Section 111 Mandatory Insurer Civil Monetary Penalties: CMS Announces an Update to the Issue Date for Proposed Rulemaking

CMS has recently announced that it has pushed back the proposed rulemaking and public comment solicitation period for assessment of civil monetary penalties for noncompliance with the Section 111 Mandatory Insurer Reporting guidelines to October 2019.

The Medicare Secondary Payer Act (MSPA) provides for civil monetary penalties to be assessed for noncompliance with the Section 111 Mandatory Insurer Reporting requirements. Specifically, 42 USC 1395y(b)(8) provides that a civil monetary penalty (CMP) of $1,000 per day per claim shall be assessed for noncompliance. Subsequently, the SMART Act clarified this provision to indicate that any such penalty shall be discretionary, and penalties of up to $1,000 per day per claim may be assessed for noncompliance. However, prior to assessing any CMPs to a Responsible Reporting Entity, we will first need regulations in place outlining exactly what constitutes noncompliance as well as the criteria for which penalties will and will not be assessed.

CMS has announced its intent to issue a Notice of Proposed Rulemaking in order to propose the criteria for which CMPs will and will not be assessed. The full announcement can be found here. Clarification regarding Section 111 CMPs is something that this industry has been awaiting for quite some time. This announcement extends the original timeline published by CMS on this topic. Earlier this year, a similar announcement indicated that this rulemaking and comment period would open in September 2019. That timeline has now been pushed back one month.

While the date listed for the Notice of Proposed Rulemaking is now October 2019, and it will no doubt take some time before any recovery audits are started and any CMPs are assessed, this notice makes it clear that Section 111 reporting penalties are in the pipeline. With that said, ensuring that your claim data is compliant with the Section 111 requirements can also take a considerable amount of time. We at Gordon & Rees have extensive experience in running Section 111 reporting programs for all types of carriers and self-insured entities, as well as performing full internal audits of Responsible Reporting Entities’ claim data to ensure full compliance with the Section 111 reporting guidelines.

Please keep an eye out in the coming weeks for a comprehensive webinar by the Gordon & Rees Section 111 Reporting team discussing how to get compliant with the Section 111 Mandatory Insurer Reporting requirements, how to perform an internal audit, and the most up-to-date information regarding the coming civil monetary penalties.

Gordon & Rees will continue to monitor all activity regarding Section 111 CMPs as it develops. For any questions or concerns regarding Section 111 reporting penalties or Medicare Secondary Payer compliance in general, please contact us at CMSReporting@grsm.com.

Senate Bill 135 Amends the Georgia Workers’ Compensation Act to Limit Certain Durable Medical Equipment and Treatments

Recently, Georgia has amended its Workers’ Compensation legislation to limit certain treatments in non-catastrophic cases. Becoming effective on July 1, 2019, the amended act now eliminates the 400-week cap for certain medical items and services that were furnished within 400 weeks of the date of injury and prescribed by an authorized physician.

Specifically, O.C.G.A Sec. 34-9-200 now states:

For injuries arising on or after July 1, 2013, that are not designated as catastrophic injuries pursuant to subsection (g) of Code Section 34-9-200.1, the maximum period of 400 weeks referenced in paragraph (2) of this subsection shall not be applicable to the following care, treatment, services, and items when prescribed by an authorized physician:

(i) Maintenance, repair, revision, replacement, or removal of any prosthetic device, provided that the prosthetic device was originally furnished within 400 weeks of date of injury or occupational disease arising out of and in the course of employment; 

(ii) Maintenance, repair, revision, replacement, or removal of a spinal cord stimulator or intrathecal pump device, provided that such items were originally furnished within 400 weeks of the date of injury or occupational disease arising out of and in the course of employment; and 

(iii) Maintenance, repair, revision, replacement, or removal of durable medical equipment, orthotics, corrective eyeglasses, or hearing aids, provided that such items were originally furnished within 400 weeks of the date of injury or occupational disease arising out of and in the course of employment.

The bill then goes on to define the following:

For the purposes of this subsection, the term:

(i) ‘Durable medical equipment’ means an apparatus that provides therapeutic benefits, is primarily and customarily used to serve a medical purpose, and is reusable and appropriate for use in the home. Such term includes, but shall not be limited to, manual and electric wheelchairs, beds and mattresses, traction equipment, canes, crutches, walkers, oxygen, and nebulizers. 

(ii) ‘Prosthetic device’ means an artificial device that has, in whole or in part, replaced a joint lost or damaged or other body part lost or damaged as a result of an injury or occupational disease arising out of and in the course of employment.

Per the Workers’ Compensation Medicare Set-Aside Reference Guide note “CMS will recognize or honor any state-legislated [1], non-compensable medical services and will separately evaluate any special situations regarding WC case”. Therefore, this amendment is of import as with this specific language, arguments can now be made to exclude pricey treatment such as intrathecal pain pumps and dreaded spinal cord stimulators. This could significantly impact WMCSA values in Georgia starting July 2019.

The GRSM Medicare Compliance Group will continue to monitor this, and other compensability matters. Please contact rmaldonado@grsm.com should you have any questions or concerns.


[1] Workers’ Compensation Medicare Set-Aside Reference Guide., Version 2.9, January 4, 2019.

CMS Proposes to Cover Acupuncture for Chronic Low Back Pain for Medicare Beneficiaries Enrolled in Approved Studies

On July 5, 2019, CMS issued a proposed decision to cover acupuncture for the treatment of low back pain in very specific circumstances.

Citing an effort to avoid opioid use, this decision would allow access to acupuncture for Medicare benefiaries who are enrolled in medical studies to allow CMS to review the data and the effect of acupuncture on the treatment of chronic low back pain.

Per the decision, CMS proposed to cover acupuncture with patients with chronic low back pain who are enrolled in clinical trials sponsored by the National Institutes of Health (NIH) or in a CMS approved study. Furthermore, the rule indicates that the aforementioned studies must address and adhere to the following:

  • Enrollment of Medicare beneficiaries based on broad eligibility criteria to maximize diversity and minimize intentional or unintentional exclusions based on risk, multi-morbidity, age, health literacy, demographics, or expected adherence.
  • For the purpose of this decision, chronic low back pain (CLBP) is defined as:
    • lasting 12 weeks or longer;
    • nonspecific, in that it has no identifiable systemic cause (i.e., not associated with metastatic, inflammatory, infectious, etc. disease);
    • not associated with surgery within 12 weeks of enrollment in the study; and
    • not associated with pregnancy.
  • A minimum 12-week acupuncture intervention versus usual care or other intervention for chronic low back pain.
  • Endpoints must be measured at 12 weeks, 6 months, and 12 months after enrollment, with comparison to usual care, or other planned comparator arm.  
  • The protocol design must incorporate rigorous controls, prospectively identified, preferably by randomization.  If another method is used to generate the comparison group, it should provide comparable rigor.
  • Be consistent with for the Standards for Reporting Interventions in Controlled Trials of Acupuncture (STRICTA) guidelines.

In summary, CMS has been actively working towards their agenda of fighting the opioid crisis through policy. However, although this is certainly a move in the right direction, this benefit will not be immediately seen for most beneficiaries. Unless prescribers begin to refer to clinical studies that meet the above mentioned qualifications, this treatment will still not be covered until a second decision is made upon the review of the data collected from clinical studies.

To read the notification in its entirety, the link can be found here.

The GRSM Medicare Compliance Group will continue to monitor this, and other coverage matters. Please contact rmaldonado@grsm.com should you have any questions or concerns.

CMS Issues Updated Section 111 NGHP User Guide Version 5.6

On July 1, 2019, CMS issued an updated version of the of the MMSEA Section 111 NGHP User Guide. The latest version of the User Guide provides some much needed clarity as to the submission of multiple claim files per reporting quarter. GRSM has received numerous inquiries regarding the submission of multiple claim input files per quarter, and in light of potential misinformation disseminated by various other Section 111 service providers, these updates come at an opportune time.

CMS did not change the fact that an RRE can submit more than one claim input file per quarter. Rather, Ch. II, Sect. 4.2.2 of the User Guide now states that Responsible Reporting Entities (RREs) should submit one Claim Input file per quarter but also provides in Ch. IV that under appropriate circumstances RREs may submit multiple files within a single quarter. The User Guide specifically states that the primary purpose for multiple submissions in a quarter is to permit RREs to provide ORM termination updates in an expedited manner. An RRE may want to submit more than one claim file per quarter for a number of reasons. For example, in order to trigger a conditional payment notice/letter to aid in the recovery process, an RRE may want to submit an off-cycle claim input file; or to avoid receiving a late flag for timeliness, an RRE may want to submit TPOC or ORM termination information off-cycle.

A full list of the updates made to the latest version of the User Guide is as follows:

– Ch. II of the User Guide added clarity regarding the submission of multiple claim input files. As discussed above, Ch. II Sect. 4.2.2. now states that “RREs should submit one Claim Input file per quarter. Please See CH. IV: Technical Information for more information.” (pg. 4-10).  Whereas this same section previously stated that “File submitters can only submit one Claim Input File on a quarterly basis for each RRE ID.”

– Ch. IV of the User Guide now states that the retention period for downloading response files from the Section 111 site has been updated from 180 days to 60 days (Sect. 10.3 and 10.4).

– RREs can now download the latest PC/server version of the HIPAA Eligibility Wrapper (HEW) software from the Section 111 MRA application, which is compatible with Windows 10. (Sect. 9.3 and 10.4).

– RREs using the HTTPS file transmission method can only upload files with the extension of .txt. Other file types will generate an Invalid Error message (Sect. 9.3 and 10.4). – Finally, Ch. V now provides the same update mentioned above in Ch. IV regarding downloading the HEW software, i.e. RREs can now download the latest PC/server version of the HIPAA Eligibility Wrapper (HEW) software from the Section 111 MRA application.

Version 5.6 of the NCHP Section 111 User Guide can be downloaded here (link https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/NGHP-User-Guide/NGHP-User-Guide.html).

The GRSM Medicare Compliance Group will continue to follow all trends and updates issued by CMS and provide you with the latest updates. If you would like to discuss these updates, or Section 111 Reporting in general, please contact our Section 111 Reporting team at CMSReporting@grsm.com.

CMS Issues Final Rule Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses

On May 23, 2019, CMS issued a final rule regarding Part D expenses and the Agency’s ongoing efforts in lowering the cost of prescription medications for its beneficiaries.

Per the rule, CMS reports that this final rule amends the Medicare Advantage (MA) program (Part C) regulations and Prescription Drug Benefit program (Part D) regulations to support health and drug plans’ negotiation for lower drug prices and reduce out-of-pocket costs for Part C and D enrollees.

CMS then goes on to outline the major provisions of the new rule. Per the announcement there are 5 provisions that CMS plans to implement. They are as follows:

1.) Providing Plan Flexibility to Manage Protected Classes:

According to CMS, except in limited circumstances, current Part D policy requires Part D sponsors to include on their formularies all Part D drugs in six categories or classes: (1) antidepressants; (2) antipsychotics; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics. The new proposed rule provides for three exceptions to this protected class policy that would allow Part D sponsors to: (1) implement broader use of prior authorization (PA) and step therapy (ST) for protected class Part D drugs, including to determine use for protected class indications; (2) exclude a protected class Part D drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, and (3) exclude a protected class Part D drug from a formulary if the price of the drug increased beyond a certain threshold. This rule is purported to be effective as of January 1, 2020.

2.) Updates to Part D E-Prescribing Standards

The requirement for this provision is that Part D plan sponsors implement an electronic real-time benefit tool (RTBT) capable of integrating with at least one prescriber’s electronic prescribing (eRx) system or electronic health record (EHR). According to CMS, this would support interactive real-time standards whenever feasible, and for standards that improve the cost-effectiveness of the Part D benefit. This provision would not go into effect until January 1, 2021.

3.) Medicare Advantage and Step Therapy for Part B Drugs

CMS indicated that in this final rule, CMS is reaffirming Medicare Advantage plans’ existing authority to implement appropriate utilization management and prior authorization programs (meaning policies and procedures) for managing Part B drugs to reduce costs for both beneficiaries and the Medicare program.

4.) Part D Explanation of Benefit

With this new rule, CMS is requiring the inclusion of negotiated drug pricing information and lower cost alternatives in the Part D Explanation of Benefits beginning on 01/01/2021. CMS cites its ongoing goal to be more transparent for beneficiaries’ which hypothetically would in turn create more competition and therefore lower costs.

5.) Prohibition Against Gag Clauses in Pharmacy Contracts

This rule also implements the statutory requirement that restricts Part D sponsors from prohibiting or penalizing a pharmacy from disclosing a lower cash price to an enrollee. Again, this is purported to help lower out-of-pocket costs of prescription drugs for Medicare beneficiaries by helping inform them about lower cost alternatives.

In summary, CMS has been actively working towards their agenda of lowering prescription medicines for beneficiaries. However, considering that these rules are set to be enacted in 2020 and some even in 2021, it may be some time before beneficiaries see the benefits of such provisions.

To read the notification in its entirety, the link can be found here.

The Gordon & Rees Medicare Compliance Group will continue to monitor this case and bring you updates as they become available. Please contact me at (412) 588-2283 or rmaldonado@grsm.com should you wish to discuss this or any other Medicare Secondary Payer matters.

Gordon Rees Scully Mansukhani Becomes First 50-State Law Firm

With 68th office opening, Gordon Rees Scully Mansukhani expands reach, services to every state.

Gordon Rees Scully Mansukhani (GRSM) has opened its 68th office, creating the world’s first 50-state law firm.

Name partner Miles Scully heralded the move as a game-changing moment in the legal services industry. “As the first and only law firm to feature offices in all fifty states, we are poised to meet our clients’ needs whenever or wherever they may arise. Our deep bench of talented lawyers coupled with our forward-thinking use of technology enables us to lead the industry in providing efficient and cost effective representation virtually anywhere in the country.”

Managing partner Dion Cominos added, “With an already established national platform, the firm was well-positioned to take the next step of providing full territorial coverage throughout the United States. This milestone represents both the culmination of our journey toward becoming a truly national firm, and the next chapter in a new era of delivering seamless and comprehensive legal services to clients on a nationwide basis.”

Since its founding 45 years ago in San Francisco, GRSM has strategically expanded across the nation, opening offices in markets critical to its clients. And as the firm’s clients have continued to consolidate, grow in size, and span additional industries, GRSM has grown to match and service their needs – initially on the west coast, and eventually throughout the country. The full list of GRSM’s offices and local contacts can be found here.

The firm’s strong growth was recognized by The American Lawyer in 2018, which named GRSM number 103 in top grossing law firms, moving up seven spots from the previous year. Law360 recognized the firm as the 40th largest in the United States in its annual rankings by domestic attorney headcount. The firm was also recognized among the top 45 for diversity on The American Lawyer Diversity Scorecard.

GRSM is a national litigation and business transactions firm with more than 900 lawyers providing full service representation to public and private companies ranging from the Fortune 500 to start-ups. Founded in 1974, GRSM is recognized among the fastest growing and largest law firms in the country.

Highlights of Resulting Media Coverage:
Bloomberg Law, April 15, 2019
Law360, April 15, 2019 (subscription may be required)

Contacts
Dion N. Cominos
Miles D. Scully

CMS Announces Webinars for Upcoming Enhancements to the Medicare Secondary Payment Recovery Portal (MSPRP) and Commercial Repayment Center Portal (CRCP)

CMS  announced two webinars for Upcoming Enhancements to the Medicare Secondary Payment Recovery Portal (MSPRP) and Commercial Repayment Center Portal (CRCP).

More to the point, the webinars will be addressing the fact that that effective April 1, 2019, electronic payment functionality will be added to both the MSPRP and the CRCP.  Taking place on March 13, 2019 for MSPRP users and March 14, 2019 for CRCP users, the webinars will provide more information on this new feature.

Practitioner’s Note: This enhancement could make paying outstanding Medicare conditional payments so much easier for debtors. Instead of sending a check and ensuring it’s applied to the proper claim, this function will hopefully give payers assurance that payment has been received and applied in a prompt manner and cut down on error when applying payments to claims that are not in final demand status. Additionally, it may be interesting to see how this may impact refunds as well.

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

Medicare Coverage App Launches eMedicare

Yesterday CMS announced a new app to display what Medicare Part A & B covers. Per the announcement, “The new ‘What’s Covered’ app lets people with Original Medicare, caregivers and others quickly see whether Medicare covers a specific medical item or service. Consumers can now use their mobile device to more easily get accurate, consistent Original Medicare coverage information in the doctor’s office, the hospital, or anywhere else they use their mobile device.” Unsurprisingly, CMS discussed the need for this app as questions about what Medicare covers are some of the most frequent inquiries that CMS receives.

Interestingly, this app also is reported to enable beneficiaries to connect their claims data to applications and tools developed by innovative private-sector companies to help them understand, use, and share their health data.

As discussed previously, this innovation is in line with the directive from the current administration to move toward more electronic access in regards to healthcare. Specifically, this program is called eMedicare, and some of the purported goals are to allow beneficiaries to examine all available plans and see how different coverage choices will affect out-of-pocket costs.

Practitioner’s Note: This app could be extremely beneficial to beneficiaries who have had a MSA approved and are attempting to appropriately spend down their funds. Additionally, it will be interesting to see if the next version of this new app will include the option to compare Part C plans. Considering the narrative, ease of comparing different Part C plans appears to be an important part of the eMedicare program. However, this does beg the question what exactly is the “health data” they aim to share? 

The Gordon & Rees Medicare Compliance team will continue to follow these trends and update you as new developments arise.

The Ghost of Cases Past – MSPA Claims LLC, v. Scottsdale Insurance Co.

For those familiar with the slew of MSP Recovery cases that have been ruled upon in the past six (6) months, it will come as no surprise that another court, specifically the United States District Court for the Southern District of Florida, found that MSPA Claims LLC lacked standing when bringing suit against the Defendant.

Echoing the recently decided cases brought by MSP Recovery and its subsidiaries, the Court again in MSPA Claims v. Scottsdale Insurance found that Plaintiff lacked standing as proof of assignment of rights was not present and as such, granted Defendant’s motion for dismissal. Facts that are almost identical to MSPA Claims 1, LLC v. Ocean Harbor and MSPA Claims 1, LLC. v United Auto. Ins. Co., 204  F. Supp. 3d 1342, 1345 (S.D. Fla. 2016), Plaintiff asserted rights were assigned from Florida Healthcare Plus to La Ley Recovery which then assigned rights of recovery to MSP Recovery. The Court disagreed and specifically noted that although Plaintiff argued Florida Healthcare Plus approved assignment to La Ley to MSPA Claims, prior to receivership, the assignment did not predate the receivership. More pointedly, the Court stated it “is unclear how Florida Healthcare Plus could have approved the assignment…valid if MSP Claims was not yet formed as a company in 2014 when the receiver took over Florida Healthcare Plus[1].”

As such, the Court granted Defendant’s motion for dismissal without prejudice.

With yet another ruling dismissing a claim brought by MSP Recovery, the Floridian courts appear to sharpen their scrutiny regarding cases brought by assignees of rights by Medicare Advantage Plans. The pressing question however, is will other jurisdictions look to these cases as persuasive case law in their own courts? The Gordon Rees Medicare Group will continue to monitor these cases and bring you updates as they become available.


[1] MSPA Claims 1. LLC v. Scottsdale Ins. Co., 2018 U.S. Dist. LEXIS 218675

CMS Issues updated Section 111 NGHP User Guide

As of January 4, 2019, CMS has issued an updated version of the MMSEA Section 111 NGHP User Guide. While version 5.5 of the User Guide has few changes, there are some noteworthy additions. The changes made to the latest version of the User Guide are as follows:

– Ch. III of the User Guide now clarifies that beginning January 1, 2019, the threshold for liability insurance settlements, judgments, awards, or other payments will remain at $750. CMS will also maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals. This is outlined in Section 6.4 of Ch. III and in short, simply restates the fact that the TPOC dollar thresholds remain at $750 for liability, no-fault, and workers’ compensation insurance.

– The definition of the ‘Funding Delayed Beyond TPOC Start Date 1’ data field has been updated. This definition can be found in line 82 of Table A-3 and states “If funding is determined after the settlement date (TPOC Date), provide actual or estimated date of funding determination.” The previous definition simply stated “If funding for the TPOC Amount is delayed, provide actual or estimated date of funding.” The same verbiage has been added to lines 95, 98, 101, and 104 of Table A-5 Auxiliary Record, updating the definition of this field for all possible additional TPOCs (TPOCs 2 – 5).

– Ch. IV of the User Guide also provides updated versions of the excluded ICD-9 and ICD-10 tables in order to match the excluded lists that are available through the Section 111 MRA application (https://www.cob.cms.hhs.gov/Section111). These tables can be found in Appendices I and J.

– Lastly, version 5.5 of the User Guide has been updated to only include information from the last four User Guide releases in order to reduce the number of version and revision history pages.

Each chapter of the Section 111 NGHP User Guide, version 5.5 can be downloaded here.

Should you have any questions regarding the above or need any Medicare compliance assistance, please do not hesitate to contact Gordon & Rees Medicare Compliance Group at mstockdale@grsm.com or 412-588-2277