CMS Issues New Section 111 NGHP User Guide
Roy Franco
July 27, 2010

Version 3.1 of the new NGHP user guide, dated 07/12/2010 was issued this past week by CMS.  Click here for the updated User Guide.

Changes from the previously issued version (3.0) may be found at Section 1, starting at page 6. Here are some of the more important highlights for consideration as well as related commentary.

1. Section 7.1 of the Guide defining the RRE was deleted and replaced in its entirety with the May 26, 2010 “Alert for NGHP – RREs/Who Must Report”. As it now stands, any primary plan that has an insurance policy, irrespective of whether it controls its own deductible or processes its own claims within the deductible is not the RRE. Rather the insurance carrier is always the RRE except for one situation. That exception is where the policy issued is a fronting policy.

2. A new requirement was added that all RRE IDs are now required to move to a production status within 180 days after initiation of the registration process. This is an interesting development in that anyone that initiated the RRE ID last year should now be in production status. This makes sense for ORM reporting, as that data collection started for all claims that are open as of January 1, 2010. However, TPOC reporting cannot start until October 1, 2010, the date CMS selected as the start date for that collection of data. Based on CMS being ready to receive production data that the January 1, 2011 Section 111 implementation date will hold firm. It appears no further extensions will occur.

3. If the entity has previously registered and has received an RRE ID but no longer needs it because of the change in the definition of who is an RRE, then it must change its status to “inactive” versus discontinued with the COBC. There may be point in the future when that RRE ID may be used. That situation could occur when the RRE decides to act without recourse to its insurance program and handle the claim without “ever” reporting it to the insurance carrier. However, any subsequent reporting for any purpose, be it marketing for a new program, etc. requires that the insurance carrier always be the RRE.

4. Last names may contain hyphens. However, first names may only contain letters and spaces. No doubt this will need to be corrected at the programming level when data is moved from a claims system to Medicare because most claim systems will take both first and last names with hyphens. If not, this will result in errors and possible Section 111 penalties.

5. Use of SSN is valid only on the initial submission of the claim input file. Medicare will return the HICN and the RRE is required to use the HICN for any future file transmissions and not the SSN.

6. RRE-IDs must use Version 28 of valid ICD-9 diagnosis codes from the CMS website. ICD-9 codes submitted should be those that reflect the illnesses/injuries claimed and/or released by the settlement, judgment, award, or for which ORM is assumed. It would appear that settlement documents will need to reflect precisely what is being resolved.

7. Multiple TPOCS have been clarified in Section 11.5. It is to be used where an RRE negotiates separate, different settlements at different times for a liability claim. This occurs in most cases in the area of no-fault where separate settlements can occur for specified periods of time. This is different from correcting a previously reported TPOC. If the RRE wants to correct this information, select the action type “update” and place the corrected information in Fields 100 and 101 which will overwrite the original reporting information.

8. RRE IDs need not submit “empty files” if there is nothing to report. Sections 11.7 and 11.10.1 were revised to reflect that change.

9. Two separate Section 111 reports are required for the same incident and injured party and insurance policy claim when ORM and TPOC reflect different insurance types such as no-fault coverage versus General Liability coverage.

10. Risk Management Write-Offs in Section 11.10.2 has changed from the previously issued alert issued on May 26, 2010. Essentially, if the value of property provided to the Medicare beneficiary is greater than the reporting threshold, such value must be reported as a TPOC. An exception to this rule is where a healthcare provider reduces the value of his or her own services in exchange for a release. In that situation only the reduced value of services is the TPOC value. This is an important section as it has relevance on other issues such as gift cards, etc, anything where a an item of value is provided to the Medicare beneficiary in exchange for a release, that value is reported as TPOC assuming it exceeds the thresholds.

11. Severe and threshold errors in Section 12.3.1 and 12.3.2. COBC will suspend transactions (and potentially subject the RRE to penalties) for failing to properly submit claim information when reporting. These sections review those situations where COBC will take action of suspension against the RRE.

12. Direct Data Entry was added in Section 15.5 is now available for “Small Reporters”. It is intended for RRE IDs that plan to submit 500 or fewer NGHP claim reports per calendar year. No query function will be available to the “Small Reporter”. It is a time consuming process as all fields are required to be entered and work in progress can only be saved for 30 days. If a RRE ID considers this process, then it must register, beginning October 4, 2010.

13. TIN/Office Code Mailing Name (Field 5) of the TIN Reference File Detail Record in Appendix B is used for any recovery demand notifications that may be associated with the claim report. It appears CMS intends to send recovery notices to the RRE. This is an interesting development because initial indications were that recovery was focused on the Medicare beneficiary. It appears that if the Medicare beneficiary has not reimbursed Medicare within sixty days from the issuance of the final demand that CMS will issue recovery letters to the RRE ID. This would also include subsequent debt collections notices by the Department of Treasury. Given this development it would make sense that the RRE ID satisfy the conditional payment obligations at the time of settlement and not rely on the Medicare beneficiary to complete this process. This will cause considerable change to the workflow of most claims operations today.

14. TPOC date must always be greater than the CMS Date of Incident.

15. Important programming note for addresses. Street Number and Street Address are to be placed on one address line while other information such as apartment number, suite number, attention to, etc. should be placed on the next address line.

16. Field descriptions in Appendix A for Claimant 1 -4 TINS were updated. TINS cannot match up with the Injured Party’s SSN and therefore was removed. This is especially true in the situation where the other claimant may be an estate.

What was not covered by the new version of the User Guide is how the industry is to handle mass torts. That issue presumably will be handled by subsequent alerts. It is an important area and one that perhaps may have an impact on finalizing Section 111 data programming. It is something to remain aware of as we get closer to the Section 111 implementation date.

If you have any questions or would like to further discuss, please feel free to contact us at Franco Signor LLC. Acting as a broker of cooperation between a plaintiff and defendant for the liability case is the only way to ensure conditional payment satisfaction at the time of settlement. Given the information to be reported to Medicare under Section 111 a RRE ID may be challenged a few months after its implementation with an unexpected number of letters from Medicare for reimbursement. Contact us now and we can show you how to avoid this from happening.