By Michelle Landers, Esq. Executive Vice President—General Counsel,
KEMI
In the third quarter 2008 AASCIF Newsletter, Jill Beard of
Louisiana asked what kind of movie would best describe your claims
department with Medicare Set-Asides (MSA’s) in the mix. She opined
that it would be long, confusing and “possibly a horror flick.”
With the enactment of Section 111 of the Medicare, Medicaid and
SCHIP Extension Act, that “horror flick” is now in 3-D and is of
epic proportions!
The Medicare Secondary Payer Act placed a
requirement on a Primary Payer—including all workers’ compensation carriers—to provide Medicare with “notice” of any
claim involving a Medicare beneficiary. Section 111, effective
on July 1, 2009, significantly changed the notice requirement to an
affirmative obligation that does not currently exist.
Under Section 111 all insurers will be required to:
(a) proactively identify claimants entitled to
Medicare, and
(b) notify Medicare of such entitlement.
Reporting is triggered (1) upon claim resolution
where there is a settlement, judgment, award or other payment on or
after July 1, 2009; and (2) where the insurer has accepted ongoing
responsibility for medical payments regardless of the date of
initial resolution. If a claim meeting the criteria is identified,
the Responsible Reporting Entity (RRE) has an obligation to
electronically report a lengthy set of data elements.
Planning for implementation of the new reporting
requirements continues to be difficult, at best, because the process
being established by CMS is ongoing. CMS has been holding conference
calls (referred to as Town Hall Teleconferences) on a regular basis
to allow carriers and industry representatives to ask questions and
seek clarification about the requirements. However, numerous
questions still remain to be answered.
One of the most significant unknowns which is
hampering preparation for compliance is the final list of data
fields that CMS will require to be reported. Although CMS has
already identified and proposed more than 100 different data fields
for reporting, the list is not complete and CMS has indicated that
it does not expect to finalize the details until sometime in
February or March 2009.
Another challenge for carriers is establishing
internal protocols and workflows for determining Medicare
entitlement. Under MMSEA, each time a settlement, judgment, award,
or payment is made to a claimant who is entitled to Medicare
benefits, insurers are required to report. Under Section 111,
determining Medicare entitlement is the responsibility of the
carriers, however, the CMS guidelines do not currently provide any
written procedures or guidance to RRE’s for establishing Medicare
entitlement. Recent oral statements from CMS, made at a Town Hall
Teleconference, indicate that a “Query Access” system will be
available to RRE’s, however the exact operating parameters of the
system are still unknown. But incorrect identification of a
claimant’s entitlement status and failure to report will subject
the carrier to a penalty of $1,000 per day, per claim.
The challenges of preparing for implementation to be
compliant with requirements that are not concrete involve both
significant development efforts and ongoing production costs. With
July 1, 2009 looming on the horizon some carriers have chosen to
turn to outside organizations such as data warehouses or reporting
organizations for help. If that is the route that your Fund
chooses to pursue, keep in mind that the CMS rules specifically
state that such agents are not RRE’s for purposes of satisfying
the reporting responsibilities and that liability for reporting
remains with the RRE. The RRE is solely responsible and accountable
for complying with instructions from CMS.
Numerous documents, including the most recent
“Revised Interim Record Layout” for reporting under Section 111
and information about the Town Hall Teleconferences are available at
www.cms.hhs.gov/MandatoryInsRep.
CMS has advised that all RRE’s should check this site regularly
for updates on the reporting requirements.
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