On Monday December 20th, the Centers for Medicare & Medicaid Services (CMS) released an updated Section 111 Non-Group Health Plan User Guide, clarifying two recent alerts. The new User Guide adjusts guidance for reporting settlements by clarifying when reported settlement information may be considered late and expanding the circumstances where the “Funding Delayed Beyond TPOC Start Date” field should be reported. Additionally, CMS clarified the situations where a no-fault policy limit should be updated.
Funding Delayed Beyond TPOC Start Date
The alert creates new guidance for the timeliness of a reported settlement (or, in CMS’ parlance “total payment obligation to the claimant” or TPOC). The updated policy is that responsible reporting entities (RREs) are to delay reporting until such time as “the RRE establishes when the TPOC will be funded or disbursed.” The Funding Delayed Beyond TPOC Start Date field should be populated with the date that the settlement will be funded / paid. While the “Funding Delayed” field may be populated whenever the settlement will not be paid on or about the same day as the TPOC, CMS’ new guidance is that the RRE “must do so if the TPOC Date and the date of funding of the TPOC are 30 days or more apart.”
In addition, the updated User Guide confirms that “timeliness of MMSEA Section 111 reporting for a particular Medicare beneficiary will be based upon the latter of the TPOC Date and the Funding Delayed Beyond TPOC Start Date.” CMS also adjusted the technical definition of “Funding Delayed Beyond TPOC Start Date” to remove the phrase “actual or estimated.” RREs are now to report the “date when the TPOC was funded or disbursed.”
Analyzing the Funding Delayed Beyond TPOC Start Date Adjustment
As we outlined last month, the November 3rd alert on this topic raised critical practical questions, including: How often does CMS really expect the Funding Delayed Beyond TPOC Start Date to be populated? Is the Funding Delayed Beyond TPOC Start Date now a situationally required field?
The short answer to these questions is now that Funding Delayed Beyond TPOC is required if the TPOC will be funded “30 or more” days after the date of the settlement. It is worth noting that the TPOC date has been long defined as “the date the payment obligation was established” and that TPOC date is typically either the date of the settlement agreement or the date that a judge approves the settlement. Payment will typically be made after the agreement or judicial approval, and now CMS is requiring that Funding Delayed Beyond TPOC Start Date be populated if payment is made thirty days after the settlement.
Given this new guidance, and in line with CMS’ assurance that “timeliness” of reporting will be judged on the later of TPOC or “Funding Delayed” date, it may be a wise best practice to delay population of Section 111 reporting information until such time as payment is made. Depending upon the type of claims and claims system(s) involved, it may also be a best practice to always report the Funding Delayed Beyond TPOC Start Date as the payment date.
No-Fault Policy Limit Updates
We also recently wrote about a late October alert concerning recommendations for updating the “No-Fault Policy Limit” Field. That alert provided a general admonition for RREs to update the policy limit field if the policy limit “needs to be corrected,” and to do so with an off-cycle report if necessary. The alert provided no rationale and was unusual in that it recommended an “off-cycle” report.
We subsequently learned that this alert was precipitated by some peculiarities involving Florida no fault. In our year-in-review webinar earlier this month, we explained that RREs handling no fault insurance in Florida and other similar states should pay attention to the alert, but the alert may be meaningless in other states. The User Guide narrows the scope of the guidance to align with ECS’ prior guidance, as follows: “In some states, depending on various factors associated with the incident being reported, no-fault policy limits may vary.”
Technical Adjustments
CMS made a number of technical adjustments, including two associated with the policies identified above. First, a Compliance Flag will now be returned if the TPOC Date or Funding Delayed Beyond TPOC Start Date is more than 135 days older than the File Receipt Date. Second, CMS reiterated that No-Fault Insurance Limit (Field 61) was now a field where any change to the previously reported value will require an update. A number of adjustments were also made as a result of the PAID Act.
Bottom Line
As one trusted observer reported to ECS this morning, “these updates further solidify that those alerts were all about recovery.” The “Funding Delayed” policy adjustment will result in later reporting of TPOCs, but with the trade-off that RREs will not be penalized provided that the date of the funding determination is properly reported. CMS no longer cares about the “actual or estimated” date of funding. The agency now requires the RRE to disclose the actual date when payment was made. This will confirm (for Medicare’s recovery contractor) that the claimant or attorney has a check in hand and is ready and able to pay any demand.
While we are pleased that CMS has created a bright line in response to the lack of clarity surrounding its November 3rd alert, we remain concerned that the tail is wagging the dog. Section 111 reporting imposes strict compliance rules across the entire property / casualty insurance industry. Adjustments to policy and/or the use or interpretation of fields should not be made on a whim, particularly where the stakes are so high. Over the last eight weeks, CMS has effectively re-written the rules on two fields and has in fact repurposed Funding Delayed Beyond TPOC Start Date from a little-used and often-misunderstood field into a vitally important field in terms of timely Section 111 reporting.
What’s Next
ECS recommends that companies re-assess training or confirm that they are ready to implement changes to their reporting behavior (if necessary). ECS will provide further updates and training, if needed. The MIR Service platform not only ensures compliance with Section 111 reporting accurately, completely, and timely, but also utilizes business intelligence and automated workflows to eliminate the threat of civil money penalties and Treasury offsets. Should you have any questions about any of these topics, or if you want to learn more about our tailored MSP compliance solutions contact us at 678-222-5454 or MIRService.Support@examworkscompliance.com