Medicare Secondary Payer Rules: Impact of Section 11

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Medicare Secondary Payer Rules Impact of Section
111 reporting requirements

• Rebecca Price, claims manager

Presented by Premier Insurance Management
Services, Inc.
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MMSEA Section 111 Timeline-2009

• May 1 to June 30 Registration is now open for
  all potential RREs with CMS secure Web site
  (COBSW)
• July 1 CMS reporting is triggered for
  settlements, judgments, and awards made after
  this date
• July 1 to December 31, 2009 Testing
• data transmissions from RREs/Agents
• January 1, 2010 Reporting to CMS begins
• Reporting will be quarterly, during a 7 day
  reporting schedule to be assigned to RRE by CMS

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Background Section 111 Mandatory Medicare
Secondary Payer Reporting

• Section 111 of the MMSEA requires certain
  "responsible reporting entities" (RREs) to
  register online between May 1st and June 30, 2009
  and to report quarterly to CMS, in a new
  electronic format, any settlement, judgment,
  award or other payment made on or after July 1,
  2009 which compensates an injured Medicare
  beneficiary (MB) for personal injury. Penalties
  for not reporting are 1,000 per day per claim.

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Background Sec. 111 Mandatory Medicare Secondary
Payer Reporting

• The MMSEA broadly defines an RRE, and can be
  paraphrased from the current version of the CMS
  Users Guide as
• any entity which issues a check over 5,000 to
  compromise a liability claim/lawsuit brought by
  an injured MB. 
• This includes self-insured entities and those
  that pay the plaintiff directly within a
  deductible or self-insured retention program. 
• Because of the burdensome IT requirements, and
  large potential fines, this definition could
  create many problems for hospitals and other
  business entities that may not even be aware of
  the new reporting requirement.

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CMS Section 111 broadly defines an RRE

• These payments to a Medicare Beneficiary would
  require the individual or entity to register as
  an RRE to report the payment and then report
  quarterly forever
• A small store owner with a 25,000 GL deductible
  pays 15,000 to a customer who incurred an injury
  in a fall at his store even though owner is later
  reimbursed by his insurance company
• A rural clinic with a 100,000 self-insured
  deductible pays 8300 to a patient for medical
  care from another provider due to alleged
  malpractice
• Payment amount requiring a report decreases-
  reporting duty increases
• 7/1/09 12/31/10 5,000
• 1/1/11 12/31/11 2,000
• 1/1/12 12/31/12 600
• Once an RRE is registered, CMS requires
  submission of an empty file every quarter even
  if there are no payments to report!
• Once an RRE, always an RRE

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RREs must understand the reporting requirements

• Download the CMS Liability Insurance User Guide
  and the subsequent alerts amending it on the CMS
  Web site http//www.cms.hhs.gov/MandatoryInsRep/0
  3_Liability_Self_No_Fault_Insurance_and_Workers_Co
  mpensation.aspTopOfPage
• Register on the CMS Web site to receive alerts
  when CMS makes changes to the User Guide or adds
  notices or resources to the site
  https//subscriptions.cms.hhs.gov/service/subscrib
  e.html?custom_id566codeUSCMS_537
• Access the recorded PIMS Web conference "New CMS
  claim reporting requirements will hit insurers
  and self-insurers in 2009 (including hospitals
  and their captives) What you need to do now!
• Provides critical information hospitals need to
  consider as they work to comply with the CMS
  regulations for reporting liability payments.
• http//www.premierinc.com/risk/education-newslett
  ers/past.jsp

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CMS comment portal

• Submit comments to CMS urging that the rule be
  amended
• Apply only to insurers and entities that are
  fully self-insured and are experienced with
  mandatory reporting compliance
• Remove the IT burden by creating an
  internet-based input program to give CMS claims
  information directly or some other type of manual
  reporting system for those expecting to make few
  reports.
• Eliminate the quarterly empty Claim Input File
  reporting requirement so that entities
  contracting with external reporting agents will
  not incur high fees simply to report they have no
  claims.
• CMS will accept comments via its Web site ONLY
• https//www.cms.hhs.gov/MandatoryInsRep/Downloads/
  OpportunityToCommentRev041009.pdf

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Possible Data Solutions
Priscilla Sanchez, data insurance and reporting
managerPremier Insurance Management Services
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CMS Section 111 Data Vendors

• Types of vendors in the market
• Software/Data Companies deal only with
  transmitting data to CMS and there is no
  involvement in the claim settlement process.
• Reporting and MSP specialists capable of both
  transmitting data to CMS and actively
  participating in the claim settlement process.
• Strategic Alliances also exist between
  software/data companies and reporting agents/MSP
  specialists.

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Vendors include

• Reporting Software/Data Companies
• iSPACE - http//www.ispace.com/
• SMART Data Solutions - http//www.sdata.us/
• ISO - http//www.iso.com/
• CS STARS - http//www.csstars.com/
• Reporting and Mandatory Secondary Payer
• Specialists
• Piatt Consulting - http//piattconsulting.com/
• Corvel - http//www.corvel.com/
• Gould Lamb - http//www.gouldandlamb.com/
• Crowe Paradis - http//www.cpscmsa.com/
• MedAllocators, Inc - https//www.abilityservicesne
  twork.com/

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Research the right solution for you

• Selecting a vendor is crucial in this process, so
  it is important to be prepared to
• perform significant due diligence. First, know
  how much service you want to
• perform and where you want them to attach in the
  process. Then consider the
• following
• Is the company reputable ?
• Ask for customer referrals
• This product may be new, but if they have been in
  business for awhile they should have a good
  client base.
• What type of training do they provide?
• Customer service or help desk availability
• How much time will your team need to commit?
• How much of the process do you want to manage?
• How are updates or modification to CMS rules
  handled?
• Does the vendor have policies and procedures in
  place to address changes?
• Can your existing work comp. vendor perform
  reporting?
• Pricing

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Fees Pricing Structures

• Pricing structures depend on multiple variables
• Volume of reported claims
• The number of RREs \ Coordination of multiple
  business lines
• Level of training provided
• Amount of customer service
• Initial data set-up
• Organizations with an expected high volume of
  reportable claims
• May elect to have a flat fee structure and not
  volume driven.
• Initial set-up fees may range from 4,000 to
  50,000
• Ongoing quarterly fees may be charged separately
  and may range from 3,000 to 10,000.
• Query files may be an additional charge.
• Organizations with an expected low volume of
  reportable claims
• Some reporting agents are willing to charge per
  claim reported.
• Fees range from 18-25 per claim (a minimum
  number of claims may apply).
• Initial set-up fees are common and may start at
  4,000, quarterly fees may also apply.
• Query files may be an additional charge.

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Consider the resources within your reach

• CMS Section 111 Reporting mandate may seem
  overwhelming,
• but you may have the resources to satisfy the
  requirements.
• Volume
• Is the expected volume of reportable claims low
  enough that your claims department is capable of
  tracking all reports and response files?
• IT expertise
• Does your organization have IT personnel capable
  of crafting your own solution?
• Does your IT dept have the bandwidth to create
  the files required for
  submission?
• Electronic Reporting Method
• Can your organization send data via the required
  flat files?
• Flat files are simple plain text files, that
  contain one record per
• line. Some additional programming may be
  required to compile the complete file to be sent
  to CMS (i.e. include header trailer records).
• Your claim department must be able to review any
  responses from CMS and respond per the CMS User
  Guide.

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Additional items to consider

• File Transmission Method
• During registration select file transmission
  methods for the (1) Claim input file and the
  (2) Query Only File
• The user guide lists 3 options for transmitting
  data to CMS. Refer to section 15 Electronic Data
  Exchange.
• ConnectDirect
• SFTP
• HTTPS (Secure Website) Best method to use for
  low volume submissions (under 24,000 records),
  files are uploaded via a secured website.
• Various Data Elements
• Refer to the CMS Section 111 MSP Mandatory
  Reporting User Guide for file layouts
• For more information, sign up for the CMS
  computer based training (CBT) at
  http//www.cms.hhs.gov/MandatoryInsRep/05_Computer
  _Based_Training.aspTopOfPage

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Appendix-Premier Insurance Management Services
(PIMS)

• PIMS is a wholly-owned subsidiary of Premier,
  Inc. and is dedicated to helping not-for-profit
  hospitals.
• PIMS manages insurance programs created and
  governed by hospital systems, offering unique
  expertise in data management, clinical
  improvement and claims management.
• PIMS provides third party administrative services
  and unbundled claims, risk management and quality
  services

Our Mission To improve access to cost-effective
insurance coverage and provide expert management
services, pushing profits back to the
participants whenever possible. This will be
accomplished by creating data-driven, quality
improvement programs sharing best practices
leveraging positive results through comparative
benchmarking and capitalizing on efficiencies
created through alignment with Premiers national
programs and resources. - Premier Insurance
Management Services, Inc.
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Appendix-AEIX An Alternative To The Commercial
Insurance Market

• American Excess Insurance Exchange (AEIX), RRG is
  an alliance of sophisticated, not-for-profit
  health systems. Dedicated to financial health and
  quality care, members work together to enhance
  risk management protocols for each and every
  participating organization.

• AEIX is a 100 policyholder-owned insurance
  company.
• Started by owners of Premier first policy
  written June 1990. (AEIX is independent of
  Premier, Inc.).
• Regulated by the State of Vermont Department of
  Insurance.
• AEIX contracts with Premier Insurance Management
  Services for all management and operational
  duties/functions.

For more information about AEIX or PIMS contact
Les Meredith at [phone]
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APPENDIX Acronyms
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Appendix Definitions
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• Account Manager the individual who controls the
  administration of an RREs account and manages the
  overall reporting process. The Account Manager
  may be an employee or agent (See page 23 of CMS
  User Guide)
• Account Designees are individuals who assist the
  Account Manager with the reporting process and
  can be employees or agents. (see page 24 of CMS
  User Guide)
• Agents are vendors (data service companies,
  consulting companies, etc) the RRE may contract
  to act as an agent for reporting purposes. (see
  page 21 of CMS User Guide)
• Authorized Representative is the individual in
  the RRE organization who has the legal authority
  to bind to a contract and the terms of Section
  111. This individual will have ultimate
  accountability for the RREs compliance with
  reporting requirements. This individual cannot
  be an agent. (see page 23 of CMS User Guide)
• CMS Centers for Medicare Medicaid Services
• COBC Coordination of Benefits Contractor hired
  by Medicare to identify primary payers to
  Medicare for health benefits available to a
  Medicare beneficiary and to coordinate the
  payment process to prevent conditional payment of
  Medicare benefits. For liability insurance, the
  data submission process for reporting requirement
  will be with the COBC.
• Conditional payment A conditional payment is a
  Medicare payment for Medicare covered services
  for which another insurer is primary payer.
  Conditional payments are made under the condition
  that they are subject to repayment if and when
  the primary payer makes payment.

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Definitions
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• DOI CMS date of incident. A definition of when
  a loss occurred. In some instances, the
  definition that CMS uses will be different than
  that normally used in the insurance industry.
  Cumulative injury cases will differ in liability
  and Workers compensation (see user guide Appendix
  A fields 12-13).
• HICN Health Insurance Claim Number, The number
  assigned by the Social Security Administration to
  an individual identifying him/her as a Medicare
  beneficiary. This number is shown on the
  beneficiary's insurance card and is used in
  processing Medicare claims for that beneficiary
  (typically the social security followed by an
  alpha designator
• GHP Group Health Plans
• MMSEA Medicare, Medicaid, SCHIP Extension Act
  of 2007 which provides that
• MSP Medicare Secondary Payer is the term used
  when the Medicare program does not have primary
  payment responsibility (that is another entity
  has the responsibility for paying before
  Medicare)
• MSPRC Medicare Secondary Payer Recovery
  Contractor is the contractor hired by Medicare
  who is responsible for the recovery of amounts
  owed to the Medicare program as a result of
  settlements, judgments or awards, or other
  payments by liability insurance (including self
  insurance), no fault insurance, or workers
  compensation.
• NGHP Non-Group Health Plans. Includes liability
  insurance, self-insured plans, No-fault
  insurance, Workers Compensation

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Definitions
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• ORM On-going Responsibility of medicals refers
  to the RREs responsibility to pay, on an ongoing
  basis, for the inured partys (Medicare
  Beneficiarys) medicals associated with a claim.
  Typically applies to No-fault and workers
  compensation claims.
• SCHIP State Childrens Health Insurance
  Programs
• TPOC Total payment obligation to claimant refers
  to the dollar amount of a settlement, judgment or
  award or other payment in addition to/apart from
  ORM.

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Appendix-PIMS Contacts

• Les Meredith, vice president claims
• 858-509-6529/les_meredith_at_premierinc.com
• Becca Price, claims manager
• 858-509-6598/becca_price_at_premierinc.com
• Priscilla Sanchez, data insurance and reporting
  manager
• 858-509-6588/priscilla_sanchez_at_premierinc.com