MMSEA reporting is in full swing! Because the thresholds have decreased, additional care must be taken to ensure all required settlements are reported. Please click here to view the latest issue of GRG's MMSEA Newsletter.
New User Guide – Version 3.4
Version 3.4 was issued on July 3rd. It is now divided into five separate but related chapters, incorporating CMS Alerts which were issued since the issuance of Version 3.3. Version 3.4 does not introduce any significant policy changes. Although in the long run this format will make the User Guide easier to use, if you have questions about where to find a reference in the new guide, give us a call.
Loss of Consortium & Other Derivative Claims
MMSEA reporting on loss of consortium (“LOC”) claims is a topic which has produced much confusion. If you have a settlement that contains a release for LOC, or other derivative claims such as loss services, loss of companionship, mental anguish, etc. please contact GRG and we will assist you in determining if you have a MMSEA reporting obligation.
Medicare is considering an exclusion from MMSEA reporting when certain conditions are met. Medicare has not yet approved this exclusion; therefore, we recommend that you contact GRG for guidance on whether MMSEA reporting will be required.
What Triggers Reporting?
We know that the RRE must report a Total Payment Obligation to the Claimant (TPOC) which generally represent a ‘one-time’ or ‘lump sum’ payment of a settlement, judgment, award, or other payment intended to resolve or partially resolve a claim. The RRE must also report no-fault/Med Pay/PIP and workers’ compensation claims. But what triggers when they must be reported?
Version 3.4 of the User Guide defines the TPOC Date as “the date the payment obligation was established.” In cases with one claimant, this is typically the date the settlement is signed. However, in mass tort or similar large-scale actions where you have multiple claimants being paid under a master settlement agreement, the date that triggers reporting is: (1) when the individual claimant is identified; and (2) the allocation to that individual is determined. This can be different for each claimant. In this situation, please contact us and we will assist you to determine when each claimant’s allocation must be reported.
Thresholds for Reporting – NOTICE $5,000 OR ABOVE NOW IN PLAY!!
CMS revised the mandatory minimum thresholds on June 21st. In the chart below you will see that CMS extended the threshold time period for the $5,000 amount, eliminated the $600 threshold amount and added a minimum threshold of $300 which is in place indefinitely. The thresholds for lump sum liability settlements have dropped quickly, so we recommend that you look closely at the claims being settled to ensure that you are meeting your reporting obligations.
Mandatory reporting is required when the TPOC date and settlement amount are as follows:
- Over $100,000 – On or after October 1, 2011
- Over $50,000 – On or after April 1, 2012
- Over $25,000 – On or after July 1, 2012
- Over $5,000 – On or after October 1, 2012
- Over $2,000 – On or after October 1, 2013
- Over $300 – On or after October 1, 2014
There is no minimum threshold for no-fault and on-going responsibility for medicals (“ORM”) cases; and there are limited minimum thresholds for workers’ compensation. Any cases where you paid medical expenses and/or accepted responsibility for ongoing medical expenses, as of January 1, 2010, need to be reported. Mandatory reporting started in the first quarter of 2011. If you have any cases you think should have been reported previously, please contact us and we will work with you to get those reported, as well as the cases that have current reporting requirements.
Medical payments/PIP payments that are on many general liability policies must also be reported. There is no minimum reporting threshold for those payments; so check your policies to see if you have this coverage, and if so, whether these payments are being reported.
What ICD-9 Code do we Use in a Loss of Consortium (“LOC”) Claim?
Medicare is aware that in many LOC claims, no medical treatment has been incurred so there is no proper ICD-9 code. In limited situations, the RRE can use the code ‘NOINJ’, which stands for no injury identified.
Chapter IV, Section 6.2.5.1 in Version 3.4 of the User Guide provides direction for when this code may be used; however, Medicare provided additional guidance regarding the use of the ‘NOINJ’ code on their website when the claim is resulting from such areas as LOC, errors or omissions, directors and officers or wrongful action. Medicare states, “the ‘NOINJ’ code is used where a settlement, judgment, award or other payment releases medicals or has the effect of releasing medicals, but the type of alleged incident typically has no associated medical care and the Medicare beneficiary/injured party has not alleged a situation involving medical care of a physical or mental injury.”
Medicare also states that the ‘NOINJ’ code cannot be used on claims reflecting ORM and cannot be used as a default. Accordingly, due diligence must be used prior to using this code.
Exemption From Reporting for Some Claims Involving Exposure, Ingestion or Implantation
Medicare provides, in Version 3.4 of the User Guide at Chapter III, Section 6.5.1, guidance on when claims involving exposure, ingestion and implantation may be exempt from MMSEA reporting. These three specific requirements which must be met are:
- All exposure or ingestion ended, or the implant was removed before December 5, 1980; and
- Exposure, ingestion or an implant on or after December 5, 1980 has not been claimed and/or specifically released; and
- There is either (a) no release for the exposure, ingestion, or an implant on or after December 5, 1980; or (b) where there is such a release, it is a broad general release (rather than a specific release), which “effectively releases” exposure or ingestion on or after December 5, 1980. The rule also applies if the broad general release involves an implant.
If all three of these criteria are met, MMSEA reporting is not required. Questions that many RREs have, however, is what exactly is the definition of “effectively releases”. If you have questions about a specific case and want assistance in deciding if a case must be reported, please contact us.
What Should the RRE do when they Terminate an ORM Case?
There have been a few hiccups in cases where the defense has reported a claim with on-going responsibility for medicals. In some scenarios, the Medicare beneficiary has gone in for medical treatment or office visits only to learn their Medicare benefits have been denied because Medicare is showing that someone else has primary payment responsibility for medical expenses. This has happened even when the beneficiary is being treated for something that is completely unrelated to the injury the defense reported.
Medicare is working through these issues, internally; however, Medicare recommends that the defense report the closure of an ORM claim as soon as possible. There are three ways to do this:
You can report the termination of ORM in the next quarterly submission.
Medicare will allow you to report the ORM termination prior to your next submission window. If you have this situation, please contact GRG and we will work with you to file a report prior to your next normal quarterly submission.
Call the MSPRC at 800-999-1118 and report the ORM termination.
How do we handle subsequent payments?
A TPOC is a single payment obligation reported in total regardless of whether it is funded through a single payment, an annuity or a structured settlement. In most cases, you will report a TPOC one time under Section 111, regardless of the payment stream. Frequently in mass tort cases, there may be an initial payment under the TPOC and then a later, final distribution is made to the claimants of remaining funds or of interest earned. These additional payments, directly related to the initial TPOC would be reported on a second record tying the subsequent distribution to the initial distribution.
If an RRE negotiates separate, different settlements at different times for a liability claim, then each settlement amount is reported separately. If you have questions about any specific case, please contact us.
Clinical Trials
An adverse effect resulting from a clinical trial is reportable as ORM and there is no minimum threshold amount for reporting. The company that is having the drug/object tested is responsible for reporting, not the facility that is actually administering the test.
Section 6.5.1 of Chapter III provides the only reference in the User Guide as to how MMSEA reporting should be handled for clinical trials. This section states “When payments are made by sponsors of clinical trials for complications or injuries arising out of the trials, such payments are considered to be payments by liability insurance (including self-insurance) and must be reported. The appropriate Responsible Reporting Entity (RRE) should report the date that the injury/complication first arose as the Date of Incident (DOI). The situation should also be reported as one involving Ongoing Responsibility for Medicals (ORM).” There has been significant feedback provided to Medicare regarding this issue, however, the reporting requirements remain unchanged. Payments made for adverse effects occurring on or after January 1, 2010, must be reported. If you self-administer or outsource clinical trials and you are not reporting the adverse effects that have been documented, please contact us and we will assist you with setting up a reporting procedure.
Frequently Asked Questions
Do Employment Practices Liability (“EPL”) claims need to be reported?
EPL claims are required to be reported under MMSEA only if medical expenses were paid and/or released, or effectively released, under the settlement terms and the claimant is Medicare entitled. So why does Medicare require that the case be reported if no medical expenses have been paid?
The reason for this is Medicare wants to be on notice of a claim where the claimant may seek subsequent medical treatment (i.e. for stress or depression) which is related to the underlying reason for the settlement.
Do we include the indemnity portion of a claim in the TPOC or ORM case that we are reporting?
In most scenarios involving workers’ compensation claims, the indemnity payments related to a claim triggers reporting of the case as ORM. Medicare provides the example that if an RRE is making periodic “indemnity only” payments to the injured party to compensate for lost wages related to the underlying workers’ compensation or no-fault claim, the RRE has implicitly, if not explicitly, assumed ORM. The periodic payments related to lost wages are not reported as TPOCs.
Do we need to report payments paid out of a Qualified Settlement Fund (“QSF”)?
The User Guide, at Chapter III, Section 6.5.1, provides an exemption from reporting if ALL of the following criteria are met:
- The settlement, judgment, award or other payment is for a liability case, not including Ongoing responsibility for medicals (ORM);
- The payment will be issued by a QSF under Section 468B of the Internal Revenue Code, in connection with a bankruptcy proceeding; and
- The funds were paid into a trust prior to October 1, 2011
Do I need to report if the claimant states there are no liens or outstanding claims with Medicare?
Yes, you need to report the claim if the claimant is Medicare entitled and the threshold for reporting is met; regardless of whether there is a reimbursement required. The Medicare Secondary Payer statute requires reimbursement where Medicare has paid injury related medicals for the claimant, so it is important to ensure proper repayment to Medicare occurs and you document your claims file accordingly.
This is important even if the claim is under the threshold for MMSEA reporting. If you have an unrepresented claimant, you can contact us to discuss the process needed to ensure that the liens are identified and reimbursed.
The RRE is responsible to report a settlement, judgment, award or other payment (subject to thresholds) regardless of the lien status. An RRE who fails to report a claim could incur $1,000 per day, per claim penalty for non-compliance. Additionally, if the Medicare lien is not reimbursed, CMS can impose double damages plus interest on the claimant, the claimant’s attorney and/or the payer.
Medicare Set Aside Service (“MSA”) Offering!
MSAs are not a part of MMSEA reporting, but because they are a part of total Medicare compliance we would like to introduce you to a new, innovative, MSA service offering that GRG provides. The MSA Decision Engine gives clients a straightforward report that states whether or not an MSA is recommended, as well as next steps to ensure proper Medicare compliance. It takes a formalized approach to each case by asking a series of questions before generating a recommendation. The interactive online tool is based on all relevant statutory, regulatory and administrative guidance from CMS, as well as relevant case law.
Please click here for more information or give us a call and we can schedule a demonstration for you.
Reminders:
- Please forward ALL emails that you receive from COBC to Patti Scamardo.
- If the Authorized Representative and/or Account Manager are no longer with the RRE, the role needs a replacement with the COBC. Contact your EDI Representative to make the necessary changes and let us know.
- If you receive a Conditional Payment Letter (CPL) from Medicare or a claimant, do not automatically report every code. Typically, there will be many codes listed for other illnesses or conditions for which you are not responsible. For instance, the claim is for a broken arm only, but the CPL includes codes for hypertension. You do not report hypertension code; otherwise, you are informing Medicare that you are responsible for the hypertension, as well.
- If you receive a 51 disposition code (Claimant is not identified as a Medicare beneficiary) on a claim response, verify the injured party information was entered correctly, especially in cases where the query had returned a 01 (Medicare entitled). There may be a typo in the claim file that has caused the injured party to be a “no match”.
- CMS confirmed in the June 19th town hall call that a governmental entity is engaged in a trade or business and therefore the governmental entity is obligated to reimburse and report under MMSEA.
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