Those in the workers' compensation sector are navigating significant changes and aggressive timetables related to new mandatory reporting rules for Workers’ Compensation Medicare Set-Aside Arrangements (WCMSA). The expansion of SCHIP Section 111 Non-Group Health Plan (NGHP) Total Payment Obligation to Claimant (TPOC) will now require inclusion of WCMSA information. Reporting of WCMSA is expected to begin April 4, 2025. The new requirements have many reporting organizations and their partners exploring the reporting requirements, deadlines and ramifications. The alert from CMS for WCMSA can be found here.
CMS, during their recent Townhall conference held on April 16, 2024, stated that while the overall structure for penalties will not change, required mandatory WCMSA fields if not submitted accurately could prevent an RRE from reporting claims timely for ORM or TPOC. This stems from the October 11, 2023, release by CMS of a final rule specifying how and when CMS will calculate and impose civil money penalties when non-group health plan responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations, according to this CMS alert. Read the text of CMS Federal Register Final Rule Civil Money Penalties in its entirety here.
The accelerated timetable will quickly be upon plans and reporting entities, meaning the time is approaching for reporting entities that report Workers' Compensation, Liability and No-Fault claims to prepare to meet reporting requirements. Beginning October 11, 2024, CMS will begin its process of randomly monitoring claims for late reporting of claim settlements and on-going responsibility for Medical.
In October 2024, CMS will begin monitoring for late TPOC (total payment obligation to claimant) and late reporting of On-Going Responsibility for Reporting “ORM.” The process of randomly selecting claims for review, and the issuance of any penalty notifications, will begin in October 2025.
For Medicare beneficiary settlements, claims must be reported within one year of the applicable reporting window. Penalties will not be assessed to RREs that have made a “good faith effort” to find the information. Such an effort includes two written (via U.S. Mail) and one digital (phone, email, fax, etc.) outreach to obtain the information required to report, including an individual’s full name, date of birth, gender and Social Security Number.
Penalties associated with non-compliance will be stiff. They will increase in 2024 according to the following schedule:
- $357 per day for every day “for which the required reporting data should have been submitted” between one to two (1-2) years previously.
- $714 for each day from two to three (2-3) years after the required reporting date.
- $1,428 for each day beyond three (3) years after the required reporting date
The maximum total per claim penalty is $521,220 for claims reported beyond three (3) years late. That’s how seriously organizations must treat claims reporting.
There will be no specific “targeting” of filers. CMS will randomly select 250 claims per quarter nationwide among non-group health plan and group health plan filers. As such, this will reduce filers’ chance of facing an audit or penalty. But the chance of an audit still exists, so organizations should work to comply.
If selected, what can trigger an investigation? Simple errors can easily thwart compliance, even those leading to a claim getting caught up in the system. Organizations can be penalized for late reporting of ORM and late reporting of TPOC. This often occurs when an organization or adjuster was waiting on a claimant’s full name, date of birth, gender, or Social Security Number as needed to identify Medicare eligibility.
Contrary to previous guidelines from Medicare about when to terminate, new guidelines released in November 2021 by CMS provide new ORM termination rules. Utilizing good standard practices terminating ORM based on the new CMS rules or using automation to terminate following CMS requirements is a good solution.
For organizations with hundreds of thousands of claims, implementing a system to manage ORM termination could take a lengthy trial- and- error period to implement automation. The Medicare Advantage Plan (MAP) data provision is a significant consideration (read the official CMS alert here). Large insurance providers are grappling with how to incorporate data into their processes, as MAP providers are able to pursue the same recoveries as Medicare.
Anticipating this change, Broadspire invested time into programming a solution to automate the process, incorporating the necessary MAP fields as a way to reduce claims adjusters’ workloads and possible oversight. This integration of MAP retrieval directly into the claim application helps ensure an effort to comply with MAP’s right to recovery.
What’s next?
Take advantage of the period between now and October 11, 2024, when the final rule will become applicable, and October 2025, when Mandatory Insurer Reporting and Civil Money Penalties will begin. To be clear, they will not work retroactively to apply penalties, unless you haven’t reported as of October 11, 2024, and the RRE reports that claim more than one-year late for ORM or TPOC. Upon that date, Medicare - not its contractor agencies - will start examining files for late reporting.
