Marriott International Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, May 13 -- Steve Perroots, vice president for global claims at Marriott International, Bethesda, Maryland, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Medicare Program: Medicare Secondary Payer and Certain Civil Money Penalties". The comment was written on April 20, 2020, and posted on May 11, 2020:

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Marriott Claims Services is writing to share our comments on the February 18, 2020, Proposed Penalty Rule under the Section 111 reporting requirements of the Medicare Secondary Payer laws. The proposed rule, published at 85 Fed. Reg. 8793 (Feb. 18, 2020), would impose substantial penalties on Marriott and thousands of other companies across the country for technical reporting mistakes. We believe that the proposal is far too sweeping and overbroad, and will inappropriately penalize companies like ours that have invested significant sums of money, time and effort to attempt to comply with Medicare's expansive and detailed reporting requirements. We are particularly troubled that the proposed rule does not explicitly incorporate the mitigating factors found in existing regulation, and appears to be focused on technical reporting accuracy, rather than good faith efforts to comply with the reporting requirements. We urge the Agency to significantly amend the proposal before finalizing any regulation.

We self-handle our claims, and we report thousands of claims each quarter. We have and will continue to devote significant resources to achieve compliance in this area, and believe this proposed rule will put us in the untenable position of not being able to be in compliance going forward.

Before commenting on the specific provisions of the proposed rule, we wish to put our efforts, and those of other non-group health plans, in context. More specifically, many of the reporting requirements imposed by CMS though its Manual are foreign to us, and to the claims adjusters that navigate our claims. Our adjusters often are unfamiliar with the codes that CMS insists we report. They also do not collect a lot of the other information that CMS requires for both identifying individuals as beneficiaries, or, if they are beneficiaries, submitting full Section 111 reports. The "ORM" process is foreign to adjusters and our company, and it only exists for purposes of the Medicare program. While the industry has asked Medicare to create a reporting system that liability, workers compensation, and no fault insurers can actually implement, the Agency has not given sufficient consideration to what insurers and self-insureds (and their adjusters) do and how they work, and has instead created a reporting system as if insurers and self-insureds were hospitals and group health insurers (which we are not).

Now in the Proposed Rule, CMS proposes to penalize us for not collecting or inaccurately reporting information that we never had to collect, and that is not a part of our business. The Section 111 process generally, and this proposed rule specifically, contradict the Administration's commitment to reducing regulation, and to putting people over paperwork. Instead, the proposed rule puts paperwork over people, and proposes to penalize companies who have done the right thing and invested considerable amounts to meet arbitrary Medicare reporting standards that were never the subject of through notice and comment rulemaking. In our view, this is unfair, arbitrary and capricious.

Rather than focusing on penalties for technical reporting mistakes, we urge the Agency to withdraw the rule, simplify the reporting system so that non-group health plans can accurately report with the information we normally collect, and then propose a penalty rule that focuses on how Medicare will catch and penalize those ignoring the law, rather than companies like ours who are trying our best to comply. That would be fair, and proportionate, to the obligations that CMS has inappropriately placed on insurers and self-insureds through the Section 111 Reporting Manual, and the extensive work we have undertaken to comply with the guidance.

In addition to our comments above, we offer the following comments on specific provisions of the proposal:

I. Legal Considerations.

The proposed rule, if implemented, would result in penalties of hundreds of thousands of dollars on entities that have failed to report, or have incorrectly reported, claims for which there may be very little owed to the Agency, or involve claims for which few if any Medicare payments were ever avoided. The proposed penalties lack any proportion to the underlying amounts at issue, which we understand raises serious legal concerns. We also understand the ways in which CMS has chosen to implement the penalty process violates the Medicare law's notice and comment requirements and the MSP law as well. We incorporate by reference the MARC Coalition's analysis and comments on the legal issues, as well as the other points raised in MARC's comment letter.

II. Absence of Sliding Scale Factors

The Proposed Rule is also flawed in that it fails to incorporate (directly or by reference) the sliding scale penalty factors that are key to any civil monetary penalty regime. As CMS acknowledges, the industry's comments during the Advanced Notice of Proposed Rulemaking specifically urged the Agency to incorporate such sliding scale factors, as Congress intended when it modified the penalty provisions to limit penalties to "up to" specified amounts. CMS has offered no reason not to do so. We urge the Agency to include in the Final Rule specific good faith provisions (such as those found in 42 C.F.R. Sec. 402.111) that address:

(1) The nature of the reporting error and the circumstances under which a report was or was not made;

(2) The degree of culpability, history of prior offenses, and financial condition of the person obligated to report;

(3) The resources available to the person obligated to report;

(4) Such other matters as justice may require, including the circumstances of the incident such as the period of time involved, whether a pattern of conduct is involved, the amount at issue, prior history of the reporting entity, evidence of intentionality;

(5) Mitigating circumstances including the number of reports at issue, whether the reporting issue was the result of an unintentional and unrecognized error in the process of presenting reports, whether the reporting entity took corrective steps promptly after discovering the error, and other circumstances of an aggravating or mitigating nature are taken into account if, in the interests of justice, they require either a reduction of the penalty or assessment or an increase in order to ensure the achievement of the purposes of this part.

We believe that including these factors in the final regulation would not only correct an unfairness in the proposed rule, but would encourage the reporting policies that CMS wants to advance.

RECOMMENDATION: We urge CMS to explicitly incorporate the factors in 42 C.F.R. Sec. 402.111 into the Section 111 Penalty Regulation at Section 402.105.

III. CMS Should Withdraw the Proposed Penalties for Retroactive ORM Termination.

The Agency proposes to issue penalties for each day an ORM report is kept open if the Agency seeks a conditional payment recovery and we discover that the ORM report should have been terminated earlier. This is grossly unfair, and runs the risk of creating penalties of hundreds of thousands (or even millions) of dollars for claims involving small amounts of money. More specifically, under the Agency's proposal, a retroactive ORM termination going back two years would result in over a million dollars of penalty. This is grossly unfair, arbitrary, capricious and a violation of law. We urge CMS to withdraw this proposal immediately.

As CMS knows, it's ORM policies have never been fair or workable. The MARC Coalition has advised CMS of this fact for over five years. Yet, CMS has not updated its ORM Termination policies, which only provide as follows:

An ORM termination date should not be submitted as long as the ORM is subject to reopening or otherwise subject to an additional request for payment. An ORM termination date should only be submitted if one of the following criteria has been met:

* Where there is no practical likelihood of associated future medical treatment, an RREs may submit a termination date for ORM if it maintains a statement (hard copy or electronic) signed by the beneficiary's treating physician that no additional medical items and/or services associated with the claimed injuries will be required;

* Where the insurer's responsibility for ORM has been terminated under applicable state law associated with the insurance contract;

* Where the insurer's responsibility for ORM has been terminated per the terms of the pertinent insurance contract, such as maximum coverage benefits./1

As we have repeatedly advised CMS, its standard that the treating physician provide a letter is completely unworkable, in that doctors exceedingly rarely write such letters, even years after the last treatment related to an accident or injury has been made. Further, as we have advised CMS, we regularly "administratively close" claims files consistent with industry practice, and there are numerous instances in which the claim file will not be reopened (and cannot be reopened given the sheer volume of claims we handle) to check whether ORM is correctly reported or terminated. In sum, CMS has not provided the appropriate standards that would allow us to terminate ORM when we administrative close claims files.

Some companies try to set "automated" ORM termination systems, while others have a manual process when an event occurs requiring reopening of an administratively closed file. Either way, the CMS parameters for closing ORM are inappropriately narrow. Now the Agency proposes penalizing parties who appropriately look back to close ORM. This is per se arbitrary and capricious. For these reasons, the ORM penalty proposal must be withdrawn.

RECOMMENDATION: We urge CMS to withdraw proposed section 402.1(c)(22)(ii).

IV. The Proposed Penalties for Based Upon Error Rate Thresholds Must be Revised

CMS has proposed in section 402.1(c)(22)(iii) to issue penalties to RREs who fail to accurately report 80% of their claims in four ought of eight quarters. We appreciate that CMS has set an appropriate erroneous reporting threshold that will capture few RREs, including us, yet we are still concerned that the "gotcha" nature of this proposal will inadvertently capture "low volume" reporters, and may implicate certain ICD-10 codes that are repeatedly rejected by CMS as erroneous even when, to the best of Reporting Entities' knowledge, they are accurate. We recommend a minimum claim threshold be added to this proposal, and that only "material" fields be used to calculate the 20% field rejection rate.

RECOMMENDATION: Given the above, we request that CMS amend proposed section 402.1(c)(22)(iii) to have it apply only to RREs reporting a minimum of 1,000 reports each quarter. Further the regulation should be amended to explicitly limit the error threshold to misreporting of the 20 most significant data fields required by CMS to identify a conditional payment situation and which are currently not subject to high error rates.

V. The Proposed "Safe Harbor" for Data Collection from Beneficiaries Who Refuse to Provide Information Should Be Modified The Proposed Rule includes an exemption for those situations where a beneficiary refuses to provide needed information to an RRE for reporting. We appreciate and support this proposal, but recommend that the Agency not be proscriptive in the number of "touches" that a reporting entity must make (and how they must be made). Our customers are very sensitive in supplying private and health information to us, and they can become angry and frustrated when repeatedly asked for the same information after they have made clear that they will not provide it. This could trigger customer complaints for violations of the privacy laws, insurance laws, or other consumer protection statutes. Further, the insurance industry is trying to reduce the number of "touches" that claims professionals need to have with claimants, and this CMS rule directly undermines that policy.

We request that CMS eliminate a mandatory minimum number of communications with beneficiaries, and instead simply require that the RRE make good faith efforts under the circumstances to try secure needed reporting information. CMS can list it's "two letter and one other contact" standard in the Final Rule preamble as a helpful guide to what the Agency will be looking for when attempting to collect the needed information.

RECOMMENDATION: We request that CMS eliminate section 402.1(c)(22)(iv)(A)(2), and that it simply reference the "two written requests and one phone or other request" standard in the preamble to the Final Rule as an example of the type of effort CMS expects from an RRE in normal circumstances.

VI. CMS Must Adopt a Three Year Statute of Limitations

CMS proposes to apply a five year statute of limitations to its penalty collection activities, based upon 28 U.S.C. Sec. 2462. The applicable statute of limitations, however, should be three years, as memorialized by Congress through the SMART Act. 42 U.S.C. Sec. 1395y(b)(2)(B)(3). In addition, the preamble to the Final Rule should clarify that the limitations period runs from the first date of non-reporting.

VII. Other Comments

There are several other comments we wish to share. First, we agree that the proposed penalties should only be applied prospectively from the date of the Final Rule, and that all proposed penalties apply only after a one year compliance period from the date a report was first due. We also support the six month enforcement moratorium in response to any agency change in policy, which will allow us the time to implement Agency changes.

VIII. Conclusion

We appreciate the Agency's consideration of these comments, and welcome any further questions that the Agency may have. Please contact Steve Perroots at 301-380-7499, if you have any questions or request any further information regarding these comments.

Thank you,

Steve Perroots

Vice President

Global claims

Marriott International

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Footnote:

1/ See NGHP Reporting Manual (version 5.8, last updated January 2020), Section 6.3.2, available at: https://www.cms.gov/files/document/mmsea-111-january-31-2020-nghp-user-guide-version-58-chapter-iii-policy-guidance.pdf

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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2013-0266-0037

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