Flagship Services Group is one of the country’s premiere Medicare Secondary Payer (MSP) compliance services providers. It focuses on the property and casualty insurance industry, meaning its clientele are auto, no-fault, medical malpractice, products liability, general liability and workers compensation insurers. As a result, Flagship speaks to case adjusters, claims supervisors, regional managers, and insurance executives from around the country on a daily basis. More and more, these conversations are about Mandatory Insurer Reporting (MIR). And very specifically, more and more of these conversations are about correctly reporting Ongoing Responsibility for Medicals (ORM), and Total Payment Obligation to Claimant (TPOC).
“When do I accept ORM?” “When do I terminate ORM?” “If I get a conditional payment closure letter from the CRC or BCRC, can I terminate ORM?” If I administratively close my file, may I terminate ORM?” “When do I report TPOC?” “If I settled the indemnity portion of my work comp file, but keep medical care open, must I report the indemnity settlement as TPOC?” “Any difference in reporting TPOC between no-fault, liability, and workers compensation claims?” These are just a few of the questions we hear from clients every day. As MIR becomes an integral part of MSP compliance, and CMS continues to rely more and more on each entity’s ORM and TPOC reporting information, it is crucial that auto, no-fault, liability, and workers compensation insurers understand each of these concepts, and appreciate their significance and importance in MSP compliance.
Introduction to Mandatory Insurer Reporting
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) added MIR requirements to the Medicare Secondary Payer Act with respect to Medicare beneficiaries who have coverage under group health plan (GHP) and non-group health plan (NGHP) arrangements, and for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation cases.
42 U.S.C. 1395y(b)(8) indicates Applicable Plans (AP) must report specific information to government. The statute defines an AP as the following laws, plans, or other arrangements, including the fiduciary or administrator for such law, plan, or arrangement: “liability insurance (including self-insurance), no-fault insurance, and workers' compensation laws or plans.”
42 U.S.C. 1395y(b)(8) also provides what must be reported. The statute makes it clear that an AP must provide “the identity of a Medicare beneficiary whose illness, injury, incident, or accident was at issue as well as such other information specified by the Secretary of Health and Human Services (HHS) to enable an appropriate determination concerning coordination of benefits, including any applicable recovery claim. Data elements are determined by the Secretary.”
The statute also determines when and how reporting must be done. “In a form and manner, including frequency, specified by the Secretary. Information shall be submitted within a time specified by the Secretary after the claim is addressed/resolved (partially addressed/resolved) through a settlement, judgment, award, or other payment, regardless of whether or not there is a determination or admission of liability). Submissions will be in an electronic format.”
Since the adoption of such statutory language, CMS has produced a significant volume of information, instructions, and policy regarding MIR. All official instructions pertinent to Mandatory Insurer Reporting are on the Section 111 website found at http://go.cms.gov/mirnghp. Additional information related to MIR Section 111 can be found on the login page of the Section 111 Coordination of Benefits Secure Website (COBSW) at https://www.cob.cms.hhs.gov/Section111/. All of the information contained herein is found in and is a verbatim rendition of the information provided in the Section 111 NGHP User Guide, Version 5.1, Chapter III, Policy Guidelines published October 10, 2016, found here.
Important Terms Used in Mandatory Insurer Reporting
The following terms are critical to understanding the Section 111 NGHP mandatory insurer reporting process:
- “Entities responsible for complying with Section 111 are referred to as Responsible Reporting Entities (RREs).”
- “Liability insurance (including self-insurance), no-fault insurance, and workers’ compensation are collectively referred to as Non-Group Health Plan (NGHP).”
- “Ongoing Responsibility for Medicals (ORM) refers to the RRE’s responsibility to pay, on an ongoing basis, for the injured party’s (the Medicare beneficiary’s) medical care associated with a claim. Typically, ORM only applies to no-fault and workers’ compensation claims.”
- “Total Payment Obligation to the Claimant (TPOC) refers to the dollar amount of a settlement, judgment, award, or other payment in addition to or apart from ORM. A TPOC generally reflects a one-time or lump sum settlement, judgment, award, or other payment intended to resolve or partially resolve a claim. It is the dollar amount of the total payment obligation to, or on behalf of the injured party in connection with the settlement, judgment, award, or other payment.”
Reporting Ongoing Responsibility for Medicals (ORM)
The reference to “ongoing” is not related to “ongoing reporting” or “repeated reporting of claims under Section 111”, but rather to the “RRE’s responsibility to pay, on an ongoing basis, for the injured party’s (Medicare beneficiary’s) medicals associated with the claim.” This normally applies to no-fault and workers’ compensation claims, but may occur in liability insurance (including self-insurance).
The trigger for reporting ORM is “the assumption of ORM by the RRE—when the RRE has made a determination to assume responsibility for ORM, or is otherwise required to assume ORM—not when (or after) the first payment for medicals under ORM has actually been made.” In other words, medical payments do not actually have to be paid for ORM reporting to be required.
If an RRE has assumed ORM, “the RRE is reimbursing a provider, or the injured party, for specific medical procedures, treatment, services, or devices (doctor’s visit, surgery, ambulance transport, etc.). These medicals are often being paid by the RRE as they are submitted by a provider or injured party. The dollar amounts for ORM are not reported, just the fact that ORM exists or existed.”
Therefore, irrespective of the date of actual first payment of medical care associated with the claim, ORM is generally established as soon as the RRE has accepted compensability or responsibility for ongoing medical care related to the claim. Having said this, simply because an RRE has accepted ORM as of the date of the accident, or when it first received notice of the claim, does not mean that ORM exists forever. ORM can be terminated.
Reporting ORM Termination Date
Once ORM has been accepted by the RRE, it should never be unaccepted. Instead, “when ORM ends, the RRE reports an ORM Termination Date. If there was no TPOC settlement, judgment, award, or other payment related to the claim (an actual settlement for medicals and/or lost wages, etc.), the RRE does not report a TPOC Amount on the claim, but instead will submit an ORM Termination Date.”
ORM ends in no-fault and workers compensation situations when policy limit is reached, coverage has been denied, the claimant is determined not to be an employee of the employer, it is established that the accident did not take place in the course and scope of employment, the statute of limitations has run, medical evidence indicates injuries are not related to the claim, medical opinions show there is no further need for medical care related to the claim, or there is a judicial finding of no coverage, causation, further medical need, or entitlement exists, just to name a few.
ORM does not end in no-fault and workers compensation situations if the RRE remains responsible for medical care related to the claim, if indemnity benefits are settled or exhausted but medical entitlement remains open, if the payer administratively closes its file but the claimant remains eligible for medical care payments connected to the claim, or if there remains unused dollars within policy limits that may go towards medical care related to the claim.
It is important for RREs to understand that “reporting ORM is not a guarantee by the RRE that ongoing medicals will be paid indefinitely or through a particular date; it is simply a report reflecting the responsibility currently assumed. Ongoing responsibility for medicals (including a termination date, where applicable) is to be reported without regard to whether there has also been a separate settlement, judgment, award, or other payment outside of the payment responsibility for ongoing medicals.”
Cause of Injury and ICD Diagnosis Codes
It is critical to report ORM with information regarding the cause and nature of the illness, injury or incident associated with the claim. “Medicare uses the information submitted in the Alleged Cause of Injury, Incident or Illness (Field 15) and the ICD Diagnosis Codes (starting in Field 18) to determine what specific medical services claims, if submitted to Medicare, should be paid first or primary by the RRE and considered only for secondary payment by Medicare.” The ICD-9/ICD-10 codes provided in these fields must provide enough information for Medicare to identify medical claims related to the underlying injury, incident or illness claim reported by the RRE.
ORM Reporting Dates and Exclusions
No-fault insurance ORM that existed or exists on or after January 1, 2010 must be reported. Liability Insurance (including Self-Insurance) ORM that existed or exists on or after January 1, 2010 must be reported. Workers’ Compensation ORM that existed or exists on or after January 1, 2010 must be reported.
Although there are no exceptions to no-fault and liability insurance ORM reporting, workers' compensation claims that meet all of the following criteria are excluded from reporting:
- The claim is for “medicals only;”
- The associated “lost time” is no more than the number of days permitted by the applicable workers’ compensation law for “medicals only” (or 7 calendar days if applicable law has no such limit);
- All payment(s) has/have been made directly to the medical provider; and
- Total payment for medicals does not exceed $750.00.
“Once a workers’ compensation ORM claim is excluded from reporting, it does not need to be reported unless the circumstances change, such that it no longer meets the exclusion criteria listed.” In other words, the claim does not need to be reported unless something other than medicals is included, there is more lost time, a payment is made to someone other than a provider, and/or payments for medicals exceed $750.
Reporting Total Payment Obligation to the Claimant (TPOC)
The TPOC Amount refers to the dollar amount of a settlement, judgment, award, or other payment in addition to or apart from ORM. “A TPOC generally reflects a one-time or lump sum settlement, judgment, award, or other payment intended to resolve or partially resolve a claim. It is the dollar amount of the total payment obligation to, or on behalf of the injured party in connection with the settlement, judgment, award, or other payment.” Therefore reimbursements paid for specific medical claims submitted to an RRE, paid due the RRE’s ORM for the claim, do not constitute separate TPOC Amounts.
The TPOC Date is not necessarily the payment date or check issue date. “The TPOC Date is the date the payment obligation was established. This is the date the obligation is signed if there is a written agreement, unless court approval is required. If court approval is required, it is the later of the date the obligation is signed or the date of court approval. If there is no written agreement, it is the date the payment (or first payment if there will be multiple payments) is issued.”
TPOC Mandatory Reporting Thresholds
Over the last several years, CMS has revised the mandatory reporting thresholds and implementation timeline for all no-fault, liability insurance (including self-insurance) and workers’ compensation TPOC settlements, judgments, awards, or other payments for Section 111 TPOC reporting. “RREs must adhere to these requirements when determining what claim information should be submitted on initial and subsequent quarterly update Claim Input Files and Direct Data Entry (DDE) submissions. These thresholds are solely for the required reporting responsibilities for purposes of 42 U.S.C. 1395y(b)(8), or Section 111 MSP mandatory insurer reporting requirements for liability insurance (including self-insurance), no-fault insurance, and workers’ compensation.”
No-Fault Insurance TPOCs
“RREs are required to report all no-fault insurance TPOCs with dates of October 1, 2010 and subsequent. RREs may, but are not required to, include no-fault TPOCs with dates prior to October 1, 2010.”
Until October 2016, there was no deminimis dollar threshold for reporting no-fault TPOCs. However, based on cost of recovery data obtained in FY 2015, CMS recently established a “settlement threshold of $750 for no-fault insurance, where the no-fault insurer does not otherwise have ongoing responsibility for medical expenses coverage.” Therefore, settlements of $750 or less for no-fault insurance will not need to be reported and Medicare’s conditional payment amount related to these settlement cases will not need to be repaid.
Liability Insurance (including Self-Insurance) TPOCs
“RREs are required to report TPOC Dates of October 1, 2011 and subsequent. RREs may, but are not required to, include TPOCs with dates prior to October 1, 2011. RREs are required to report liability insurance (including self-insurance) TPOCs only if the cumulative TPOC Amount exceeds the reporting threshold for the most recent TPOC Date. RREs may submit TPOCs that are less than or equal to the TPOC dollar threshold on an add-record only if the claim has ORM. RREs will not be penalized for submitting claim reports with TPOCs that are under threshold. The BCRC will total all TPOC Amounts reported on the claim record when determining if the claim meets the applicable reporting threshold.”
CMS has continued to revise the Implementation Timeline and TPOC Dollar Thresholds for certain liability insurance (including self-insurance) TPOC settlements, judgments, awards, or other payments. As of October 2016, CMS will “maintain the settlement threshold amount for physical trauma-based liability insurance settlements (excluding alleged ingestion, implantation or exposure cases) at $1,000.” Therefore, in such situations where the liability insurance settlement is $1,000 or less, CMS will not require reporting of the settlement and CMS will not assert a recovery claim.
Workers’ Compensation TPOCs
“RREs are required to report TPOCs with dates of October 1, 2010 and subsequent. RREs may, but are not required to, include TPOCs with dates prior to October 1, 2010. RREs are required to report workers’ compensation TPOCs only if the cumulative TPOC Amount exceeds the reporting threshold for the most recent TPOC Date. RREs may submit TPOCs that are less than or equal to the TPOC dollar threshold on an add-record only if the claim has ORM. RREs will not be penalized for submitting claim reports with TPOCs that are under threshold. The BCRC will total all TPOC Amounts reported on the claim record when determining if the claim meets the reporting threshold.”
CMS has continued to revise the Timeline and TPOC Dollar Thresholds for workers’ compensation TPOC settlements, judgments, awards, or other payments. As of October 2016, based on cost of recovery data obtained in FY 2015, “CMS has established a settlement threshold of $750 for workers’ compensation, where the workers’ compensation entity does not otherwise have ongoing responsibility for medical expenses coverage.” Therefore, settlements of $750 or less for workers’ compensation will not need to be reported and Medicare’s conditional payment amount related to these settlement cases will not need to be repaid.
MIR is no longer an MSP compliance tool of the future. It is here. It is being used now. The information provided by RREs through MIR is being used by CMS and its contractors on a daily basis to better identify conditional payments, and to better define future medical responsibilities associated with no-fault, liability, and workers compensation claims. Make no mistake about it, MIR is affecting claims handling and settlement negotiations. ORM is redefining government’s ability to identify the right debtor and collect from it and TPOC is reestablishing government’s past and future responsibility.
Where a no-fault or liability insurer or workers’ compensation entity has reported to CMS that it has ORM for specific care or an injury, or has reached TPOC, CMS claims processing contractors (CRC for ORM pre-settlement conditional payments, BCRC for post-settlement conditional payments, and WCRC for future medical allocations), will use the information provided by the insurer or workers’ compensation entity through the MIR process to determine whether Medicare is owed past conditional payments and whether it is able to make primary payment for those claims in the future. Welcome to the future of Medicare compliance for primary payers.
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About Rafael Gonzalez
Rafael Gonzalez, Esq. is Executive Vice President and Chief Legal Counsel at Flagship Services Group, the only national Medicare Secondary Payer services provider focusing on and offering comprehensive mandatory reporting, conditional payments, and set aside allocation compliance services to the property and casualty insurance industry. He has been a part of the insurance, medical, and disability industries since 1983. He has served as a thought leader on all aspects of liability, workers compensation, social security, Medicare, and Medicaid compliance since 1990. He speaks and writes on mandatory insurer reporting, conditional payment resolution, set aside allocations, CMS approval, and MSA and SNT professional administration, as well as the interplay and effect of these processes and systems and the Affordable Care Act throughout the country. Rafael blogs on these topics at Medicare Compliance for P&C Insurers at http://www.flagshipservicesgroup.com/blog. He can be reached at firstname.lastname@example.org or 813.967.7598