Latest Changes to Mandatory Reporting Hint Civil Money Penalties are Just Around the Corner

Rafael Gonzalez, Esq., Cattie & Gonzalez, PLLC

With Mandatory Insurer Reporting (MIR) Civil Money Penalties (CMP) Code of Federal Regulations (CFR) proposed earlier this year, many Responsible Reporting Entities (RRE) are making sure their processes and systems are adequately catching and preventing errors that may make them prone to up to $1,000 per day, per file penalty. To this end, the Centers for Medicare and Medicaid Services (CMS) recently published several updates that should help payers. This article explains disposition and error codes and CMS’ latest changes published in the Liability Insurance (Including Self Insurance), No-Fault Insurance, and Workers’ Compensation User Guide (User Guide) that hint CMPs may be just around the corner.

Mandatory Insurer Reporting Civil Money Penalties Proposed

On February 18, 2020, the Department of Health and Human Services (HHS) published proposed changes to 42 CFR Part 402 and 45 CFR Part 102, establishing MIR CMP amounts and circumstances under which CMPs would and would not be imposed. The proposed rule specified how and when CMS must calculate and impose CMPs when group health plan (GHP) and non-group health plan (NGHP) RREs fail to meet their Medicare Secondary Payer (MSP) reporting obligations in any one or more of the following ways: 

• when RREs fail to register and report as required by MSP reporting requirements; 
• when RREs report as required, but report in a manner that exceeds error tolerances established by the Secretary of HHS; and 
• when RREs contradict the information the RREs have reported when CMS attempts to recover its payments from these RREs. 

43 public comments were received by the end of the public commentary period on April 20, 2020. Many of these centered around the idea that there were a number of data points reported to CMS that, if found to be incorrect, or in error, had no bearing on the real purpose and intent of RRE’s mandatory reporting responsibilities. In other words, many industry stakeholders found that there were a number of mandatory reporting components, which if reported erroneously, could add up to the 20% error threshold rather quickly, none of which would have any meaningful or consequential effect on CMS’ ability to levy appropriate CMPs.

CMS has taken these comments to heart. On November 10, 2020, CMS published changes to Chapters IV and V of the latest edition of the User Guide, Version 6.1. These changes excuse what used to be an “error,” the cause for a record to be rejected, to now become “soft” errors, no longer causing the record to be rejected, but instead requiring RREs to correct such entries and resubmit on the next RRE’s quarterly file submission. In my personal and professional opinion, this is yet another step in the MIR multi-layered sequential evaluation process that hints CMPs may be just around the corner.

Disposition Codes

On behalf of CMS, the Benefits Coordination and Recovery Center (BCRC) handles responding to RRE’s Claim Input File, by returning Claim Response File. A disposition code of ‘01’ means the record has been accepted by the BCRC in which the RRE has indicated ongoing responsibility for medical (ORM). A disposition code of ‘02’ means the record has been accepted by the BCRC, but the RRE has indicated no ORM. A disposition code of ‘03’ means the record was found to be error free, the injured party was matched to a Medicare beneficiary, but the beneficiary did not have Medicare coverage during the reported time period.

A disposition code of ‘50’ means the record is still being processed by CMS and must therefore be resubmitted on the next quarterly file submission. A disposition code of ‘51’ means the individual was not identified as a Medicare beneficiary. And then there is the dreaded disposition code of ‘SP’, in which the BCRC did not accept the record due to errors in the data reported. If over 20% of an RRE’s reported claims come back with an SP code, the proposed MIR rules would indicate the possibility of a CMP of up to $1,000 per day, per file.

Error Code Descriptions 

In general, when an RRE receives an error related to a Claim Input File Detail Record and/or a TIN Reference File Detail Record, the corrected record(s) needs to be resubmitted on the RRE’s next Quarterly Claim Input File submission. Error codes are prefaced with two letters followed by two numbers. Error codes that begin with a “C” indicate that the error occurred in the Claim Input File. Error codes that begin with a “T” indicate that the error occurred in the TIN Reference File. Here is a breakdown of what letters the error code begins with and the matter it relates to:

Error Codes and Related Information: 

-CB Claim Beneficiary Information 

-CC Claim Claimant Information 

-CI Claim Injury Information 

-CJ Claim ORM or TPOC Information 

-CP Claim Plan Information 

-CR Claim Representative Information 

-CS Claim Self-Insurance Information 

-CT Claim Auxiliary TPOC Information 

-SP Errors returned by CWF 

-TN TIN Reference File Errors 

Error Code Resolution Tables 

The Error Code Resolution Tables (Claim Response and TIN Reference Response) provide information on the error codes that an RRE may receive on its Section 111 response file(s). Each table identifies the record and field that caused the error, identifies whether or not the field is required, provides the record layout field descriptions and provides some possible causes of the error. 

I would highly recommend RREs pay close attention to Table F-4 and Table F-5 of the User Guide Chapter V Appendices Version 6.1.

Table F-4: Claim Response File Error Code Resolution Table addresses Error Codes 

• CB01-CB11 (Claim Beneficiary Information), 
• CC01-CC74 (Claim Claimant Information), 
• CI01-CI31 (Claim Injury Information), 
• CJ01-CJ07 (Claim ORM and TPOC Information), 
• CP01-CP13 (Claim Plan Information),
• CR01-CR94 (Claim Representative Information), 
• CS01-CS07 (Claim Self Insurance Information), 
• CT01-CT33 (Claim Auxiliary TPOC Information), 
• SP31-SP50 (Errors Returned by CWF), and 
• TN99 (TIN Reference File Errors).

Table F-5: TIN Reference Response Error Code Resolution Table addresses Error Codes 

• TN01-TN36 (TIN Reference File Errors).

November 10, 2020 Changes to Chapter V of User Guide Version 6.1

Clearly, not all errors are substantial so as to make the entire record rejected. For example, if claimant’s middle initial is incorrect, or if claimant’s zip code is not filled out, or if his or her telephone number may be missing a digit. But recent changes have also made it so that the wrong date of incident, or alleged cause of injury may not necessarily make the record rejected. CMS recently published changes indicating that what once would have been the cause for a record to be rejected, now will become “soft” errors, no longer causing the record to be rejected, but that would have to be corrected and resubmitted on the next RRE’s quarterly file submission. 

Starting April 5, 2021, the following changes will become effective: 

• Several Section 111 input record errors that would cause a record to reject will become “soft” errors; that is, they will no longer cause the input records to be rejected. 
• RREs, however, will continue to receive the errors on their response files, and they should correct and resubmit on their next quarterly file submission. 
• The errors include: 

-CC05 (Claimant Name Middle Initial), 

-CC11 (Claimant Zip+4 Code), 

-CC12 (Claimant Telephone Number), 

-CC13 (Claimant Telephone Number Extension), 

-CC25 (Claimant 2 Name Middle Initial), 

-CC31 (Claimant 2 Zip+4 Code), 

-CC32 (Claimant 2 Telephone Number),

-CC33 (Claimant 2 Telephone Number Extension), 

-CC45 (Claimant 3 Name Middle Initial), 

-CC51 (Claimant 3 Zip+4 Code), 

-CC52 (Claimant 3 Telephone Number),

-CC53 (Claimant 3 Telephone Number Extension), 

-CC65 (Claimant 4 Name Middle Initial), 

-CC71 (Claimant 4 Zip+4 Code), 

-CC72 (Claimant 4 Telephone Number),

-CC73 (Claimant 4 Telephone Number Extension), 

-CI02 (Industry Date of Incident), 

-CI03 (Alleged Cause of Injury, Incident, or Illness), 

-CI25 (Alleged Cause of Injury, Incident, or Illness), 

-CP03 (Office Code or Site ID), 

-CP06 (Plan Contact Department Name), 

-CP07 (Plan Contact Last Name), 

-CP08 (Plan Contact First Name), 

-CP09 (Plan Contact Phone Number), 

-CP10 (Plan Contact Phone Extension), 

-CP13 (new) (No-Fault Insurance Limit), 

-CR11 (Representative Mail Zip+4 Code), 

-CR12 (Representative Phone Number),

-CR13 (Representative Phone Extension), 

-CR14 (Representative Name/Firm Name), 

-CR31 (Claimant 1 Representative Zip+4 Code), 

-CR32 (Claimant 1 Representative Phone Number), 

-CR33 (Claimant 1 Representative Phone Extension), 

-CR34 (Claimant 1 Representative Name/Firm Name), 

-CR51 (Claimant 2 Representative Zip+4 Code), 

-CR52 (Claimant 2 Representative Phone Number), 

-CR53 (Claimant 2 Representative Phone Extension), 

-CR54 (Claimant 2 Representative Name/Firm Name), 

-CR71 (Claimant 3 Representative Zip+4 Code), 

-CR72 (Claimant 3 Representative Phone Number), 

-CR73 (Claimant 3 Representative Phone Extension), 

-CR74 (Claimant 3 Representative Name/Firm Name), 

-CR91 (Claimant 4 Representative Zip+4 Code), 

-CR92 (Claimant 4 Representative Phone Number), 

-CR93 (Claimant 4 Representative Phone Extension), 

-CR94 (Claimant 4 Representative Name/Firm Name), and 

-TN30 (Recovery Agent Zip+4 Code). 

• A new “soft” edit will be added and applied to NGHP Claim Input File Detail Record files when users submit a no-fault insurance claim where the policy limit is less than $1000.00. The input files will be accepted but a new CP13 error will be returned on the response files. Direct Data Entry (DDE) submitters will see a message on the Insurance Information page but will be able to proceed with data entry without correcting (Appendix F). 
• Claim Input File Detail Records, and Direct Data Entry (DDE) records, submitted prior to the effective date of the injured party’s entitlement to Medicare will be rejected and returned with a Disposition Code ‘03’ instead of an SP31 error.

Conclusion

CMS’ latest changes, published in the Liability Insurance (Including Self Insurance), No-Fault Insurance, and Workers’ Compensation User Guide on disposition and error codes, hint CMPs may be just around the corner. If you haven’t already, I highly recommend taking a look at these latest changes to make certain you are prepared for the next level of MSP compliance: the institutionalization of up to $1,000 per day per file civil money penalties.

About Rafael Gonzalez, Esq.

Rafael is a partner in Cattie & Gonzalez, PLLC, a national law firm focusing its practice on Medicare/Medicaid secondary payer compliance issues. He has over 35 years experience in the liability, no-fault, and work comp insurance industry. You can connect with him on LinkedIn, Twitter, Facebook, or reach him at [email protected], 844.546.3500, or www.cattielaw.com.