Medical Mutual Alerts Insureds to CMS Notice on Risk Management Write-Offs
Medical Mutual Insurance Company of Maine recently sent a letter to its insureds with the following message about risk management write-offs.
As part of the implementation of the Medicare Secondary Payer Mandatory Reporting Provisions in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (See 42 U.S.C. 1395y(b)(7)&(8)), CMS has recently formalized its opinion regarding how write-offs or the provision of something of value to Medicare beneficiaries must be handled and reported by healthcare providers. A copy of the CMS Alert is attached for your review.
If you are engaged in “writing-off” or reducing a bill, or if you provide something of value (e.g. cash, gift card, etc) to a Medicare beneficiary outside a formal claims process reported to Medical Mutual Insurance Company of Maine, then according to CMS you are “self-insured” for that activity, if it is in response to either a medical incident or patient dissatisfaction.
This new reporting obligation begins with any write-off or payment made to a Medicare beneficiary on or after October 1, 2010.
Non-compliance with Section 111 reporting will result in a penalty of $1,000 for each day of non-compliance with respect to each incident involving each Medicare beneficiary.
The only way in which a healthcare provider can fall outside the reporting requirement is to submit a claim to Medicare reflecting the unreduced permissible charges and also showing the amount of the reduction provided or write-off as a payment from self-insurance. If you confine your write-offs for Medicare beneficiaries to this specific billing procedure, then you do not have to separately report this write-off or payment.
However, if there is any evidence, or a reasonable expectation, that the patient has sought or may seek additional medical treatment from any other healthcare provider as a consequence of the underlying incident, the healthcare provider must report the write-off, payment, reimbursement or property of value (like a gift card), as a TPOC (Total Payment Obligation to the Claimant) from self-insurance.
For the next several years, if the value of the write-off or payment is less than the TPOC reporting threshold listed below, it does not need to be reported.
Present TPOC Reporting Thresholds.
• 10/01/2010 through 01/01/2012 $5,000
• 01/01/2012 through 12/31/12 $2,000
• 01/01/13 through 12/31/13 $600
• After 12/31/13 No threshold applies
Therefore, for almost all of our insureds, there is a reasonable time period to develop procedures necessary to comply with Section 111, as I believe most write-offs or payments undertaken by our insureds outside their policy with Medical Mutual would be well within the initial reporting threshold of $5,000.
If you have any expectation that your practice may be in the position of deciding to write-off bills, reimburse money or even provide property of value (like a gift card) to a Medicare beneficiary as a consequence of a medical incident, you need to:
• Educate yourself: www.cms.hhs.gov/MandatoryInsRep.
• Consider consulting your corporate counsel or the medical or hospital association in your state for further advice.
• Register as a reporting entity (RRE) with CMS.
• Become familiar with the Direct Data Entry (DDE) option for small reporters.
Our policyholders can always discuss these situations with Medical Mutual’s Claims Department. However, remember that liability insurance is not “no-fault” insurance and Medical Mutual’s decision on whether or not to make a payment to any claimant will be based on a review of the medicine, including negligence and causation. Also, if Medical Mutual agrees to make such a payment to a claimant, it is possible that the involved physician will need to be reported to the National Practitioners Data Bank.
I am hopeful that all of you will be hearing directly from CMS regarding this new reporting obligation. However, since to my knowledge this has not yet occurred, I felt it necessary to give all of you a heads-up regarding this issue. If you would like to discuss this issue further with someone from Medical Mutual, please feel free to contact either our Claims or Risk Management Departments.
The MMA thanks Medical Mutual for alerting us to this issue.
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