Assuming and Terminating Ongoing Responsibility for Medicals: When, What to Report in Section 111

Introduction

In 2007, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory insurer reporting (MIR) requirements to the Medicare Secondary Payer (MSP) Act at 42 USC Section 1395y(b)(8) with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance, or workers’ compensation, collectively referred to as Non-Group Health Plan (NGHP).

The purpose of the Section 111 MSP reporting process is to enable the Centers for Medicare and Medicaid Services (CMS) to pay appropriately for Medicare covered items and services furnished to Medicare beneficiaries. Section 111 reporting helps CMS determine primary versus secondary payer responsibility—that is, which health insurer pays first and which pays second. To further clarify requirements under the law, CMS provides a more detailed explanation of Section 111 related legislation, MSP rules, and the structure of the Section 111 reporting process in its NGHP Mandatory Reporting User Guide.

Entities responsible for complying with Section 111 are referred to as Responsible Reporting Entities (RREs). Section 111 requires RREs to submit “information specified by the Secretary of Health and Human Services (HHS) in a form and manner (including frequency) specified by the Secretary.” The Secretary requires data for both Medicare claims processing and for MSP recovery actions, where applicable. For Section 111 reporting, RREs are required to submit information electronically on liability insurance (including self- insurance), no-fault insurance, and workers’ compensation claims, where the injured party is a Medicare beneficiary. The actual data submission process takes place between the RREs, or their designated reporting agents, and the CMS Benefits Coordination & Recovery Center (BCRC). The BCRC manages the technical aspects of the Section 111 data submission process for all Section 111 RREs.

RREs must be able to determine whether an injured party is a Medicare beneficiary and gather the information required for Section 111 reporting. In order to do so, CMS allows RREs to submit a query to the BCRC to determine the Medicare status of the injured party prior to submitting claim information for Section 111 reporting. The query record must contain the injured party’s Social Security Number (SSN) or Medicare ID or Health Insurance Claim Number (HICN) or Medicare Beneficiary Identifier (MBI), name, date of birth and gender.

RREs may choose to submit claim information through either an electronic file exchange, OR a manual direct data entry (DDE) process using the Section 111 secured website. When the BCRC has cleared an RRE for “production” input file submissions, the RRE will submit claim information for all no-fault insurance, and workers’ compensation claims involving a Medicare beneficiary as the injured party where the Total Payment Obligation to Claimant (TPOC) date for the settlement, judgment, award, or other payment date is October 1, 2010, or subsequent. Information is also to be submitted for all liability insurance (including self-insurance) claims involving a Medicare beneficiary as the injured party where the TPOC Date for the settlement, judgment, award, or other payment date is October 1, 2011, or subsequent.

In addition, RREs must submit information related to no-fault insurance, workers’ compensation, and liability insurance (including self-insurance) claims for which ongoing responsibility for medical (ORM) payments exists as of January 1, 2010 and subsequent, regardless of the date of an initial acceptance of payment responsibility. Reporting ORM has been a difficult component of MIR for no-fault insurance and workers’ compensation plans. Situations in which months, if not years, have gone by without a payment, but the law applicable to a particular state indicates ongoing responsibility for medical, has made it a very challenging, confusing, and expensive component of MIR compliance. This article discusses the June 2021 ORM changes announced in the MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No-Fault Insurance, and Workers’ Compensation USER GUIDE, Version 6.4.

Assumption of ORM

As already indicated, one of the requirements of MIR is the reporting of the assumption or establishment of ORM for no-fault insurance, liability insurance (including self-insurance), and workers’ compensation plans.

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 often applies to no-fault and workers’ compensation claims, but may occur in some circumstances with 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. Medical payments do not actually have to be paid for ORM reporting to be required. The dollar amounts for ORM are not reported, just the fact that ORM exists or existed.

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. Payments like these are not reported individually under Section 111 as TPOCs. Even when ORM payments are aggregated and paid to a provider or injured party in a single payment, this aggregation does not constitute a TPOC just because it was paid in a “lump sum”.

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. However, workers’ compensation ORM claims are excluded from reporting indefinitely if they meet all following criteria:

• The claim is for “medicals only;” and
• 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); and
• All payment(s) has/have been made directly to the medical provider; and
• Total payment for medicals does not exceed $750.00

Termination of ORM

Reporting for 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. When ORM ends (a no-fault limit is reached, TPOC is reached, or the RRE no longer has ORM, etc.), the RRE reports an ORM Termination Date (date when ongoing responsibility for medicals has ended) and, if a no-fault case, the date the no-fault policy limit was exhausted (if applicable). A value of “Y” in the ORM Indicator means that the claim includes or included ORM. To turn ORM “off” as of a certain date, the RRE sends an ORM Termination Date on an update record, but leaves the ORM Indicator set to “Y”. This will indicate that the RRE had ORM from the date of the incident through the ORM Termination date.

With respect to ORM, a determination that a case is “closed” or otherwise inactive does not automatically equate to a report terminating the ORM. One of the major problems encountered with this CMS policy is that if the ORM is subject to reopening or otherwise subject to a further request for payment, the record submitted for ORM had to remain open. Similarly, if a file would otherwise be “closed” due to a “return to work” or “no additional anticipated medicals,” a report terminating the ORM could not be submitted as long as the ORM was subject to reopening or otherwise subject to an additional request for payment.

For many years now this has meant that certain states, which require a workers’ compensation or no-fault claim be left open for medicals indefinitely, could never terminate ORM. In addition, since RREs were not able to submit an expected, anticipated, or contingent ORM Termination Date because ORM Termination Dates could only be submitted when the termination of ORM was certain, these claims kept ORM open for 10, 15, 20 years, while the file laid dormant with the RRE or payer.

After several years of communicating such frustration to CMS, the User Guide was amended earlier this year to include future-dated ORM Termination Dates to be allowed. As a result, RREs can now report a future ORM termination date no more than 75 years from the date of reporting. In addition, CMS created a limited “Special Exception” regarding reporting termination of ORM.

“Assumption of ORM typically occurs with respect to no-fault insurance or workers’ compensation claims. Because this may involve all levels of injury, the old rule could result in the continuation of open ORM records even where, as a practical matter, there is no possibility of associated future treatment. An example might be a relatively minor fully healed flesh wound that occurred in a State where workers’ compensation requires life-time medicals. To address this situation, RREs may submit a termination date for ORM if they have a signed statement from the injured individual’s treating physician that the individual will require no further medical items or services associated with the claim/claimed injuries, regardless of the fact that the claim may be subject to reopening or otherwise subject to a claim for further payment.”

Latest Changes in ORM Termination

Stakeholders, especially no-fault and workers compensation RREs, continued to vocalize frustration with CMS’ long term, open-ended ORM acceptance policy. As a result, on June 11, 2021, CMS again revised its ORM termination policy. Although the changes continue to indicate that an ORM termination date should not be submitted as long as the ORM is subject to reopening or otherwise subject to an additional request for payment, the amended User Guide now permits an ORM termination date to be submitted if one of the following criteria has been met:

• “Where there is no practical likelihood of associated future medical treatment, an RRE may submit a termination date for ORM if it maintains a statement (hard copy or electronic) signed by the beneficiary’s treating physician that no additional medical items and/or services associated with the claimed injuries will be required;”
• “Where there is no practical likelihood of associated future medical treatment, which is reflected by meeting ALL of the following:”
• “No claims were paid with any diagnoses codes related to alleged ingestion, implantation, or exposure;” and
• “No claims were paid, for any medical item or service related to the case, within five (5) years of the date of service of any such claim;” and
• “Treatment did not include, nor were any claims paid related to, a medical implantation or prosthetic device;” and
• “The total amount paid by the insurer, for all medical claims related to the case, did not exceed $25,000.”
• “Where the insurer’s responsibility for ORM has been terminated under applicable state law associated with the insurance contract;”
• “Where the insurer’s responsibility for ORM has been terminated per the terms of the pertinent insurance contract, such as maximum coverage benefits.”

Conclusion

Finally, after years of communicating the difficulty of CMS’ open-ended ORM termination policy in liability, no-fault, and workers compensation claims, changes were made to the ORM Termination Date that make sense to the payer community. As of June 2021, RREs which accepted ORM, but have not settled the file, will be able to terminate ORM if it has documentation from the claimant’s treating physician that no future medical care related to the claim will be required, or the facts of the case warrant a conclusion that there is no practical likelihood of future medical care related to the claim, or where state law indicates no responsibility for ORM, or where by contract such responsibility for ORM has been terminated.

By Rafael Gonzalez, Esq.

Rafael is a partner in Cattie & Gonzalez, PLLC, a national law firm focusing its practice on federal Medicare/Medicaid secondary payer compliance and legal issues. In addition to assisting clients with Medicare mandatory reporting, conditional payments, and set asides issues, he helps clients with Medicaid third party liability liens and Medicaid special needs trusts issues. He has over 35 years experience in the liability, no-fault, and work comp insurance industry. You can connect with him on LinkedIn, Twitter, Facebook, and YouTube, or reach him at rgonzalez@cattielaw.com, 844.546.3500, or www.cattielaw.com.

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