE PLAN- In this paragraph, the term `applicable plan' means the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan, or arrangement:

`(G) SHARING OF INFORMATION- The Secretary may share information collected under this paragraph as necessary for purposes of the proper coordination of benefits.

`(H) IMPLEMENTATION- Notwithstanding any other provision of law, the Secretary may implement this paragraph by program instruction or otherwise.'.

The effective date of the statute is July 1, 2009, although implementation has been delayed to allow CMS to institute procedures and systems for reporting; and to allow applicable plans, called “Responsible Reporting Entities” (RREs), to develop the means to comply with CMSs requirements. The initial requirement under the statute is for RREs to make a determination, with regard to each individual who has instituted a claim against an RRE or against an entity insured by an RRE, as to whether each individual claimant is eligible for Medicare benefits. This requirement applies regardless of whether the claim is still open or whether it has been resolved.

For each claimant determined to be eligible for Medicare, the statute imposes a duty on RREs to report information defined by CMS. At a minimum, the statute requires information indentifying each claimant, along with such other information as CMS deems necessary for purposes of coordination of benefits and for enforcing any Medicare right of recovery that may exist in a particular claim. The required information must be submitted for each claim involving a Medicare beneficiary once the claim is resolved through a settlement, judgment, award or other payment. The time limits for reporting are up to CMS to establish.

The penalties for non-compliance are stiff. For every day that an RRE fails to report required information past the time due, the RRE is subject to a civil penalty of $1,000 for each day of non-compliance for each claimant. Thus, for example, if an RRE had 1000 claims involving Medicare-eligible claimants and all of these claims reached resolution, failure by the RRE to make timely reporting of required information for all of these claims could actually expose the RRE to a total civil penalty of $1,000,000 per day! This fine would be in addition to any other penalties that may apply and to any Medicare claim that may be involved to recover conditional payments. It is easy to see why the MMSEA reporting requirements have caused such a flurry of activity and controversy in anticipation of the effective date of the Act.

The MMSEA leaves all of the details for how and when RREs are to comply with their mandatory insurance reporting (MIR) requirements up to CMS. CMS has been developing procedures, policies and systems since early in 2008. CMS maintains a web site to make current MIR information available to RREs and other interested members of the public. On CMS’s MIR web site, one can review all of CMS’ publications, including the NGHP User’s Guide and updates; CMS notices, alerts and instructions; transcripts of NGHP Town Hall meetings; and other information vital to RREs in their efforts to comply with MMSEA Section 111.

Much of the information in the remainder of this article represents a summary of the information currently available through CMS’ MIR web site. To access MIR information online, go to:

RREs and Medicare Set-Aside practitioners should visit the MIR web site often to stay updated on the latest developments in CMS’ efforts to implement the reporting requirements of MMSEA Section 111.

The MMSEA defines an “applicable plan” as any workers’ compensation (WC) law or plan, any liability plan or any no-fault plan. The statute also covers self-insured plans. CMS considers these applicable plans to be RREs.

Generally speaking, if an employer or defendant has WC or liability insurance, the insurance carrier is considered to be the RRE with respect to a claim against that entity. The same is true of any no-fault insurance policy carried by an injured claimant. If an employer or defendant is self-insured for WC or liability, the employer or defendant is generally considered to be the RRE. However, if an employer or defendant is only self-insured with regard to any deductible or co-payment amounts applicable to its WC or liability policy and the employer or defendant pays its self-insurance amount directly to the WC or liability carrier, the carrier is the RRE. (The concept of self-insurance really does not apply to no-fault plans in the Medicare Secondary Payer context.)

CMS recognizes that the job of gathering and reporting the information required by CMS under the MMSEA is quite technical and complex. As a result, many RREs may elect to look to subcontractors, such as Third Party Administrators (TPAs), to do their reporting for them. CMS does allow the use of such an agent to report on behalf of the RRE. However, the RRE may not delegate its ultimate responsibility or exposure to potential liability. That is, even where an agent is performing the actual task of reporting, the responsibility for any failure to report correctly or in a timely manner falls on the RRE and not on the agent.

This last point is quite important due to the fact that there are quite a few vendors who are marketing their services to act as reporting agents for RREs. At the same time, none of these vendors has an actual track record at this point. This means that it is extremely important for any RRE considering the option of engaging an agent/vendor to carry out the RREs reporting responsibilities to conduct a thorough due diligence investigation on any potential agent before engaging that agent’s services. This due diligence should be designed to address such issues as the vendor’s systems to ensure data integrity; systems for ensuring accurate determination of Medicare eligibility for all claimants; safeguards against computer or other mechanical failures; computer network security measures; personnel expertise, experience and training protocols; and other issues that could potentially result in non-compliance.

Further, there are situations where a third party vendor, such as a TPA, may condition its work or service as a reporting agent upon a requirement that the RRE agree to exclusive use of one of the TPAs partner vendors for other Medicare Secondary Payer compliance, such as preparation and submission of Medicare Set-Aside Arrangements. In such circumstances, an RRE should require complete disclosure of the relationship between such vendor partners. If an RRE is engaging an agent to provide MMSEA compliance services, the RRE should want to ensure that the agent is actually performing these services itself and not using an agent of its own without full disclosure. Since the RRE bears the ultimate responsibility for MMSEA compliance (and non-compliance), the RRE will want to avoid losing control over who will be carrying out any of the RRE’s required tasks.

An RRE can simply request that a claimant provide his or her Medicare number, called a Health Insurance Claim Number or HICN. This is the number on the claimant’s Medicare card. If the claimant has an HICN, the claimant is definitely a Medicare beneficiary.

The most reliable method of determining a claimant’s Medicare status where the claimant cannot provide a HICN or is unsure of whether he or she has an HICN is to obtain a benefit statement for the claimant from the Social Security Administration (SSA). Since the SSA is the agency in charge of actually processing and tracking enrollment in Medicare Part A and Part B, that agency will have the most accurate records on a given claimant’s Medicare status; and the SSA can conduct this search with only the claimant’s first and last name, date of birth and Social Security Number. A determination by the SSA that a particular claimant either is or is not currently a Medicare beneficiary is conclusive and will be reliable in determining whether there is a duty to report information for that claimant.

To obtain a claimant’s benefit information from the SSA, the RRE will need to submit a benefit status request in writing, along with a Social Security Consent form (SSA-3288) signed by the claimant. Unfortunately, claimants are not always willing to cooperate with RREs. The RRE may find that a particular claimant simply refuses to sign the consent form. What then?

CMS recognizes that this situation may arise frequently. As a result, CMS has made a Query System available for the purpose of assisting RREs to identify claimants who are current Medicare beneficiaries. RREs are permitted to submit Query Files seeking Medicare eligibility information on one or more claimants as often as monthly. These Query Files must contain the following information for each claimant for whom the RRE is seeking Medicare status:

If the Query is an exact match for the claimant’s Social Security Number and also an exact match for any three of the other four criteria, CMS will confirm that the claimant is a Medicare beneficiary. Otherwise, CMS will only acknowledge that it was not able to confirm that the claimant is a Medicare beneficiary. CMS has made it quite clear that their inability to confirm Medicare status cannot safely be relied on by the RRE as a determination that the claimant is, in fact, not a Medicare beneficiary. Thus, an RRE takes the chance that any inability of CMS to identify a claimant as a Medicare beneficiary may be a false negative. As a result, it is not recommended that RREs use the Query File system as a preferred method to determine a claimant’s Medicare status.

Finally, whether an RRE seeks Medicare status from the SSA or from CMS through a Query File, an essential element of data needed to make such a determination is the claimant’s Social Security Number. In this day and age, with the crime of identity theft becoming more and more common, many people are understandably reluctant to provide their Social Security Numbers. CMS takes the position that MMSEA reporting for purposes of allowing Medicare to protect its interests as Secondary Payer is a legitimate reason to request someone’s Social Security Number. However, it is still possible that any given claimant will simply refuse to provide this information. CMS has not provided any guidance on what an RRE is expected to do in such a situation. It may be necessary for RREs to require disclosure of a claimant’s Social Security Number as a condition for settlement or other payment; or to seek a court order for disclosure in connection with a judgment or award.

Under the MMSEA, the first trigger is a determination that the claimant is a Medicare beneficiary. Once a claimant is determined to be on Medicare, the MMSEA requires that required information be submitted after resolution of the claim by settlement, judgment, award or other payment. The MMSEA leaves the details up to CMS.

CMS’ current policies require that RREs must submit information on a particular claim in a Claim Input File whenever the claimant is a Medicare beneficiary and:

1. There is an Ongoing Responsibility for Medicals (ORM) under a WC or no-fault plan that exists on or after July 1, 2009; and

2. There is a Total Payment Obligation to the Claimant (TPOC), i.e., a settlement, judgment or award, arising on or after January 1, 2010 (regardless of when the

In many cases where there is an ORM, the claim will later be finally resolved by settlement, judgment or award resulting in TPOC. In these cases, ORM payments and TPOC payments will need to be reported, resulting in a need to update this information regarding any particular claim in several Query File submissions.

According to CMS, all MIR information is to be submitted digitally over the Internet through the Coordination of Benefits Secure Website (COBSW). CMS will supply the necessary software and training to allow RREs to submit their required information through the COBSW.

Both Query Files (to determine a claimant’s Medicare status) and Claim Input Files (containing required reporting information) will be submitted through the COBSW. CMS has developed strict file and data formatting requirements for file submissions. If there are errors, the file will likely be rejected. These technical requirements are far beyond the scope of this article, but are available in CMS’s NGHP User’s Guide and updates, available through the MIR web site. RREs submitting their own MIR information, as well as agents for RREs who choose to delegate this function, will need to become intimately familiar with these requirements to ensure that their internal protocols are properly designed to both gather and transmit MIR information accurately and on time.

The effective date of MMSEA Section 111, according to the statute, is July 1, 2009. However, the procedures and systems needed to comply with the statute’s reporting requirements simply have proven too complex to be completely developed and operational by that date. Further, due to the volume of information expected, CMS determined that Claim Input Files would be submitted quarterly, with individual RREs being assigned specific “submission windows” during the calendar quarter. RREs will be assigned to one of twelve groups. Each group is assigned a seven-day period during a given month in the quarter in which to submit its Claim Input File.

Initially, CMS announced that actual reporting would begin during the first quarter of 2010. However, due to delays in developing the reporting systems and procedures to the point of readiness, CMS has announced that it will delay actual required reporting until the second calendar quarter of 2010, beginning on April 1. RREs who have registered, completed testing and are ready to submit Claim Input Files by their submission window in the first calendar quarter will be permitted to do so.

However, RREs are required to register as RREs first. Registration is available from May 1, 2009 through September 30, 2009 for existing RREs. Once registered, RREs will be able to submit Query Files beginning July 1, 2009. However, registered RREs must complete training and then go through a testing period between January 1, 2010 and March 30, 2010. Once an RRE has demonstrated its ability to submit acceptable test files, it will be permitted to begin submitting its quarterly Claim Input Files. All RREs must be in the position to submit their Claim Input Files by their submission windows in the second calendar quarter of 2010 or face the $1,000 per day per claimant penalty under the MMSEA.

RREs will be permitted to submit Query Files as frequently as monthly. However, Claim Input Files will be accepted only on a quarterly basis.

There are no reporting thresholds for no-fault plans. All no-fault ORM and TPOC payments will trigger the requirement to submit information in a Claim Input File.

CMS has set thresholds for WC and liability reporting, but these thresholds are only temporary. Eventually, RREs will be required to report for all Medicare beneficiaries whose claims result in ORM or TPOC payments, regardless of the amount.

Thresholds for ORM payments apply only to WC. If ORM payments are made in connection with a liability claim (although this would be exceedingly rare, if ever) no thresholds apply. The ORM thresholds for WC allow exclusion from reporting through December 31, 2010 if the following criteria are met:

The thresholds for TPOC payments are the same for WC and liability. These dollar thresholds will allow exclusion from reporting TPOC through December 31, 2010 if the total TPOC is $5,000 or less; from January 1, 2011 through December 31, 2011 if total TPOC is $2,000 or less; and from January 1, 2012 through December 31, 2012 if total TPOC is $600 or less. There are no applicable thresholds after December 31, 2012.

Section 111 of the MMSEA requires information to include the identity of the claimant and any other information required by CMS to “make an appropriate determination concerning coordination of benefits, including any applicable recovery claim.” Much of CMS’ efforts since early 2008 have been directed toward defining exactly what information CMS will require to meet the stated goals of Section 111.

The specific information requirements are too lengthy to provide a complete list here. Details regarding these requirements can be found in CMS’ NGHP User’s Guide and updates. However, the following general categories of information will be required as part of any Claim Input File:

1. The claimant’s name, address, date of birth, gender and Social Security Number or HICN;

2. The RREs name, address, type of policy (WC, liability or no-fault), Tax Identification Number, policy number, claim number, policy limits (if applicable) and

5. The date of the incident or injury, nature of the injury, cause of the injury, body parts affected, ICD-9 diagnostic codes and whether the claim involves product

6. The settlement date, settlement amount, whether the claim was contested or uncontested, whether there was ongoing liability and whether the payment of the

Medicare Set-Aside practitioners will note that the above categories of information are strikingly similar to the information currently required with the submission of a Medicare Set-Aside Arrangement in connection with a WC settlement. This is a fairly clear indication that CMS intends to gather information that would allow it to ensure that Medicare’s interests as Secondary Payer will be reasonably considered in all WC and liability settlements.

The reporting requirements of MMSEA Section 111 are in addition to any requirements already existing under the Medicare Secondary Payer Statute and regulations. Any existing requirements for reporting remain in effect.

In Janauary, 1990, CMS (then HCFA) enacted 42 C.F.R. §411.25. This regulation stated:

(a) If a third party payer learns that HCFA has made a Medicare primary payment for services for which the third party payer has made or should have made primary payment, it must give notice to that effect to the Medicare intermediary or carrier that paid the claim.

(b) The notice must describe the specific situation and the circumstances (including the particular type of insurance coverage as specified in § 411.20(a)) and, if appropriate, the time period during which the insurer is primary to Medicare.

(c) If a plan is self-insured and self-administered, the employer must give the notice to HCFA. Otherwise, the insurer, underwriter, or third party administrator must give the notice.

§ 411.25 Primary payer’s notice of primary payment responsibility.
(a) If it is demonstrated to a primary payer that CMS has made a Medicare primary payment for services for which the primary payer has made or should have made primary payment, it must provide notice about primary payment responsibility and information about the underlying MSP situation to the entity or entities designated by CMS to receive and process that information.
* * * * *
(c) The primary payer must provide additional information to the designated entity or entities as the designated entity or entities may require this information to update CMS’ system of records.

Both versions of the regulation provide that primary payers (including WC plans, no-fault plans and liability plans) have an obligation to report to Medicare if the plan has knowledge of a payment by Medicare that was made or should have been made by the primary payer. However, actual knowledge is not necessarily required. Constructive knowledge is sufficient. In U.S. v. Baxter International, 345 F.3d 866 (11^th Cir. 2003), the Court held that a primary payer has a duty to inquire whether a claimant is eligible for Medicare for purposes of determining whether there was a likelihood that Medicare may have made payments that were the responsibility of the primary payer. Failure to inquire, said the Court, would result in the primary payer being deemed to have knowledge, triggering the duty to report under the regulation.

As a result, there has been at least some requirement on the part of primary payers to report potential Medicare Secondary Payer situations to Medicare for over 19 years. This obligation continues in effect and will continue to do so, even when the reporting requirements of MMSEA Section 111 go into effect.

The Medicare Secondary Payer statute and regulations provide other means for CMS to ensure compliance. These means do not necessarily involve duties on the part of primary payers. Rather, some place duties on Medicare beneficiaries and providers, while others provide means by which Medicare can take steps on its own to gain information needed to protect its interests as secondary payer.

Medicare beneficiaries are required to disclose the existence of any claim against a primary payer on a questionnaire issued by Medicare when the beneficiary first enrolls in the Medicare program. 42 U.S.C. §1395y(b)(5)(D). In addition, this same questionnaire is routinely generated and sent to the beneficiary whenever a request for payment of a Medicare-covered item or service is submitted to a Part A or Part B Contractor involving ICD-9 diagnostic codes that CMS’ computer system identifies as being potentially related to an injury claim. The beneficiary is then obligated to provide all information regarding any claim against a primary payer or risk losing his or her Medicare benefits.

Medicare providers are also obligated to institute means whereby they can identify the existence of a claim against a primary payer; and are required to bill primary payers first, unless the primary payer is a liability insurer. 42 C.F.R. §489.20(f)( & (g); 42 U.S.C. §1395y(b)(6)(A).

Finally, the Secondary Payer statute provides Medicare with the ability to gather primary payer information through data sharing with the Internal Revenue Service and the Social Security Administration. 42 U.S.C. §1395y(b)(5)(A). CMS also has entered into data sharing arrangements with several primary payers on a voluntary basis.

The mandatory reporting requirements of MMSEA Section 111 represent a powerful new tool for CMS to enforce and ensure Medicare Secondary Payer compliance by WC, liability and no-fault carriers and self-insurers. This tool, in conjunction with the tools already available to CMS, surely means that CMS intends to increase its efforts to ensure that its interests are reasonably considered in WC and liability settlements involving Medicare beneficiaries. Not only will this improve CMS’ ability to recover conditional payments, but it will also improve CMS’ ability to identify situations in which WC or liability claims have been resolved without properly considering Medicare’s interests as secondary payer regarding future, injury-related medical and prescription drug expenses.

John J. Campbell, the founder and principal attorney of the Law Offices of John J. Campbell, P.C., has practiced law since 1986 and has practiced in the area of Medicare Set-Asides since 1996. Mr. Campbell is certified as an Elder Law Attorney by the National Elder Law Foundation;* and is a Medicare Set-Aside Consultant Certified (national certification through the Commission on Health Care Certification).* Mr. Campbell is licensed to practice law in Colorado and is also licensed and on inactive status in Missouri. He is a member of the Colorado Bar Association (Trust & Estate Section and Elder Law Section), the Arapahoe County Bar Association, the Missouri Bar Association, the National Academy of Elder Law Attorneys, Academy of Special Needs Planners and the National Alliance of Medicare Set-Aside Professionals. His areas of concentration include elder law; estate, disability and long term care planning; probate; guardianship and conservatorship; Medicare, Medicaid, Medicare Set-Aside Arrangements, and the preservation of public benefits in catastrophic third party liability and worker’s compensation settlements. Mr. Campbell has published numerous articles and has presented numerous seminars on issues relating to Medicare Set-Aside Arrangements across the country.

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