CMS Insurer Reporting Requirements Call for Fast, Thorough Action

In just a few months, new federal reporting mandates will take effect for insurers and payers to identify claimants who are eligible for Medicare benefits. With this short time frame, these liability and no-fault insurers and workers’ comp providers are struggling to establish and implement a technical solution that determines Medicare eligibility, captures new data fields and allows for accurate and timely electronic submissions to the Centers for Medicare & Medicaid Services (CMS).

“Some of the biggest challenges regarding the new CMS reporting requirements are capturing data fields that payers and insurers aren’t already capturing in their claims systems and deciding how or whether to modify their claims systems to incorporate that data,” according to Shawn Maloney, senior vice president, EDI Solutions, Ingenix.

Meeting the new requirements “could be costly and resource-intensive and impose a significant burden on ‘responsible reporting entities (RREs),’” said Sean St. Clair, senior consultant with Ingenix Consulting. “Although the federal mandate is a way for CMS to ensure that the Medicare Secondary Payer (MSP) statute is being enforced, that Medicare dollars are being spent wisely and that errors and fraud are reduced, compliance with the mandate is a pretty big undertaking for the affected entities.”

The new requirements clearly benefit CMS – they are expected to save the Medicare program an estimated $1.74 billion of inappropriately paid benefits per year¹– but they transfer the responsibility for determining if there is a primary source of payment other than Medicare away from CMS and to the private insurance industry.

New requirements call for new data

CMS issued the new requirements to implement the mandatory MSP provisions of Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111).  This section adds mandatory reporting for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance or workers’ compensation.²

As of July 1, CMS will begin collecting various data elements from RREs, which enable the agency to pay appropriately for Medicare-covered items and services furnished to Medicare beneficiaries by determining primary versus secondary payer responsibility.³

Under the MMSEA Section 111 provisions, RREs must: (1) determine whether a claimant is entitled to Medicare benefits; and, if so (2) report the identity of the claimant and provide information that would allow CMS to properly coordinate benefits “with respect to such insurance arrangements in the form and manner (including frequency)” as specified.⁴

Insurers start reporting information to CMS on a quarterly basis, according to St. Clair. The information to be submitted includes mandatory data (e.g., beneficiary name, address, birth date, type of insurance, policy and claim numbers); situational data (e.g., Social Security number, health insurance claim number and no-fault policy limits); and optional data (e.g., e-mail addresses and telephone numbers). “CMS will require more than 100 fields of information to be reported electronically so it can validate claimant information in its database,” he said.

Scope of reporting requirements

With registration, testing and implementation deadlines approaching, affected payers need to develop strategies for complying with the new requirements.

Reporting entities must register with CMS through the agency’s secure Web site between May 1 and June 30. The next step is determining when a report needs to be filed with CMS and how to file such reports. Insurers can find out who among those named in claims are eligible for Medicare or Medicaid by sending a query to CMS. This either can be done on a manual basis or be built into an electronic query function via electronic data interchange (EDI), according to Brandon Miller, vice president, product development for Ingenix.

This function may sound simple, Miller continued, “but even if a query results in a finding of non-eligibility, insurers must routinely monitor the situation for any changes that could alter that status,” he said. “A claim you queried a month ago could be a hit next month, so you have to be vigilant about re-checking or use an automated system that re-checks on a routine basis.”

System testing is scheduled to take place between July 1 and Dec. 31, 2009, with first production files required to be submitted beginning Jan. 1, 2010, based on a predetermined schedule set by the CMS Coordination of Benefits Contractor. (Note that RREs may begin submitting production files, on a predetermined schedule, beginning on Oct. 1, 2009, if they are ready.)

Strategy, compliance help can make a difference

Keeping up with CMS’ technical requirements and ongoing changes while trying to develop strategies and implement programs can be more than a full-time job. For example, although CMS issued a user guide on March 16 to help entities better understand their responsibilities under the requirements, that document was 180 pages long. On March 20, a supplemental document was issued making minor modifications and explaining reporting thresholds that had not been previously published.

Because a number of affected entities have never dealt with the federal government before, they see the new reporting requirements as a serious mandate, Miller said, but “they may not have the resources to sift through and implement each provision in a timely manner.”

“Payers trying to understand the requirements, the data gaps and the technical issues associated with this new mandate may find that working with a reporting agent like Ingenix to develop a compliance strategy is the most effective route,” Maloney suggested. “We will track not only what’s required now, but what changes in the future, so our clients don’t have to,” he said.

St. Clair agreed, adding that “Ingenix monitors all CMS updates on requirements, so we can help clients understand who has to report, what they need to do to report and submit as required, and which of our solutions would best suit their situations.”

With potential penalties of $1,000 per claim per day, the impact of noncompliance is great. “CMS wants the requirements to work and is interested right now in collecting as much accurate data as possible,” Maloney said, “but it will start to penalize at some point.” It is worth noting that Congress has allocated $35 million per year to CMS to both implement and enforce the new mandate.

Taking action now is key

To begin making strides toward compliance, “payers and insurers should quickly do a gap analysis to determine what data are required that they don’t already collect, and figure out how to mitigate those gaps,” Maloney advised. “Then they need to address the purely technical aspects of developing a programmatic solution that allows them to meet the mandate.”

Ingenix can help by drawing on its extensive experience working with myriad state requirements in the workers’ compensation area. “As an established EDI vendor, the technology we’ve built to support the workers’ compensation market can be leveraged to bridge the gap payers face in meeting the federal reporting requirements related to CMS reporting,” Maloney said.

By adding new elements to its existing systems, Ingenix can provide insurers with a full solution covering the CMS requirements, he continued. “For payers, achieving compliance with the new CMS mandates may be a huge step,” he explained. “But for Ingenix, it is only a small step.”

The Ingenix solution also offers the expertise of consultants who can help payers understand how the new mandate will affect their workflow, provide guidance on system design and eligibility determinations, and audit relevant data for reportable claims. Ingenix also will offer an Internet-based reporting tool, which is part of its WorkComp.NET suite of EDI services, that complies with the CMS query and claims reporting requirements.  

Ultimately, Miller explained, Ingenix can harness data resources, knowledge and analytic tools to create multiple system and process options that will work for each payer. These options include:

1. Payers can access the Ingenix user interface to enter queries or report manually (this involves no IT effort on the payer side)
2. Payers can take the data they have and submit it to Ingenix to import into an Ingenix system and augment with partial data entry (Ingenix details what is missing so the payer can submit the correct information to CMS.)
3. Payers can choose full integration of all the data fields using the Ingenix WorkComp.NET system. (Ingenix provides query and report responses that identify missing or erroneous data that are integrated into the client’s systems for error correction prior to being submitted to CMS.)

“Option 1 is the quickest and may be the only way for some entities to achieve compliance within the time frames, but it’s not the most efficient approach because the payer can’t leverage its own data,” Maloney said. “Payers need to ask themselves: ‘What is the most efficient, accurate and cost-effective way to meet these requirements in the short term, midterm and long term?’”

St. Clair noted that all of the Ingenix solutions would include a data editing process to ensure that data are accurate and complete and that reports are properly sequenced and filed correctly.

“By using an Ingenix solution, payers can take advantage of our proven expertise in EDI to be compliant with this new mandate. Our solutions are easy to use and incredibly flexible,” St. Clair said. “We provide consulting, education and the technical tools to help payers be compliant with the least amount of pain. Current Ingenix EDI clients can leverage the processes, procedures and knowledge they have in place today for quick and easy implementation of CMS EDI requirements all in a single contract.”

¹ Trusiak, Robert G., “The Medicare Secondary Payer Statute: Medicare’s Recovery Rights in Relation to Liability and No-Fault Insurance,” Bar Association of Erie County Bulletin, Vol. 48, No. 2 (October 2008).
² CMS, “Supporting Statement for the Medicare Secondary Payer (MSP) Mandatory Insurer Reporting Requirements of Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007.”
³ CMS, “MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting, Liability Insurance (including Self-insured), No-fault Insurance and Workers’ Compensation, User Guide Version 1.0” (March 16, 2009).
⁴ 73 Federal Register 45013-45014 (Aug. 1, 2008).

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