Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111) adds mandatory reporting requirements 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.

See the Overview of MIR and MSP for a discussion of the difference between the two CMS statues.

Group Health Insurance (GHP)

GHP plans include Health Savings Accounts (HRAs) must report; however, HRAs with coverage that is less than $5,000 per annum are are exempt (2012).

Non-Group Health Insurance (NGHP) - Liability, No-Fault and Workers Compensation

The goal behind NGHP reporting is to give CMS some of the lift to post-pay savings they achieved through the pre-pay GHP VDSA processes. NGHP reporting is conceptually the same -- insurers willl report cases quarterly via electronic submission, but the details of the reporting requirements are much different.  Insurers must report payment, judgment or award  that occured in the last reporting period.  If there is ongoing responsibility for paying, then the original report must be followed by an update when the obligation ends.  Updates are also required for CMS designated data elements such as updating injury information.  CMS also requires insurers to report any ongoing responsibility that existed as of 1 January 2009 in their first report.  Workers Compensation Medical Set Asides (WCMSA) are not included in MMSEA.

Self-Insured Entities Must Report...

Group Health Plan

Sec. 1862. [42 U.S.C. 1395y (7) (A) requires "...group health plan that is self-insured and self-administered, a plan administrator or fiduciary..." must report

Liability (including No-Fault) Plan

42 U.S.C. 1395y(b)(2)(A) provides that an entity that engages in a business, trade or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part. Self-insurance or deemed self-insurance can be demonstrated by a settlement, judgment, award, or other payment to satisfy an alleged claim (including any deductible or co-pay on a liability insurance, no-fault insurance, or workers’ compensation law or plan) for a business, trade or profession.

Workers' Compensation Plan

42 U.S.C. 1395y(b)(8), a workers’ compensation law or plan means a law or program administered by a State (defined to include commonwealths, territories and possessions of the United States) or the United States to provide compensation to workers for work-related injuries and/or illnesses. The term includes a similar compensation plan established by an employer that is funded by such employer directly or indirectly through an insurer to provide compensation to a worker of such employer for a work-related injury or illness. Where such a plan is directly funded by the employer, the employer has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(8). Where such a plan is indirectly funded by the employer, the insurer has the responsibility for the reporting requirements at 42 U.S.C. 1395y(b)(8).

Reporting Requirements for Self-Insured Plans

The following information is provided to address reporting issues for some common self-insurance arrangements.

Group Health Plans (ERISA)

For Taft-Hartley, Single Employer Welfare Arrangements, Multi-Employer Welfare Arrangements (MEWA) and Multiple Employer Welfare Plans, the fiduciary is responsible for reporting.

To accomodate plans in which an employee routinely work for multiple employers during a single reporting period (or other plans using an “hours bank” arrangement), RREs should submit the plan sponsor TIN rather than the actual employer TIN in the Employer TIN (Field 21) of the MSP Input File record.

Non-Group Health Plans

Single Captive

In situations where an entity carries its own risk through (1) a separate legal entity (captive), formed by the company and (2) the captive has full responsibility to resolve claims using their funds (3) without involvement of the participating entity, the captive is the responsible reporting entity.

Group Captive, Risk Retention group and Pools

Entities self-insured in whole or in part with respect to liability may elect, where permitted by law, to join with other similarly situated entities in a self-insurance pool or trust (e.g., joint powers authority). If the self-insurance pool or trust (1) is a separate legal entity (2) with full responsibility to resolve and pay claims using pool funds (3) without involvement of the participating entities, the self-insurance pool or trust is the responsible reporting entity. If all three aforementioned characteristics are not applicable to the self-insurance pool or trust, the participating self-insured entity is the responsible reporting entity.

Exception: Where the statute authorizing the establishment of a self-insurance pool stipulates that said self-insurance pool shall be licensed and regulated in the same manner as liability insurance (or workers’ compensation, where applicable), then the self-insurance pool is the RRE. Absent meeting this exception, unless all three of the characteristics specified under the preceding bullet apply to the self-insurance pool, the participating self-insured entity is the RRE.

Fronting insurers

For workers' compensation in the U.S., a captive often must go through a fronting process. The fronting insurer issues the required policy using its insurance licenses and then the company "cedes" some or all the risk and some of the premium to the captive. If there is a loss, the captive provides the funding to pay the loss even though the contractually responsible party from the injured party’s perspective is the commercial "front".

The intent with “fronting” policies is that the insurer will not ultimately retain any risk under the insurance policy. The expectation of both the insured and the insurer is that the insured will retain the ultimate risk under the insurance policy for all claims. Where the insured pays the claim, the insured is the RRE. Where the insurer pays the claim, the insurer is the RRE.

Workers' Compensation

  • Where the applicable law or plan authorizes an employer to purchase insurance from an insurance carrier and the employer does so, the insurance carrier is the RRE.
  • Where the applicable law or plan authorizes an employer to self-insure and the employer does so independently of other employers, the self-insuring employer is the RRE.
  • Where the applicable law or plan authorizes employers to join with other employers in self-insurance pools (e.g., joint powers authorities) and the self-insurance pool (1) is a separate legal entity (2) with full responsibility to resolve and pay claims using pool funds (3) without involvement of the participating employer, the self-insurance pool is the RRE.
  • Where the applicable law or plan authorizes employers to join with other employers in self-insurance pools but any of the above delineated requirements are not satisfied, the participating employer is the RRE.
  • Where the applicable law or plan establishes a State/Federal agency with sole responsibility to resolve and pay claims, the established agency is the RRE.
  • Applicable law or plan authorizes employers to self-insure or to purchase insurance from an insurance carrier and also establishes a State/Federal agency to assume responsibility for situations where the employer fails to obtain insurance or to properly self-insure (1) Where such State/Federal agency itself resolves and pays the claims using State/Federal funds or funds obtained from others for this purpose, the established agency is the RRE. (2) Where such State/Federal agency designates an authorized insurance carrier to resolve and pay the claim using State/Federal-provided funds but State/Federal agency retains review or approval authority, the State/Federal agency is the RRE.(3) Where such State/Federal agency designates an authorized insurance carrier to resolve and pay the claim using State/Federal-provided funds without State/Federal agency review and/or approval, the designated carrier is the RRE.

Excess Insurers

Excess Insurance is used by some in the industry to refer to a second level of coverage for self-insured entities' Self-Insured Rentention -- often provided by a pool or captive.  The term used in this context is not "reinsurance" as the excess insurer does not reimburse the self-insured entity.  It pays the claim directly to the claimant for claims over a specified value or aggregate loss.  In these situations the "Excess Insurer" is an RRE.

Reinsurance

If the Re-insurer reimburses the pool or captive for a single claim or aggregate loss, then the re-insurer is not an RRE.

Subrogation

If an insurer reimburses an insurance plan that paid the claim, then the responsible reporting party is still the insurer that paid the claim.

When a Captive or Pool Member must Report ...

Employer members that participate in an self-insured plan (e.g., self administered plan or group captive), which pays the entire claim, then the plan is responsible for reporting.  If the member pays some, or all, of the claim from a source other than such an insurance plan, or trust, then the member must report payment.  For instance, if a pool member has a Self-Insured Retention (SIR) for which they are directly responsible for paying claims up to the value of the SIR  then the member is an RRE and must report.

If the member pays a "deductible" to the plan and the plan pays the claimant, then the plan is the responsible reporting entity.

In general, whomever has the fudiciary responsibility to "cut a check" to the claimant is the responsible reporting entity.

Compliance

There are at least two aspects to compliance: providing the required data elements and reporting in a timely and accurate fashion.  Penalties for failing to report in a timely manner are stiff: $1,000.00 per day per Medicare Beneficiary.

CMS has provided additional time for insurers to gather some required data (e.g., Employer Identification Number (EIN) and Social Security Numbers (SSNs) of beneficiary family members), but they will become required with each submission.

Reporting Agen

Piatt Consulting's  Medicare Consul Services is a cost-effective, one-stop reporting solution to do your own reporting or engage us as your reporting agen. Self-insured entities and mainstream insurers will benefit from a tiered pricing structure that provides an inexpensive solution for reporting just a few, or millions of Medicare beneficiaries.

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