By Bridget Smith, Sr. Vice President, National Accounts and Settlement Consulting, IMPAXX
As I described in the first part of this two-part series, Medicare compliance in 2023 was heavily shaped by the release of the Section 111 Civil Money Penalties final rule. But Section 111 updates from CMS did not end there. In mid-November, CMS hosted a webinar and discussed expanding reporting requirements to include information about Workers’ Compensation Medicare Set-Aside Allocations (WCMSAs). In part two, we will review this update and share Section 111 pitfalls to avoid and best practices going forward.
On November 13, 2023, CMS held a webinar to discuss the expansion of the Section 111 Total Payment Obligation to Claimant (TPOC) field to include Medicare Set-Aside (MSA) amounts, funding, and administration information. It should be noted that CMS will only require this information for workers’ compensation claims as there is currently no MSA review process for liability cases.
As a reminder, TPOC refers to the settlement of the medical portion of the claim or final judgment. Responsible Reporting Entities (RREs) are required to report the total settlement amount and date of settlement. CMS plans to include data on whether a WCMSA was prepared as part of the settlement, and would include the following information:
- The total amount of the WCMSA
- Period of years the MSA will cover (i.e., life expectancy)
- Whether the WCMSA will be paid in a lump sum or with a structured annuity
- If a structured annuity is utilized, the seed and annual deposit amounts
- If the WCMSA has been submitted, the CMS case control number
- The tax identification number for the professional administrator if one exists (not a required field)
Once CMS receives the data, a ‘W’ record will be posted in the Common Working File (CWF) to ensure that payment is not made by Medicare for medical services related to the injuries described by the diagnosis codes. Information should be reported for all WCMSAs regardless of whether they were submitted to CMS for review, and data should be submitted to CMS regardless of the TPOC value. While CMS noted repeatedly during the webinar that CMS submission is voluntary and is not required under the law, data would still need to be reported for the WCMSA. CMS plans to provide more information regarding these changes including the release of updated file layouts early in 2024, testing information in fall 2024, and anticipated implementation dates for this change in January 2025.
What to Do Now
Civil Money Penalties
Section 111 Reporting has been at the forefront of Medicare compliance in 2023. So, what can you do in 2024 to prepare for the changes ahead?
When it comes to Section 111 Reporting, nothing rings truer than the quote from Alexander Pope “A little knowledge is a dangerous thing,” As the devil is truly in the details when it comes to preventing potential penalties. Not understanding your total reporting program will inevitably lead to errors and mistakes. With that in mind, below are some of the most common Section 111 Reporting misconceptions and pitfalls.
- Because someone is reporting on my behalf, my Section 111 Reporting obligations have been met.
Reporting agents primarily transfer the data you provide to them to CMS for review. But, as the RRE, you are responsible for making sure that the information is correct and that the settlement amount, date of settlement, acceptance of medical, and diagnosis codes related to the claim are accurate.
- The lack of reporting errors means I am reporting correctly.
CMS will not tell you if you reported TPOC, ORM, ORM Termination, or diagnosis codes correctly, only if they are in the correct format for them to process. Failing to report, or reporting the wrong information, can lead to penalties and increased Medicare lien costs and is not easily determined when reviewing CMS response files.
- My claims are being reported to CMS.
You may think that your claims have been reported and processed by CMS, but unless someone is monitoring CMS response files for you and reviewing what has been reported and whether CMS has accepted the information, this may not be the case.
- My reporting agent will alert me if there are issues with my reporting.
Not necessarily. A good reporting agent will alert you if errors are preventing reporting, and if they see red flags in the reporting process, but some will not, which leaves the RRE to sift through countless amounts of data to try and determine if everything is running smoothly.
- When it comes to Section 111 Reporting no news is good news.
As an RRE, you want to receive updates regarding what has been reported and if it has been accepted by CMS. You also want to also be aware of any changes to Section 111 Reporting requirements and how those changes may impact your organization. In addition, you want to confirm that any staff who inputs the data sent to CMS receives regular, up-to-date, training on Section 111 Reporting.
What is the best way to prevent these pitfalls? First, one of the most important things you can do is understand your program and determine if there are issues that need to be addressed, which may require a Section 111 audit be conducted. Completing the audit yourself may not provide the most comprehensive insight into your program and conducting a thorough audit that delves into your claims and current procedures, and not just what data has been submitted to CMS, can prevent ongoing mistakes, and errors as well as reduce the risk of future penalties. While you do not need to audit every claim, a good sample is necessary to help determine compliance. An audit, if done correctly, can be an invaluable tool for an RRE.
Second, and equally important, find a good reporting partner. A reporting partner is more than just someone who reports to CMS on your behalf. A reporting partner is someone who alerts you about any issues with your data, helps you fix errors, provides transparency and feedback throughout the reporting process, and conducts training for your staff regarding any updates on CMS trends and changes. Reporting is a complicated process, which has become increasingly more complex in the last several years. Having a true partner is vital to helping you navigate through these complexities. If you are doing your reporting in-house, a reporting partner can still be an important asset to your compliance program by providing consulting services and ongoing support.
With respect to WCMSA reporting requirements, additional specifications will be rolled out in 2024. As such, there are some important things to do now in anticipation of these upcoming changes including:
- Capture necessary data and report it to CMS.
Reporting and claims systems need to capture the data needed and report it to CMS. Work with external or internal reporting partners to make sure they are keeping up with, and preparing for, these new requirements and confirm that all changes are made in a timely manner.
- Assess your current WCMSA program.
CMS has always stated that they will only review claims that meet the CMS review threshold. With these changes, RREs will be required to report if a WCMSA was completed on claims involving Medicare beneficiaries regardless of WCMSA review thresholds. If you have not completed allocations on these claims in the past, now is the time to consider obtaining a cost projection to properly address a claimant’s future medical care.
- Understand what is being reported for Zero-Dollar MSAs.
When it comes to zero-dollar WCMSA waivers, RREs need to confirm that ORM is not being reported or, if it is, that it is terminated and meets an exception that CMS will accept. Diagnosis codes reported should also match what is outlined in the WCMSA. It is unclear whether CMS will be reviewing all of this data when it comes to assessing zero waivers, but if and when they do, failing to properly report these claims could cause CMS to include these items in the allocation.
- Do not believe all the hype.
CMS has always said that submission of a WCMSA is voluntary, and with the release of Section 4.3 of the WCMSA Reference Guide, that fact did not change. CMS confirmed that a WCMSA must reasonably protect Medicare’s interest and the claimant must utilize MSA funds appropriately. CMS also noted during the November 2023 webinar that the purpose of expanding TPOC to include WCMSA information was to prevent CMS from paying for claims where there is a WCMSA in play (they also confirmed that WCMSA review is still voluntary). This change will allow for all WCMSAs, whether submitted or not submitted to CMS, to be accounted for which is a welcome change and in no way signals that non-submit MSAs are no longer valid.
- Review your current administration strategy.
Although CMS stated that professional administration information will not be a required field, administration plays a key role in ensuring that WCMSA funds are not exhausted prematurely. Review your current administration strategy to determine if the program you have allows for savings to the claimant post-settlement. In addition, if professional administration is utilized, determine if it will only last for a few years leaving the claimant to self-administer the WCMSA funds for the remainder of the claim. This can create issues post-settlement, not only for the claimant, but for all parties involved in the claim.
The Year Ahead
Change is inevitable, and even though CMS is not quick to make sweeping changes, they made quite a few in 2023. Getting ahead of these changes and being proactive is the best way to remain compliant in 2024. The penalty clock does not start ticking until October 2024, and the expansion of TPOC will not occur until January 2025, which gives you some time to refresh and regroup.
In sum, your compliance goal for the year ahead when it comes to Section 111 is to make sure everything matches up:
- Your reporting matches the claim
- Data is being submitted to CMS and accepted
- WCMSAs reflect the correct diagnosis codes as reported to CMS and are addressed as part of the claim
- Your settlement documents are consistent with dates of injury reported, diagnosis codes reported, settlement amounts, and ORM Termination and TPOC dates
This straight-line approach will keep you on the right track going forward in 2024 and beyond.
About Bridget Smith, JD, MSCC, CMSP
Bridget has over 20 years of experience as a former practicing attorney and partner focusing on workers’ compensation, general liability, and Medicare compliance law. She collaborates with customers to develop Medicare compliance programs and procedures and to successfully navigate Medicare Secondary Payer issues. Bridget is a co-chair of the podcast committee for the MSP Network and is part of the MARC Coalition serving on the Allocation/MSA work group. She is also an industry thought leader and author who presents regularly at conferences nationwide. Bridget has a Bachelor of Arts degree from Gannon University and Master of Arts and Juris Doctor degrees from Duquesne University.
From Section 111 Reporting, Medicare-Set Asides, Cost Projections, and Structured Settlements to MSA Administration, Lien Resolution, and Settlement Consulting, IMPAXX offers a comprehensive suite of innovative products and services to help you effectively navigate the constantly changing Medicare Secondary Payer (MSP) landscape. IMPAXX is one of the nation’s largest Medicare Set-Aside solution providers, and our dedicated and knowledgeable team of professionals use their decades of experience, extensive industry knowledge, and sophisticated understanding of Medicare Secondary Payer requirements, to create solutions tailored to your unique needs.
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