CMS covers NGHP Section 111 reporting issues in September 12 webinar

By Mark Popolizio, J.D., Jeremy Farquhar

September 18, 2024 / 19 min read

On September 12^th, the Centers for Medicare and Medicaid Services (CMS) held a non-group health plan (NGHP) Section 111 webinar. As part of this hour long event, CMS provided refreshers and information on several different Section 111 reporting aspects, including the TPOC reporting trigger, CMS’s upcoming TPOC/WCMSA reporting process, and various other Section 111 items. Of note, CMS did not discuss Section 111 penalties, although the agency stated that it plans to hold a Section 111 CMPs webinar sometime next month (no date was provided).

woman reviewing paper

The authors attended CMS’s webinar and provide a general, non-exhaustive, outline of key points discussed by CMS as follows:

TPOC reporting refresher

CMS started the webinar by outlining its general definition of what constitutes a TPOC (Total Payment Obligation to the Claimant) followed by some refreshers on basic TPOC reporting criteria and practices as follows:

TPOC Amount: CMS started this segment by outlining the types of items it would expect to be included when calculating the TPOC Amount. On this point, by way of some examples, CMS noted the TPOC amount should include all Medicare covered and non-covered medical expenses, indemnity payments, attorney fees, set-aside amounts (in workers’ comp settlement scenarios), annuities (total amounts), advances paid as part of a settlement, amounts forgiven by the carrier/insurer and lien payments.

Particularly notable is the reference to amounts forgiven by the carrier/insurer. This is an item that CMS included as part of its definition of the TPOC amounts as contained in its Section 111 NGHP User Guide, and which, anecdotally, has been reported as a common source of confusion for many RREs.^[1] On this point, during the Questions and Answers portion of the call, an attendee asked CMS to clarify what they meant by amounts forgiven by the carrier/insurer. In response, CMS provided an example of an RRE hospital that may be self-insured for purposes of liability in which an incident occurs and, as a part of the resolution of a claim, decides to “write off” or “waive” portions of the claimant’s bills for medical services received. CMS indicated that this would be an example of the type of scenario that it is referencing when it refers to amounts forgiven by the carrier/insurer.^[2]

When a TPOC is reportable and Funding Delayed Beyond TPOC Start Date: CMS then touched on other items such as when a TPOC becomes reportable and how the Funding Delayed Beyond TPOC Start Date field is expected to be utilized when the date that the settlement/TPOC monies will be funded/disbursed is not yet known as of the TPOC Date or in instances where the date of funding/disbursement is a known future date. CMS clarified that reporting of the TPOC should not occur until the date of funding/disbursement has been identified and date of funding/disbursement is to be submitted as the Funding Delayed Beyond TPOC Start Date.

Indemnity Only Settlements: CMS then addressed indemnity only settlement/TPOC scenarios. In the authors’ experience, this is a topic that causes considerable confusion for many RREs. On this point, CMS clarified that, in instances where solely an indemnity portion of a claim is settled and where settlement pertaining to medicals is still pending, that the RRE should not report the indemnity only settlement as a TPOC. CMS then indicated, if/when medicals are resolved via a separate subsequent settlement, that this is when the TPOC reporting obligation would be triggered. CMS further clarified that when a settlement does resolve medicals, that the total of all aggregate settlement funds are to be reported and, if included within the settlement that simultaneously resolves medicals, that funds allocated for indemnity purposes should be included within that aggregate TPOC Amount.

For additional information regarding TPOC, see, Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III (Chapter 6), Section 6.4 and Chapter IV (Chapter 6), Section 6.4.

Claim Response File Disposition Codes

CMS also provided a brief refresher regarding the disposition codes which RREs may receive within their quarterly Claim Response Files. The codes were outlined as falling into either accepted (‘01’, ‘02’, ‘03’) or rejected (‘SP’, ‘51’, ‘DP’) categories and then CMS spent a bit of additional time specifically reviewing each of the three rejected codes in greater detail. CMS explained that ‘SP’ indicates a rejection due to errors, that ‘51’ represents scenarios where the injured party being submitted was not identified as a Medicare beneficiary and ‘DP’ represents scenarios in which a partial SSN was submitted in which the information submitted matched to more than one potential Medicare beneficiary.

In relation to the ‘SP’ disposition code scenarios, CMS indicated that RREs should review errors received and resubmit corrections on their next quarterly file submission. In relation to the ‘51’ disposition code it was explained that, in a TPOC only reporting scenario, if the RRE has verified that all personal identifying information for the injured party is accurate that a resubmission would not be required. However, it was also clarified that, if a ‘51’ disposition is received in response to an ORM coverage submission that the RRE should continue to submit the coverage on subsequent quarterly file submissions until either the coverage record is eventually accepted or, if ORM terminates after which point a ‘51’ disposition code is still received, that the RRE could then safely cease attempting to report the coverage record in question. Then, in regard to the ‘DP’ disposition code scenarios, CMS explained that RREs should attempt to verify the personal identifying information being submitted for the injured party in question, make corrections if necessary, and, if possible, resubmit with the full SSN as opposed to the partial SSN provided via the initial submission. Then, if the subsequent resubmission still generates a ‘DP’ disposition, RREs were instructed that they should contact the BCRC call center and that a manual self-report could be facilitated based on that phone call.

Finally, CMS referenced scenarios where a ‘50’ disposition code may be received and explained that this disposition code indicates that the record in question was still processing at the time the response file was generated and that RREs should simply resubmit these coverage records within their next quarterly file submissions.

Top Section 111 error codes

CMS discussed top Section 111 reporting errors generated from January 1, 2024 through June 15, 2024. As examples, CMS noted CI05 (ICD Diagnosis Code 1 missing or invalid) as their top error indicating that this was most commonly in relation to scenarios in which RREs simply failed to appropriately report an ICD code altogether but noted this error could also be generated if an invalid or improperly formatted code had been submitted. Additional errors which CMS discussed included the TN99 error which is most commonly generated when no matching TIN Reference File detail record containing the TIN and Office Code/Site ID values reported via the Claim Detail Record are found within the RRE’s TIN Reference File; the CP11 error which is most commonly generated when a no-fault coverage record is submitted with a $0 No-Fault Insurance Limit value; additional claim injury related codes such as CI06 (Invalid ICD Diagnosis Code 2), CI03 (Invalid Alleged Cause of Injury Code), CI31 (Invalid ICD Indicator Value), CI07 (Invalid ICD Diagnosis Code 3), and CI04 (Invalid State of Venue); TPOC/ORM related errors including CJ04 (TPOC Amount 1) most common when a TPOC Date is submitted without a TPOC Amount 1 value and CJ07 (TPOC Threshold) which is only generated when ORM is submitted as “No” and no TPOC information is submitted.

Hard vs. Soft Errors

CMS also reminded the attendees of the difference between “hard” and “soft” errors. In this regard, CMS explained that “hard errors” are those which will cause CMS to reject an RRE’s coverage submission while “soft errors” will not, on their own, result in a rejection of an RRE’s submission. While it was noted that CMS will still accept a coverage submission in the event that the only error(s) identified are “soft errors,” CMS also made it clear that RREs are still expected to review “soft errors” and resubmit any warranted corrections via their next quarterly file submission.

Changing Reporting Agents

CMS discussed information regarding situations where an RRE changes reporting agents. On this point, CMs provided a couple of specific example scenarios.

The first example involved situations when an RRE moves “new” business to a TPA and is leaving all existing claims with the current TPA. In this situation, CMS advised that the RRE would need to set-up a new RRE for the new TPA to use for reporting new claim data. Further, CMS stated that the current TPA would use the existing RRE ID for reporting of existing claims; while the new TPA would use the new RRE ID for reporting new claims. In addition, CMS noted that no Section 111 update is required for existing claims.

The second example involved situations where an RRE moves all claims, both new and pre-existing, to a new TPA. In these scenarios, CMS indicated that the single pre-existing RRE ID could be transferred for use by the new TPA and that creation of a new RRE ID would not be required. CMS also mentioned the possibility of policy number changes which might potentially occur in these scenarios and highlighted the fact that the policy number is a key field value. That being the case, CMS noted that if a policy number were to change, in order for an update to the policy number to be applied, the new entity facilitating the reporting would be required to submit a delete record containing the prior policy number coupled with an add record which would contain the new policy number. It may be worth noting that, in the authors’ experience, a policy number change would be more common in scenarios where responsibility for claims are transferred between one RRE and another, as opposed to a transfer from one reporting agent or TPA to another reporting agent or TPA in connection with the same RRE, but, in the event that a policy number were to change in one of these scenarios, the aforementioned delete/add process would be required.

Section 111 Coordination of Benefits Secure Website (COBSW) Updates

Another topic which CMS touched upon briefly are updates/upgrades which were recently applied to their Section 111 Coordination of Benefits Secure Website (COBSW). They made note of the redesign and new look of the website and indicated that, while all prior functionality remains intact, that navigation of the site has changed in certain respects. CMS also called attention to new Help Page resources available via the link on the website’s login screen as well as an updated Section 111 COBSW User Guide available to users, upon logging into the site, via the Reference Materials file menu.

TPOC/WCMSA reporting refresher

CMS then provided a refresher of certain points related to its upcoming TPOC/WCMSA reporting process.

On this topic, CMS reminded the audience that CMS is expanding its Section 111 reporting process to capture certain workers’ compensation Medicare set-aside (WCMSA) data points involving workers’ compensation settlements with Medicare beneficiaries as part of TPOC reporting. CMS reiterated that its new TPOC/WCMSA reporting process starts April 4, 2025 and is prospective – meaning it applies to TPOCs on or after April 4, 2025.

In this regard, CMS repeated that reporting under this process is required regardless of whether the WCMSA was submitted to CMS for review/approval under its voluntary WCMSA review process, and, thus, also applies to non-CMS approved MSAs, evidence based medicine MSAs (EBMSAs), and scenarios where ORM is ongoing for some injuries associated to the claim but not others. While CMS did not discuss the exact data fields to be reported, based on prior information released by CMS, RREs will be required to submit the WCMSA amount, WCMSA funding method (lump sum or annuity), initial deposit amount, anniversary (annual deposit amount), and the WCMSA period.^[3] The WCMSA case control number and professional administer EIN will be optional fields.^[4]

In addition, CMS stated that the data should be reported for WC TPOCs regardless of the TPOC value. Here it may be worth noting that, while CMS did not initially reference their $750 minimum TPOC reporting threshold when making the aforementioned statement, they did subsequently clarify that the $750 threshold would continue to apply and TPOCs for physical trauma based claims that do not meet this threshold are not required to be reported.

TPOC/WCMSA – “special situations”

As part of its TPOC/WCMSA segment, CMS also discussed what it referred to as “special situations” regarding this process as follows:

Multiple defendant settlements

CMS indicated that, in settlement/TPOC scenarios involving multiple defendant parties/RREs, all involved defendant parties/RREs should be reporting the full settlement value, as well as the full MSA value, reflecting all defendant parties’ contributions to both the overarching settlement and MSA. However, it is noted that, at least in terms of the value expected to be reported as the TPOC Amount in such scenarios, CMS’s comments would appear to contradict its longstanding TPOC reporting guidance.

To unpack this, it is noted CMS’s published TPOC reporting guidance in its User Guide regarding scenarios involving multiple defendants is more nuanced than how CMS discussed the issue on the webinar. Specifically, in CMS’s User Guide Chapter III, Section 6.1.7, CMS states as follows: “Where there are multiple defendants involved in a settlement, an agreement to have one of the defendant’s insurer(s) issue any payment in obligation of a settlement, judgment, award, or other does not shift RRE responsibility solely to the entity issuing the payment. All RREs involved in the settlement remain responsible for their own reporting. For a settlement, judgment, award, or other [payment] with joint and several liability, each insurer must report the total settlement, judgment, award, or other payment—not just its assigned or proportionate share.” See, CMS’s Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III (Chapter 6), Section 6.1.7.

Thus, per Section 6.1.7 noted above, in addition to similar verbal guidance provided by CMS throughout the history of the Section 111 reporting process, when there are multiple defendant parties involved in a settlement, joint and several liability is an important determining factor which must be considered. Based on Section 6.1.7, an RRE would report the total settlement amount reflecting all defendant parties’ contributions only in joint and several liability scenarios. Conversely, in the event there is not joint and several liability, CMS’s guidance has been that each involved defendant party/RRE would have an obligation to report but should only report their own proportionate share of the settlement as opposed to the total settlement amount. See, CMS’s Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III (Chapter 6), Section 6.1.7. (authors’ emphasis).

When the dust settles, it is unknown to the authors whether the CMS presenters are aware that what it presented on this issue contradicts the longstanding published guidance in Section 6.1.7. On this point, as is customary for CMS on its webinar, at the beginning of the webinar the agency provided its standard disclaimer that, while CMS does its best to ensure that all information provided is accurate, if anything stated contradicts the official guidance provided within the NGHP User Guide, Section 111 Alerts or other published documentation, that the published guidance takes precedence. It will be interesting to see if CMS may provide subsequent clarification on this topic.

Partially resolved TPOC claims with remaining ORM

On this point, CMS explained that, in the event an MSA is established through a partial resolution, that the associated MSA should be reported in conjunction with the partial resolution TPOC report while the ORM coverage record should be updated to remove the ICD codes resolved/released via the partial resolution. This is in keeping with general guidance that CMS has published via its NGHP User Guide in relation to partial resolution TPOC reporting scenarios.^[5]

Third-party liability settlements

CMS reiterated similar guidance to that which it had provided during its April 25, 2024 TPOC/WCMSA Question and Answer session. The scenarios outlined were those in which an MSA is established based on a third-party liability settlement in cases where a corresponding workers’ compensation claim also exists. In the scenarios described, an MSA may be funded by the third-party liability settlement and the workers’ compensation carrier may simply waive their lien rights in exchange for case closure. While the MSA is not being funded by the workers’ compensation carrier, CMS has indicated that it still considers this a workers’ compensation claim and that it would expect the workers’ compensation carrier to report the MSA.

However, this is another area in which the guidance CMS provided during its webinar would appear to be somewhat out of step with its published guidance. Per the authors’ perspective, where this would appear to be problematic is in relation to CMS’s general TPOC reporting requirements. In the aforementioned scenarios, the workers’ compensation carrier has not directly facilitated settlement, nor have they made any payments to or on behalf of the injured party/beneficiary in connection with the third-party carrier’s settlement. That being the case, it is questionable how the workers’ compensation carrier could be viewed as having a TPOC reporting responsibility since it is the third-party carrier --- and not the workers’ compensation carrier – that has reached a settlement with the claimant. Thus, from the authors’ view, it is not clear how CMS would expect the workers’ compensation carrier to report the MSA. Further, there would not appear to be a means via which this could appropriately occur from a technical Section 111 reporting perspective. Without ORM or TPOC information included within the Section 111 report, the workers’ compensation carrier’s coverage record would be rejected by CMS with a CJ07 error.^[6] Of note, the CJ07 error is one of the top 10 error codes noted above which CMS outlined earlier in their presentation.

TPOC/WCMSA Voluntary Testing (starts 10/7/24)

CMS reminded the audience that voluntary testing for its upcoming TPOC/WCMSA reporting process (see section above) starts October 7, 2024. CMS directed RREs to contact their EDI representatives if they are interested in participating in voluntary testing. CMS stated that RREs should submit test files to the BCRC using the same transmission method that was selected for production (CMS noted: HTTPS, SFTP, or Connect:Direct). In addition, CMS noted that test Medicare beneficiary data may be downloaded from the Section 111 COB Secure Website for RREs to utilize as part of testing. Finally, CMS directed the audience to Chapter IV of its current Section 111 NGHP User Guide for more information.

Upcoming Section 111 penalties webinar

CMS did not discuss Section 111 civil money penalties (CMPs) as part of this webinar. However, the agency noted that it plans to hold a Section 111 CMPs webinar sometime in October (no date or other information was provided).

Question/Answer Segment

As part of the Q/A session, CMS fielded questions regarding a variety of issues which included the following:

TPOC reporting re: wrongful death settlement: CMS fielded a question from an attendee regarding how they should report in a scenario involving a wrongful death settlement. CMS clarified that, a TPOC report would not be required in a scenario where the settlement was strictly in relation to wrongful death benefits and no payment for any form of medicals was included as part of the settlement. CMS noted that a TPOC report would only be required in the event that medicals are claimed or released as part of the settlement.

Proper TPOC reporting when funding is delayed: CMS fielded another question from an attendee who had inquired how to report when there has been a delay in the funding of the settlement/TPOC. The questioner asked if an RRE should initially report the TPOC once the settlement obligation is established and the TPOC date is determined and subsequently submit an update with the Funding Delayed Beyond TPOC Start Date once the date of funding/disbursement has been established. In response, CMS clarified that this would not be the appropriate means of handling. CMS instructed that the RRE should refrain from reporting until the date of funding/disbursement has been determined and should then submit a single TPOC report which includes that date of funding/disbursement as the Funding Delayed Beyond TPOC Start Date.

Multiple plaintiff settlements where specific plaintiff information is unknown: Another attendee questioned CMS regarding settlement scenarios involving multiple plaintiffs in which specific involved plaintiff information has not been made available to the RRE. CMS initially noted that, if the RRE is unable to obtain the necessary specifics regarding the plaintiffs involved in the settlement, that a Section 111 report would not be possible. However, CMS presenters subsequently clarified that it would be CMS’s expectation that the RRE would make a concerted effort to obtain the associated plaintiff information and suggested that the RRE should carefully document their attempts to obtain the information and that, if they were ultimately unable to obtain the required information to report, that they should ensure that they meet the requirements outlined in CMS’s “good faith” compliance safe harbor as outlined in the “final rule” regulations for the CMPs process.^[7]

Calculation of TPOC amount and inclusion of lien payments: CMS fielded a question requesting that they explain what they are referring to by “lien payments” in relation to things which should be included when calculating the TPOC amount. In response, CMS provided an example where medical services may have been received for which a provider has not yet received payment and has established a lien against the claimant/beneficiary. In the event that the defendant/RRE has agreed to resolve that lien as part of their settlement agreement, that lien amount should be included within the reported TPOC amount.

Questions?

Please do not hesitate to contact the authors if you have any questions on the above or would like to learn how Verisk can help you with your Section 111 reporting obligations.

[1] Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III, Section 6.4.

[2] For those readers who are interested in further reviewing reporting requirements in relation to these specific types of scenarios, see CMS’s NGHP User Guide section on Risk Management Write-Offs and Related Actions (NGHP User Guide, Chapter III, Section 6.5.1.7).

[3] See, Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter V, Appendix A.

[4] Id.

[5] Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter IV, Section 6.6.4.

[6] Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter V, Appendix G.

[7] Fed. Reg. Vol. 88, No. 195, 70363-70372 (October 11, 2023).