Overview: This article addresses mandatory Section 111 reporting obligations for Non-Group Health Plans such as insurers and self-insureds. The article does not address Section 111 reporting obligations for Group Health Plans.
As we work through the new realm of “normal” in light of Covid-19, many things about our practices have changed. Several legal requirements, especially in the health care industry, have been relaxed. Most trials have been continued and most deadlines extended. However, at least one thing remains constant: The Medicare Secondary Payer Act and Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA or Section 111). The rules on reimbursing Medicare (and Medicare Advantage Organizations) and submitting timely Section 111 reports have not changed. In fact, the Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule which addresses when and under what conditions it will issue Civil Monetary Penalties (CMPs) for failure to comply with the MMSEA. This article addresses the types of Section 111 reports, when Section 111 reports are required, and who is authorized to submit Section 111 reports. This article also provides an introduction to the CMS’ Notice of Proposed Rulemaking on Civil Monetary Penalties.
What is a Section 111 Report and When is it Required
Section 111 reports are electronic reports, submitted to the CMS though the CMS Section 111 Reporting Portal.1 The report may only be submitted by a Responsible Reporting Entity (RRE) (usually a defendant and/or its insurer) who has registered with the CMS to Section 111 report or by an entity or person designated as a reporting agent by the RRE (in its Section 111 Mandatory Reporting Profile Report). The purpose of Section 111 reporting is to ensure that Medicare properly coordinates benefits.2
There are two types of Section 111 reports: Total Payment Obligation to the Claimant (TPOC) and Ongoing Responsibility for Medicals (ORM). In some cases, reporting of both a TPOC and ORM is required.
The obligation under Section 111 to report a TPOC is triggered when there is a payment obligation to (or on behalf of) a Medicare eligible claimant who pled and/or released medical expenses, and RRE knows when the TPOC will be funded or disbursed to the individual or their representative.3 TPOCs usually arise as a result of a settlement or judgment. Risk management write-offs, gifts and vouchers also trigger a Section 111 reporting obligation when there is evidence, or a reasonable expectation, that the individual has sought or may seek medical treatment as a result of the underlying incident. The CMS User Guide has detailed guidance on the definition of a TPOC, the types of action that trigger reporting of a TPOC, and monetary reporting thresholds. Those details are not addressed in this article.4
Reporting ORM is required by the RRE where the claimant is Medicare eligible and the RRE (or its insurer who may be responsible for reporting) learns, through normal due diligence, that the beneficiary has received (or is receiving) medical treatment related to the injury or illness sustained. For those of you pondering: “What exactly does this mean,” think about workers’ compensation claims where the employer sometimes assumes liability (based upon a no-fault system) and pays incident-related ongoing medical expenses (thus the term ORM). As mentioned, the trigger for the Section 111 report is when the RRE learns, through normal due diligence, that the beneficiary has received (or is receiving) medical treatment related to the injury or illness sustained. This date is usually earlier than a TPOC. Reporting ORM requires some level of detail about the claim including a description of the injuries (for which the employer will pay associated medicals). However, a dollar amount is not required. The RRE indicates (in the portal) that it has assumed ORM. If (and when) ORM may be terminated, the employer is required to enter an ORM termination date. Reporting ORM and reporting the termination of ORM also assist CMS with coordinating benefits. There are limited exceptions to the requirement to report ORM. Those exceptions and additional details on reporting ORM are not addressed in this article.
CMS also considers mandatory medical payments (Med Pay) and/or personal injury protection (PIP) coverage as no-fault coverage. Defense counsel, claims managers, and in-house counsel should review applicable insurance policies for Med Pay and PIP provisions. When those provisions are triggered, an evaluation on whether (and when) a Section 111 report of ORM is required is prudent.
Civil Monetary Penalties
As of today, the CMS has not accessed an NGHP RRE with CMPs. However, on October 11, 2023, CMS published the long-awaited Final Rule which outlines the circumstances that warrant CMP's and the method for calculating CMPs. The proposed rule allowed CMPs for reporting inconsistencies and reporting errors that exceeded a certain threshold. The Final Rule clearly states that CMPs will only be imposed where Section 111 reports are ultimely. More detailed information on the Final Rule can be found here.
About the Author
Barrye Panepinto Miyagi is Partner at Taylor Porter and the Practice Group Leader for Taylor Porter’s Medicare Secondary Payer (MSP) Compliance Group. Barrye is certified by the Louisiana Association of Self Insured Employers (LASIE) as a MSP-Fellow and has worked in the MSP Compliance arena for over 15 years. Barrye handles all areas of MSP compliance. She has extensive experience in defending and resolving toxic tort claims. As a result of her background, she brings a unique perspective to MSP compliance.
Taylor Porter’s MSP Compliance Group counsels businesses and lawyers on MSP Best Practices. Their work includes drafting best practices and related documents, identifying and resolving the interests of Medicare and Medicare Advantage Plans in settlements and judgments, global lien resolution in complex, multi-plaintiff cases, Medicare Set Asides, Section 111 reporting, and Section 111 audits.
If you have questions about MSP compliance, please contact Barrye.
Please note this information is accurate as of the October 12, 2023 update of this article.
2This article addresses Section 111 reporting for Non Group Health Plans (NGHPs) (such as liability, workers’ compensation and no fault insurers, including self-insureds). Section 111 reporting is also required by Group Health Plans (GHPs).
3 CMS NGHP User Guide, Chapter III: Policy Guidance, Chapter 6: Responsible Reporting Entities, Section 6.5.1: What Claims Are Reportable? When Are Such Claims Reportable? The term “CMS NGHP User Guide” refers to the CMS MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No Fault Insurance, and Workers’ Compensation User Guide. CMS routinely updates the CMS NGHP User Guide. See https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/mandatory-insurer-reporting-for-non-group-health-plans/nghp-user-guide/nghp-user-guide.html (last visited October 12, 2023). CMS uses the term “injured party” broadly.
4 CMS NGHP User Guide.
https://www.cms.gov/medicare/coordination-of-benefits-and-recovery/mandatory-insurer-reporting-for-non-group-health-plans/nghp-user-guide/nghp-user-guide.html (last visited October 12, 2023).
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