On October 7^th, CMS released Version 7.7 of the MMSEA NGHP User Guide with a few key updates. This iteration adds additional information regarding the steps needed and the emails that are issued during RRE registration, specifically Ch. 1 Table 7-1, Ch. 2 Table 6-4, and Ch. 4 Table 12-1. In general, these tables provide an easy-to-read overview of the registration process from TIN input, to PIN verification, and RRE vetting. Version 7.7 also adds some clarity to the reporting of wrongful death claims. Ch. 3 has added a note indicating –

“Settlements, judgments, awards, or other payments obtained entirely under the wrongful death theory of liability, which do not claim and release medicals, or have the effect of releasing medicals, are not required to be reported because Medicare would have no recovery claim against such a payment.”

However, the headline for this update is that CMS has added a warning flag for late reporting of claims reflecting open ORM. Chapters 4 and 5 both note that waring flag 04 has been added. This warning flag will be applied to claim response files with open ORM records, when the later date of either the CMS Date of Incident on the claim record, or the Part A Add Date is greater than 135 calendar days from the Start Date of the RRE’s submission period. Said differently, warning flag 04 will be applied to claims with open ORM that are reported more than 135 days after the DOI (or after the first date of entitlement for claims in which ORM was open prior to Medicare eligibility).

Prior to this release, CMS did not have a mechanism for providing RREs with a response warning indicating potential late reporting for claims with open ORM. In the past, RREs would receive a compliance flag (now called “warning flags”) for reporting a TPOC Date or an ORM termination date more than 135 days after its occurrence. This new warning flag provides RREs with an indication that the report, while accepted and reflecting ORM, was submitted more than 135 days after its occurrence.

As a reminder, the period for claims that may be assessed a civil monetary penalty begins in just a few days, and while an NGHP record must be more than 365 days late in order to be possibly subject to penalty, these warning flags serve as a reminder that if reporting is delayed, you put yourself at risk for CMP. As a best practice, RREs should ensure that they are reporting all claims that meet all applicable reporting thresholds error free and in a timely manner. In order to help ensure that you mitigate risk, and identify problem areas, an internal diagnostic review can be an invaluable tool. Through a review of your policies and procedures, your reporting system logic, and through a selection of claims, RREs are able to identify problem areas that may expose them to penalties or downstream liabilities if not addressed. This could include, but is certainly not limited to, late collection of query information or false negative query results, inaccurate diagnostic coding, late or improper entry of ORM, ORM term, and/or TPOC information, as well as system issues preventing proper reporting or failing to alert your team members to issues that need to be resolved.

For question, concerns, and comments about the recent User Guide updates, designing a diagnostic review, as well as general inquiries about Section 111 Reporting compliance please contact us at info@allankoba.com.

On August 8^th, CMS issued an alert confirming that COBSW system updates are coming soon. The Section 111 Coordination of Benefits Secure Website (COBSW) provides general information on Section 111 reporting, links and instructions, reference materials including various user guides, as well as a secure portal which provides the ability to manage your RREs, run Medicare entitlement queries, perform DDE reporting, and obtain query and claim response files. The upgrades, scheduled for September 7^th, do not include any material changes to the COBSW. However, CMS states that these upgrades aim to enhance the end user experience across the site. This alert indicates that the layout and overall look of the portal will be updated. Further, an updated NGHP User Guide is anticipated to be released along with this upgrade.

This update serves as a reminder to ensure that you are familiar with the use of the COBSW and the assistance that it can offer in ensuring that your Section 111 Mandatory Insurer Reporting program is in compliance with all available guidance. As a reminder, the period for possible assessment of Civil Monetary Penalties for noncompliance begins this October.

For question, concerns, and comments about the COBSW and the coming upgrades, as well as general inquiries about Section 111 Reporting compliance please contact us at info@allankoba.com.

CMS has released its first version of the Non-Group Health Plan Section 111 Reporting User Guide of 2024. Not long after a recent informational webinar regarding Civil Monetary Penalties held on January 18, CMS released version 7.4 of the User Guide, in which the primary update is the addition of Ch. III, sect. 5.1 – Civil Monetary Penalties. This addition does not contain any surprise details that were not a part of the informational webinar, or prior communications regarding CMPs, but rather provides a general overview of what may subject an RRE to penalties, when, and how, as well as a description of CMS’ audit methodology. The full update can be found here – https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting/user-guide. However, a brief summary of the additions outlined in section 5.1 are:

• RREs that fail to comply with the Section 111 reporting requirements may be subject to a CMP of up to $1000 (adjusted for inflation) for each day of noncompliance.
• The regulations outlining this authority are effective as of 12/11/2023 and will be applied to RREs beginning 10/11/2024.
• CMS will select a randomized sample of 250 new MSP ‘occurrences’ each quarter and audit these occurrences to determine whether RREs have complied with the reporting requirements.
• RREs must report within one year of the date of incident, when ongoing responsibility for medicals (ORM) is assumed; or within one year of the TPOC date to be considered compliant.
• The occurrences to be audited will include both Section 111 submissions and records from sources outside of the Section 111 reporting process, to ensure that CMS does not miss those situations where an RRE has entirely failed to report the occurrence.
• RREs will only be informed when there is a potential instance of non-compliance.
• RREs will be notified of potential non-compliance by CMS and afforded the opportunity to present information that demonstrates that the RRE was actually compliant.

Of note, CMS indicates that the information relevant to respond to, or otherwise defend against, a potential CMP will vary, but may not include situations where the RRE submitted records that CMS was unable to process due to errors in the claim input file. Directly in line with this, last week, CMS also released the top ten reporting errors received by NHGP RREs between July 2023 – December 2023. A snapshot of the top ten is:

The top three errors here include reporting under an invalid TIN or office code, reporting an invalid ICD code 1, and reporting erroneous ‘delete’ records. While RREs should ensure that their entire claim input file is accurate and error-free to ensure the record is accepted and you avoid CMPs, fields including ICD codes, ORM, and TPOC information are also of particular interest as they can have a direct impact on your conditional payment resolution process.

Given the information that we know about future CMPs and the start date of October 2024, now is as good of a time as any to ensure that your Section 111 Reporting program is fully compliant and ORM and TPOC occurrences are being reported in a timely manner. An internal review of your current reporting processes to diagnose any shortcomings is a great place to start. For questions about these updates, as well as general inquiries about Section 111 Reporting please contact us at info@allankoba.com.

CMS hosted a live webinar on January 18^th at 1pm EST.  This webinar provided valuable information for responsible reporting entities (RREs) as the industry prepares for CMS to begin quarterly compliance audits and the imposition of civil monetary penalties.  Please find the highlights of the webinar below and if you have further questions about your Section 111 reporting program and what you can do now to get ready for CMS audits, please reach out to info@allankoba.com and we can assist.  Our Section 111 Reporting audit team is ready to help RREs ensure proper reporting and avoid civil monetary penalties.

Highlights and Key Takeaways:

• Key Dates:
  • October 11, 2025: Compliance review period begins.
  • April 1, 2026: CMS will begin compliance audits.
• CMS confirmed that the civil monetary penalty (CMP) rulemaking is prospective in nature. There will be no retroactive enforcement per CMS.
• The CMP rulemaking does not change any existing reporting requirements and RREs are reminded to ensure full compliance today and in the future.
• All technical reporting questions should be submitted to your EDI representative. This information can be found on the RRE Profile Report.
• A random sample of 250 new records per quarter will be audited/reviewed by CMS beginning in the first quarter of 2026.
  • Records will include self-reported records outside of the Section 111 reporting data. CMS will cross-reference other data that they have access to in order to ensure they are also auditing RREs that have failed to report claims via Section 111 rules.
• Definitions provided by CMS of Key Terms:
  • Audit: The process by which CMS will randomly select 250 records for review to determine if they were submitted timely and, if not, if they are ripe for a CMP.
  • Record: Any individual occurrence of a TPOC or ORM for a Medicare beneficiary that must be reported to CMS.  If a particular case has both an ORM and a TPOC component, this will constitute two records.
  • Instance: When referring to instances of noncompliance, any situation, discovered through the audit process, that could result in a CMP as a result of untimely submission of a record.
  • ORM: Ongoing Responsibility of Medicals; RRE’s responsibility to pay, on an ongoing basis, for a Medicare beneficiary’s medical case associated with a claim.
  • Other Operative Dates: When referring to prospectivity of the rule, other operative dates would be things like “funding delayed beyond TPOC” date.
  • TPOC: Total Payment Obligation to Claimant; Dollar amount of a settlement, judgment, award, or other payment in addition to, or distinct from, ORM; generally, a one-time lump-sum amount to an injured party to resolve a payment obligation.
• TPOC Compliant Reporting MUST occur within 1 year (365 calendar days) of the settlement date reported in Field 80 or the Funding Beyond TPOC Date reported in Field 82, whichever is later.
• ORM Compliant Reporting MUST occur within 1 year (365 calendar days) of the MSP effective Date and ORM selected as Yes.
• Note: A record must be reported AND accepted for it to meet the requirement for timeliness.
• Audit Process:
  • CMS will make all substantive decisions on CMPs.
  • Informal Notice Process:
    • Notice letter is emailed to Authorized Representative and cc to Account Manager
    • 30 calendar days to provide mitigating factors
  • Formal Notice Process:
    • Sent via Certified Mail to the Authorized Representative
    • Formal regulatory appeals process applies
• Safe Harbors per CMS’s Presentation:
  

  A CMP will NOT be imposed when:

  Noncompliance is beyond the RRE’s control. (Ex.- Existing policy timeframes for a claimant to report an incident.)

  ORM is in dispute (with evidence supporting a late report).

  CMS changes the reporting requirements and/or process without adequate notice (minimum 6• month advance notice).

  • • Documented Evidence of a Beneficiary’s failure to provide SSN/HICN must include the following:
      • Once in writing (email is acceptable)
      • Once by mail (Email is not acceptable; Certified Mail is acceptable)
      • Once by phone or any other reasonable method
• Tiered Calculation Approach for CMPs:
  

  Timeframe	Penalty Amount per Day per NGHP Record
  > 1 year but < 2 years	$250
  > 2 years but < 3 years	$500
  > 3 years	$1,000
  Total Penalty for any 1 instance of noncompliance = NTE $365,000

• Maximum Penalty Clarified:
  • There is a maximum penalty of $365,000 per instance/record and this is subject to inflation adjustments by regulation annually.
  • This is not a per RRE cap.
  • Current 2024 Inflation Adjusted Rates:
    • $1,000/day = $1,428/day or a max penalty of $521,220
    • $500/day = $714/day
    • $250/day = $357/day
• Statute of Limitations:
  • • 5 years, as codified in 28 USC 2462
• What’s Next:
  • • CMS indicated that they will be promulgating an updated user guide in the near future which will contain specifics related to the CMP process.
    • Questions and comments specific to CMPs can be provided to sec111cmp@cms.hhs.gov

CMS has announced that it will be hosting a webinar on November 13^th, 2023, regarding a coming expansion to Section 111 reporting. Specifically, the announcement indicates that expansion will involve expanding TPOC reporting to include WCMSA information. The webinar will include a presentation by CMS providing general information and timelines, and should also permit for Q&A.

While the alert regarding the webinar can be found here – Change to Section 111 Workers’ Compensation Reporting Webinar Announcement (cms.gov); the relevant meeting information for the webinar is:

Date: November 13, 2023

Time: 1:00 PM ET

Webinar Link: htps://cms.zoomgov.com/j/1606789743?pwd=VzZ0Uk96ZWs1NUUvbm5xUnpJU2l4Zz09

Passcode: 100553

Or to connect via phone:

Conference Dial In: 1-833-568-8864

Conference Passcode: 160 678 9743

Separately, on Tuesday, October 17^th CMS published the annual list of valid ICD-10 and ICD-9 codes for Section 111 reporting, including the excluded liability and no-fault codes for 2024. The full lists of codes, broken down by valid and excluded, can be found here – ICD Code Lists | CMS. For clarity, not all ICD-10 and ICD-9 codes are accepted for Section 111 reporting purposes. Some codes have been determined by CMS to be either not descriptive of injury (i.e., they describe a cause of an injury and not the injury itself), or they have been determined to not provide enough detail related to the nature of an injury in order to be complete, useful, and adequate for Section 111. These annual lists are crucial to ensure that you are only reporting accepted codes via your Section 111 reporting program.

For questions about these updates, as well as general inquiries about Section 111 reporting and all things Medicare Secondary Payer, please contact us at info@allankoba.com.

CMS has finalized what will arguably be the most significant rulemaking the Medicare Secondary Payer industry has ever had. The final rule specifies how and when Group Health Plan and Non-Group Health Plan reporting entities will be penalized civilly for failure to comply with Section 111 reporting requirements. A high-level outline of the highlights of this rule as it applies to Non-Group Health Plans (NGHPs) and the impact to the carrier community can be found below. To read the full text of the final rule, click here.

To discuss this rule in more detail with a member of the Allan Koba Compliance Section 111 Reporting Team, please email info@allankoba.com and we will be happy to schedule a meeting.

Overview of the Final Rule on Section 111 Civil Monetary Penalties (CMPs) for NGHPs:

Commencing October 2, 2023, the new maximum settlement amount for the Fixed Percentage Option (FPO) will be $10,000. This is double the current maximum settlement amount for the FPO of $5,000.

The function of a FPO in Medicare conditional payments cases is that it streamlines the process for handling monies owed to Medicare. When a liability or workers’ compensation case settles and certain criteria is met, the beneficiary, the beneficiary’s attorney, or other representative can make a request that a Medicare conditional payments lien be calculated using the FPO. When electing to proceed with the FPO, Medicare’s recovery claim can be resolved by paying Medicare 25% of the gross total settlement, as opposed to utilizing the traditional Medicare conditional payments recovery process. Please note the gross settlement is not reduced for attorney’s fees and costs. By electing to use the FPO and pay Medicare 25% of the gross total settlement, this simplifies the Medicare conditional payments process and saves the parties’ time and resources.

Pursuant to the Centers for Medicare and Medicaid Services (CMS), to qualify for the FPO, all the following criteria must be met:

1. Your liability insurance (including self-insurance) settlement, judgment, award or other payment is related to an alleged physical trauma-based incident;
2. The total settlement is for $10,000 or less effective as of October 2, 2023 (a change from the current $5,000 threshold);
3. You elect the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident; and
4. You have not received and do not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

A written request for a FPO must be made to CMS. Upon receipt of the written request, CMS will decide whether the FPO will be allowed within 30 days. If the request for FPO is approved, payment must be made to CMS by a date certain that will be indicated on the approval letter. If the request for FPO is not approved, the parties will need to handle Medicare conditional payments via the traditional recovery process. It is important to note that if a FPO is elected, the beneficiary may not subsequently seek an appeal.

For questions about these updates, as well as general inquiries about Section 111 reporting and all things Medicare Secondary Payer, please contact us at info@allankoba.com.

CMS has continued the recent onslaught of Section 111 Reporting updates with the release of the latest iteration of the Non-Group Health Plan User Guide – Version 7.3. Given other recent updates, alerts, and townhall conferences held, this does not come as a surprise. Version 7.3 contains three main revisions:

First, and arguably the most significant, Ch. III has been updated to attempt to add some detail to the section on Ongoing Responsibility for Medical (ORM) reporting – Section 6.3. These changes aim to clarify what triggers ORM. In a prior update, this section was expanded, adding a conjunctive, 2-part test for the trigger of ORM. That is, in Version 7.2, the trigger for ORM was the assumption of ORM by the RRE AND the beneficiary receiving medical treatment for the related injury. This update caused questions from our industry, including how and when an RRE should know about medical treatment. In response to these questions, the agency has released the updates of Version 7.3 which has removed use of the word “and”, applying a new definition which now states that the trigger for ORM reporting is the determination to assume ORM which is when the RRE learns, through normal due diligence, that the beneficiary has received claim-related treatment.

These changes to the text effectively remove the decision-making power from the RRE to decide when ORM has been accepted, and has defined acceptance as knowledge of claim-related treatment. That surely cannot be the intent of CMS here and I anticipate additional updates to follow. As an example, under this text, an RRE would be assuming ORM if they learn of treatment, through normal due diligence, in a denied claim. A case in which ORM would normally not be reported.

For comparison, the language of Section 6.3 now reads as follows:

Second, Ch. IV has been updated to inform users who have opted into the unsolicited response file process that they may receive an empty file if no updates were made to their records in a given reporting period. That is, if an RRE has opted to receive the unsolicited response file, it will still receive a blank response file if no updates have been made by outside parties that would/should be contained therein. While the issuance of empty unsolicited response files was previously announced via an Alert last month, the fact that an empty file may be received is now outlined in Ch. IV, Sect. 7.5 for future reference.

Finally, so long, Internet Explorer. Chapters I, II, and IV have been revised to remove all references to Internet Explorer as it is no longer a supported browser. While this update likely does not make too many waves, it may be of interest to some carriers utilizing a reporting software that was designed for IE.

Each chapter of the updated User Guide, Version 7.3 is available for download here – https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/mandatory-insurer-reporting-for-non-group-health-plans/nghp-user-guide/nghp-user-guide.

For questions about these updates, as well as general inquiries about Section 111 reporting and all things Medicare Secondary Payer, please contact us at info@allankoba.com.