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CMS Publishes NGHP Section 111 User Guide Version 7.4

February 1, 2024
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User Guide spelled out in wooden blocks

by F. Fairchok

The Centers for Medicare & Medicaid Services (CMS) published an update to the Non-Group Health Plan (NGHP) Section 111 Reporting User Guide on January 22, 2024. This updated User Guide, Version 7.4, contains changes relating to the implementation of the Civil Money Penalties Final Rule that became effective on December 13, 2023 along with other minor updates.

Civil Money Penalties

This addition to the User Guide includes new information around how CMS intends to identify and penalize Responsible Reporting Entities (RREs) as it relates to the Final Rule posted to the Federal Register on October 11, 2023. In Chapter III, Policy Guidance, a new Section 5.1 has been added that provides an overview of the penalty process. Highlights from this section include (emphasis added):

  • NGHP RREs that fail to comply with these reporting requirements are subject to a CMP of up to $1,000, as adjusted for inflation for each calendar day of noncompliance.
  • To drive compliance with the required reporting, CMS will select a randomized sample of 250 new MSP occurrences each quarter and audit these occurrences to determine whether RREs have complied with the reporting requirements for each of these occurrences.
  • An RRE is deemed compliant where the RRE reported the MSP occurrence no later than 365 days after the RRE assumed primary payment responsibility or primary payment responsibility was otherwise demonstrated by a settlement, judgment, award, or other payment. In other words, RREs must report within one year of the date of incident, when ongoing responsibility for medicals (ORM) is assumed, or the TPOC date, or other operative dates when appropriate (for example, the Section 111 NGHP User Guide Chapter 5: Section 111 Overview 5-3 beneficiary’s entitlement date if the beneficiary became entitled after ORM was assumed, or the “Funding delayed beyond TPOC date” as further described in Section 6.5.1.2 below).
  • The occurrences to be audited will include both Section 111 submissions and records from sources outside of the Section 111 reporting process, to ensure that CMS does not miss those situations where an RRE has entirely failed to report the occurrence.

This new section also describes the process that CMS will use to notify an RRE of potential non-compliance (emphasis added):

  • RREs will be notified of potential non-compliance by CMS and afforded the opportunity to present information that demonstrates that the RRE was actually compliant. Such information will vary depending upon the situation but may not include those situations where the RRE submitted records that CMS was unable to process due to the RRE’s file and record errors.
  • Should CMS move forward with a potential CMP, a notice of proposed penalty will be issued. RREs should take note that the imposition of CMPs and appeals processes are separate and distinct from the initial determination and appeal rights for MSP debts. Should the RRE fail to request a hearing in response to the proposed penalty, or fail to successfully dispute the proposed penalty in the hearing, the penalty will be imposed.

Minor Changes

In addition to the new language around Civil Money Penalties, there were several minor updates included User Guide as well, which include:

  • Instructions were updated for signing up for the CMS.gov website to receive update notifications throughout the User Guide.
  • Email addresses have been updated through the User Guide to reflect recent domain changes.
  • Field 18 in the Claim Input File Detail description was corrected to note that ICD-10 codes beginning with a “Z” may not be submitted on Section 111 reports (Appendix A).
  • Parentheses are allowed in DBA Name (Field 48) and Legal Name (Field 49) in the Claim Input File Detail record (Appendix A).

Commentary

Version 7.4 of the User Guide introduced concepts related to the long-awaited Civil Money Penalties Final Rule. It is worth noting once again that the Final Rule issued was very different than what was published in the Proposed Rule in February 2020. The Final Rule removed areas of concern around late reporting of ORM Termination and the accuracy of reports where the reported data contradicted information within the Conditional Payment process.

The Final Rule concentrates on the timely reporting of ORM acceptance, as opposed to ORM Termination, and CMS uses the CMS Date of Incident as the ORM acceptance and start date. It will be critical for RREs to have an efficient process for determining if they have responsibility to pay medicals for injuries. Likewise, any delay of reporting ORM, due to investigation of the claim or denial of the claim, should be well documented to present to CMS should the claim be selected for audit.

The Final Rule also targets the late reporting of Total Payment Obligation to the Claimant (TPOC).  However, this was introduced via the Proposed Rule and should not come as a surprise to RREs  since CMS has always triggered compliance flags where TPOCs were reported a quarter and a half later than the date of the TPOC.

One important clarification included in User Guide 7.4 is that the data audited may come from outside the Section 111 Reporting process itself, such as self-reports sent to CMS. This is to “ensure that CMS does not miss those situations where an RRE has entirely failed to report the occurrence”. Some in the industry raised questions around avoidance of reporting claims with the theory that you could not get audited if you never reported data. This clarification shows how CMS intends to catch non-reports of claims, and those RREs failing to report may put themselves at a greater risk of penalty than an RRE with proven processes who reports on a timely basis.

For questions regarding this article, changes made in version 7.4 of the User Guide, or further guidance on Section 111 reporting compliance please don’t hesitate to email our experienced Medicare Secondary Payer Reporting services team at [email protected].