Medicare regulations frequently change as reporting requirements and MSAs are expanding to encompass liability claims as well as Workers’ Comp claims. While most Responsible Reporting Entities (RREs) have an awareness of the Section 111 quarterly report, significant knowledge gaps exist. Without a full understanding of the Reporting process, it is difficult to ensure compliance, and there can be substantial financial penalties for non-compliance. Unfortunately, the Reporting process is error prone and unusually time sensitive.
What is Section 111 Reporting?
Section 111 Reporting is a Medicare compliance requirement created by Congress in the 2007 Medicare, Medicaid, and SCHIP Extension Act (MMSEA). It requires insurers to report settlements, judgments, awards or other payment(s) made to a Medicare beneficiary as a result of a personal injury claim. This reporting requirement was enacted to provide Medicare with the information needed to pursue recovery of Conditional Payments made to health care providers by Medicare for Medicare beneficiaries who have a primary payer in place.
Why Was Section 111 Reporting implemented?
By 1980, it had become evident that Medicare could not be the primary payer for all Medicare beneficiaries and remain financially viable. The Medicare Secondary Payer (MSP) Act of 1980, shifted Medicare to being a secondary payer. However, in cases where the existence of a primary payer has not been confirmed, Medicare often pays health care providers on behalf of the Medicare beneficiary, but on condition that Medicare will be reimbursed if a primary payer exists.
Unfortunately, there was no effective enforcement means in the 1980 MSP Act to ensure reimbursement because Medicare had no way of determining if a primary payer existed when a Conditional Payment had been made. As Medicare’s costs continued to increase, the need to be reimbursed for Conditional Payments became increasingly urgent if Medicare was to remain viable.
How Does Section 111 Reporting Impact Me?
To address the information gap regarding the existence and identity of a primary payer, the 2007 MMSEA legislation was passed, which included mandatory Section 111 Reporting for all RREs. In summary, the information to be reported to Medicare for every Medicare beneficiary claim includes:
- The parties to the claim (which would include the primary payer)
- The amount of money involved in the claim
- When the claim was opened and closed or settled
After the claim details and involved parties have been reported, Medicare provides the information to their Conditional Payment Recovery contractor. This contractor utilizes the Section 111 Report information to identify RREs that are not in compliance with Conditional Payment reimbursement obligations, and enables Medicare to pursue reimbursement, plus penalties, from the primary payer.
From an insurer’s perspective, the following points are especially relevant and important:
- Failure to file the quarterly section 111 report can result in a penalty up to $1,000 per day per claim.
- Section 111 Reporting requirements are complex, error prone and time consuming with up to 130 data elements to be reported for each claimant.
- The process of preparing the Section 111 Report requires a significantly disproportionate utilization of an insurers internal resources vs non-Medicare claims.
- The Section 111 Report informs Medicare of the primary payer, the amount of the settlement, the parties to the settlement and the timing of the settlement.
- If reimbursement (“Recovery”) of the Conditional Payment lien is not processed properly, Medicare can assess a penalty of double damages plus accrued interest.
The Flagship Solution
Section 111 Reporting is one of Flagship’s primary services. Our LumenX® system is one of the premier Section 111 Reporting systems in the country with a 99.96% Medicare acceptance rate. Its best-in-class, dedicated and fully-integrated IT infrastructure is capable of handling every aspect of Section 111 Reporting, including Medicare Querying to identify Medicare beneficiaries, and Section 111 Quarterly Reporting. Integration with clients’ existing claim systems is fast, easy and non-intrusive. It eliminates technical complexity from the Reporting process, ensures on-time reporting and report accuracy, provides secure data transmission and keeps an historical record of all submissions to, and responses from, Medicare for an easy-to-access audit trail. It is cost efficient because Flagship has the expertise, experience and resources.
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