It s More than Just Section 111 Reporting

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Dorcas Skinner
5 years ago
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1 It s More than Just Section 111 Reporting By Mark Popolizio Section 111 reporting is not just an abstract technical Medicare compliance obligation. Although at its core it has been an IT function involving the electronic transmission of data to Medicare, in the last few years the situation has dramatically changed. Specifically, the Centers for Medicare and Medicaid Services (CMS) is now using the Commercial Repayment Center (CRC) to pursue conditional payment recovery against claims payers when they have accepted On-going Responsibility for Medicals (ORM) under Section 111. In short, filing an ORM report under Section 111 is triggering CRC s recovery activities and Medicare is now seeking recovery before claim settlement in ORM situations. Through this new policy, CMS has taken a giant step toward achieving the main objective behind Section 111 reporting: using Section 111 data and information to better coordinate its secondary payer recovery activities. It is absolutely critical to recognize the direct downstream impact CMS increased coordination between Section 111 reporting and recovery has in terms of compliance obligations and potential liability. Under Section 111, the Responsible Reporting Entity (RRE) has complete responsibility for reporting claims properly, subject to a potential penalty of up to $1,000 per day, per claim for non-compliance. Similarly, under CMS new CRC policy, the claims payer is viewed as the sole debtor before settlement in ORM situations regarding conditional payment reimbursement. These realities underscore why claims need solid programs for both reporting and recovery as these activities increasingly become sides of the same coin. In addition to potential penalties, errors in Section 111 reporting can result in delays and increased costs, while imprecise or overly broad ORM reporting could create unintended exposure on the conditional payment side. Like fine tuning an old radio, getting the reporting right is crucial. 1

2 Potential downstream negative impacts The potential downstream impacts of Section 111 reporting involve several compliance areas as depicted in the following topical breakdowns: Section 111 compliance component: Query Failing to query Over-querying Not tracking Medicare beneficiaries returned from query Lack of data points No query stop logic No procedures in place to track positive beneficiaries returned from query Unknown which claimants are Medicare beneficiaries May have conditional payments accruing without knowledge Unable to report via Section 111 Potential exposure for fines and penalties May not prepare or submit MSA Potential for errant re-reporting Unanticipated conditional payment exposure MSP exposure may exist without any knowledge on the part of the RRE Compliance gaps Section 111 compliance component: ORM Incorrect ORM status ORM Y when should be N or N, when should be Y ORM status null Coordination of benefits and denial of payment issues Conditional payment exposure for otherwise unaccepted claims Subsequent unanticipated conditional payment exposure for accepted claims Not reporting ORM termination date Not inputting ORM termination date Conditional payment exposure beyond the time in which RRE is responsible May affect MSA administration Incorrect ORM termination date Inputting the incorrect ORM termination date in system Coordination and denial of benefits Conditional payment exposure 2

3 Section 111 compliance component: ORM Claims with ORM not tracked Insufficient processes in place User error Conditional payment exposure may exist without knowledge of primary payer MSA may not be prepared or submitted Section 111 compliance component: Total Payment Obligation to the Claimant (TPOC) Incorrect TPOC date Inputting incorrect date Conditional payment exposure Likely incorrect ORM termination date Incorrect TPOC amount Inputting incorrect amount Conditional payment exposure Incorrect demand amount Reporting medical payments as TPOC Incorrect understanding /process Conditional payment exposure multiple demands Incorrect demand amount Failure to report TPOC event Insufficient processes in place Failure to report Continued conditional payment exposure Likely no ORM termination MSA may not be prepared or submitted 3

4 Section 111 compliance component: International Classification of Diseases (ICD) Injury Codes Including unrelated codes Overreporting codes Conditional payment exposure Likely incorrect ORM termination date Excluding related codes Underreporting codes Proper conditional payments not reflected COB and denial of benefits Issues with MSA administration Misreporting NOINJ code Incorrectly reporting this code Proper conditional payments not reflected COB and denial of benefits Reporting errors and potential penalties Section 111 compliance component: Claim Information Incorrect date of incident (DOI) Increased conditional payment exposure by causing incorrect and/or duplicate correspondence to issue with incorrect charges COB and denial of benefits issues Omitting representative information Omission Lack of information Claimant s attorney may not receive conditional payment information 4

Going beyond Section 111 reporting: An integrated approach The critical nexus between Section 111 reporting, conditional payments, and claims outcomes makes it vital for claims payers to execute

5 Going beyond Section 111 reporting: An integrated approach The critical nexus between Section 111 reporting, conditional payments, and claims outcomes makes it vital for claims payers to execute properly on Medicare Secondary Payer (MSP) compliance. A big part of this involves moving away from traditional approaches that view each MSP compliance point as an independent obligation. While this may be technically correct from an academic standpoint, in reality, each separate compliance obligation builds upon and affects each other. This is becoming increasingly relevant as CMS better coordinates its processes. The reality is that the Section 111 process provides a tremendous opportunity for claims payers to build more holistic compliance approaches beyond simply reporting. The key is integrating Section 111 reporting with conditional payments into a unified process. By doing so, claims payers can establish a strong base point to ensure reporting obligations are met and conditional payments are being proactively addressed to reduce risk and costs. The current prevailing philosophy views each MSP compliance point as an independent obligation. While this is technically correct, there is tremendous opportunity to move away from a claim-by-claim approach and incorporate a holistic program. The key is to achieve a holistic compliance strategy focused on integrating MSP compliance points namely Section 111 reporting and conditional payments into a unified process. And soon, ISO ClaimSearch users will be able to use their existing ISO ClaimSearch CMS data entry process to receive robust reporting capabilities via MSP Navigator. This evolutionary enhancement offers a new and improved Section 111 platform with increased functionality to help claims payers meet all of their MSP compliance obligations while at the same time taking huge strides toward error-free reporting. About the Author Mark Popolizio is vice president of MSP compliance and policy for ISO Claims Partners and a nationally recognized authority on MSP compliance. Mark practiced insurance defense litigation for ten years concentrating in workers compensation and general liability. Since 2016, he has dedicated his practice exclusively to MSP compliance, working with insurers, self-insureds, third-party administrators, and other claims professionals in addressing MSP compliance issues. Mark is a featured presenter on MSP issues at national seminars and other industry events and has authored national articles on MSP matters. He is active with MARC, DRI, and NAMSAP. Mark graduated summa cum laude from Quinnipiac University with BS degrees in legal studies and sociology. He graduated from Nova Southeastern University School of Law in 1995 and is licensed to practice law in Florida and Connecticut ISO Claims Partners, Inc. Verisk Analytics, the Verisk Analytics logo, and ISO ClaimSearch are registered trademarks and Verisk and the Verisk logo are trademarks of Insurance Services Office, Inc. MSP Navigator is a registered trademark and ISO Claims Partners is a trademark of ISO Claims Partners, Inc. All other product or corporate names are trademarks or registered trademarks of their respective companies. ca18032 (04/18)

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