CMS Clarifies Prior TPOC Alert in an Update to the NGHP User Guide

On December 20, 2021, the Centers for Medicare & Medicaid Services (CMS) updated the NGHP User Guide (Chapter III: Policy Guidance) to incorporate a prior Total Payment Obligation to Claimant (TPOC) alert into CMS’ formal policy guidance. CMS has established the following bright-line rule for timely reporting TPOCs: 

6.5.1.2 Timeliness of Reporting

NGHP TPOC settlements, judgments, awards, or other payments are reportable once the

following criteria are met: 

• The alleged injured/harmed individual to or on whose behalf payment will be made has been identified.
• The TPOC amount (the amount of the settlement, judgement, award, or other payment) for that individual has been determined.
• The RRE knows when the TPOC will be funded or disbursed to the individual or their representative(s).

RREs should retain documentation establishing when these criteria were or will be met. RREs should not report the TPOC until the RRE establishes when the TPOC will be funded or disbursed. In some situations, funding or disbursement of the TPOC may not occur until well after the TPOC Date. RREs may submit the date the TPOC will be funded or disbursed in the corresponding Funding Delayed Beyond TPOC Start Date field when they report the TPOC Date and TPOC Amount, but must do so if the TPOC Date and date of the funding of the TPOC are 30 days or more apart. 

Most notably, CMS now requires Responsible Reporting Entities (RREs) to populate the Funding Delayed Beyond TPOC Start Date (Field 82) if it is thirty (30) days or more apart from the TPOC Date (Field 80). 

Sanderson Firm Commentary: This update is recovery-driven, and CMS is attempting to curtail scenarios where it prematurely seeks conditional payment recoveries against primary payers who have not yet issued the final settlement proceeds to the injured beneficiary. By populating the Funding Delayed Beyond TPOC Start Date, RREs are effectively communicating that CMS must delay its recovery process until the settlement funds are disbursed to the beneficiary.

What are the practical implication for RREs? Let’s look at a hypothetical scenario: a Medicare beneficiary agrees to settle their workers’ compensation claim against an insurer, and the beneficiary executes a settlement agreement on January 1, 2022 for $50,000. The settlement is later approved by a court (via court order) on January 15, 2022. At the time of settlement, the insurer has not yet determined exactly when it will issue the $50,000 settlement payment to the beneficiary / beneficiary’s attorney.

Under the updated guidance, the TPOC Date is January 15, 2022, the TPOC Amount is $50,000, and the Funding Delayed Beyond TPOC Start Date is undetermined because the insurer has not determined the exact date upon which final payment will be issued. Practically speaking, this is likely to be a common occurrence. As such, to avoid scenarios where RREs issue final payment thirty (30) days or more after court approval and inadvertently forget to populate the Funding Delayed Beyond TPOC Start Date (thus exposing themselves to reporting penalties), we recommend that RREs always populate the Funding Delayed Beyond TPOC Start Date even if the RRE anticipates making payment within the thirty-day deadline.

Please contact us with any questions regarding the delayed funding policy update or any other MSP concerns.

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