The Medicare Secondary Payer Act (MSP) and Medicare’s Section 111 User Guide require a carrier/self-insured to report to Medicare, when appropriate:
- Ongoing Responsibility for Medical (ORM); OR
- Settlement, judgement, award or other payment
These requirements allow Medicare to perform three actions when presented with a medical payment that may be associated with a workers’ compensation, liability, or no-fault claim (also known as Non-Group Health Plan Claim – NGHP):
- Make payment and seek reimbursement from either the carrier/self-insured or claimant associated with the NGHP claim;
- Deny making payment and determine the charges should be paid for by the carrier/self-insured or from a settlement, judgment, award or other payment made to the claimant; or
- Make payment as primary payer.
These actions by Medicare can be challenged through an administrative process.
ORM signifies to Medicare that a carrier/self-insured has accepted responsibility for payable medical treatment for conditions associated with the NGHP. The Commercial Repayment Center (CRC) is responsible for searching and seeking reimbursement directly against the carrier/self-insured.
This means when a claims professional makes the change in the claim system from ORM from blank to “Y,” CRC will search the Medicare database for charges that may require reimbursement under the MSP. This search and collection is aimed directly against the carrier/self-insured.
Moreover, because of the nature of open medical rights, Medicare will setup additional cases and search for charges after a specified demand for payment. This is in part because the claimant may have continuing treatment, but also in part because a provider has at least 12 months from the date of service to bill Medicare.
Settlement, Judgement, Award or Other Payment Reporting
The Benefit Coordination and Recovery Center (BCRC) is responsible for search and collection based upon settlement, judgement award or other payment reporting (also known as “TPOC reporting”). In general, the BCRC’s process is to collect directly against the claimant’s settlement funds. This process is regardless of whether the carrier/self-insured has agreed to negotiate and/or reimburse conditional payments found as a part of settlement reporting.
This type of reporting signifies to Medicare that a payment has occurred between a Medicare beneficiary and a carrier/self-insured over responsibility for certain medical conditions.
Outside of the reporting requirements by the carrier/self-insured, Medicare may also be notified of settlement through submission of the settlement information to Medicare directly by mail or fax.
What this means is that outside of any ORM obligations, when a TPOC is reported to Medicare, the BCRC regularly will complete its own independent search for charges associated with the TPOC reporting.
This also means that cases involving ORM and TPOC may see searches and collection both from CRC and BCRC.
Since Medicare is using Section 111 reporting to drive its conditional payment collections, the quality of data being sent to Medicare by carriers/self-insureds will inevitably impact the search and collection by Medicare through ORM or TPOC reporting. Here are some examples:
- Vague injury descriptors can result in Medicare searching for more conditions than necessary:
- ICD10 F99: “Mental disorder, not otherwise specified”
- ICD9 724.5: Backache, unspecified
- Inputting conditions not accepted as ORM or a part of settlement will lead to Medicare searching for charges not a part of the claim.
What is also important to understand is that there are limits to Section 111 reporting that forces carriers/self-insured or beneficiaries to challenge Medicare’s collection through the administrative appeal process or face making payments for charges that do not require reimbursement.
- A carrier/self-insured may have accepted ORM, but also obtained a utilization review identifying that certain treatment is not reasonable and necessary to the workers’ compensation claim and therefore not payable under workers’ compensation law.
- There is no place for a carrier/self-insured to input utilization review information into Section 111 reporting. If Medicare makes payment for these treatments and asks for reimbursement against the carrier or claimant, the burden is on the carrier or claimant to demonstrate that there is no reasonable expectation of payment under the workers’ compensation claim and Medicare is primary payer in such a circumstance.
- Section 111 reporting does not allow parties to request conditional payment estimates prior to TPOC reporting, you must contact Medicare manually for an estimate based upon anticipated settlement.
Moreover, the Section 111 reporting process, does not notify a Medicare Advantage Plan (Medicare Part C) or Prescription Plan (Medicare Part D) of ORM or TPOC events. This means that if a claimant also has Medicare Part C or D benefits, these individual benefit providers need to be manually contacted and determine whether reimbursement will be requested.
Understanding the interplay of these circumstances on a particular claim allows the parties to identify and resolve any MSP lien or potential lien at or near the time of either ORM or TPOC reporting. Moreover, increasing the quality of data sent to Medicare assists Medicare in accurately finding appropriate charges that may require reimbursement.
If you are running into confusion over these interplays, it is important to resolve these issues through discussion with your internal MSP team or an outside consultant. This also reduces risks of unanticipated collection after settlement.
We will continue to keep you posted as the interplay between Section 111 reporting and conditional payments evolves.