RIMS, the Risk Management Society Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

Targeted News Service

WASHINGTON, May 12 -- Laura Langone, president of RIMS, the Risk Management Society, New York, 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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RIMS, the Risk Management Society(R) ("RIMS"), provides these comments to the Centers for Medicare & Medicaid Services ("CMS") on the referenced proposed rule,/1 which addresses certain Civil Money Penalties ("CMPs") established by Section 111(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 ("Section 111"), as amended by the SMART Act./2

Section 111 requires responsible reporting entities ("RREs") for certain health and non-health plans to periodically provide certain information where Medicare is a secondary payer to the plan. RIMS, the preeminent organization dedicated to promoting the profession of risk management, is a global not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities throughout the world. Its members would be significantly affected by the proposed pule in its current form. RIMS is concerned about the proposed rule's: failure to expressly incorporate into its CMP provisions, several mitigating factors that are in the current regulation; proposed 5-year statute of limitations (3 years is more appropriate and legally justified); non-group health plan error rate threshold; and penalties for retroactive termination of Ongoing Responsibility for Medicals.

Detailed Comments

Section 111 requires RREs to provide information on two classes of plans: (1) group health plans ("GHPs"), and (2) workers' compensation plans, liability insurance (including self-insurance), and no-fault insurance (collectively, non-group health plans, or "NGHPs"). There are penalties for "'noncompliance' with CMS's reporting requirements include[ing] failure to--

(1)report when an entity is required to report; (2) report all Medicare beneficiaries who are/were plan participants (GHP) or claimants (NGHP); and (3) report when medical care was either claimed or released (as part of a settlement, judgment, award, or other payment)."

* Regarding GHPs, Section 111 imposes on an entity, a plan administrator, or a fiduciary a mandatory penalty of $1,000 for each day of noncompliance with respect to each individual for which the required information should have been submitted./3

* Regarding NGHPs, Section 111 imposes on an applicable plan a penalty of up to $1,000 for each day of noncompliance with respect to each claimant for which the required information should have been submitted./4

Mitigating Factors

The proposed rule states in the preamble that CMS will consider mitigating circumstances during a written "pre-notice" process, after receiving a second "informal" notice, and during what appears to be a third period. But it should be made clear that in assessing CMPs for either GHPs or NGHPs pursuant to proposed rule section 401.105(b)-(c), mitigating factors should be considered. Because 42 C.F.R. Sec. 402.111(b)(2) requires mitigating factors to be used in determining the amount of a CMP, we urge CMS to add to proposed rule section 402.105(b)-(c) an explicit reference to incorporate Section 402.111, so there is no doubt as to its applicability.

Sliding Scale Penalties

CMS is not proposing to rely on the intent of the NGHP entity in assessing penalties and has instead proposed an increase in penalty amount based on the number of infractions. CMS has asked for comment. For NGHP entities, the proposed rule provides a sliding scale of $250 (25% of $1,000, before adjustment for inflation) for an initial penalty amount, with an increase of $250 each for the next three penalty amounts, culminating in a penalty amount of $1,000 per day per claimant. There also is a reduction in penalty amount of 25% if the entity remains below any error tolerances, down to a minimum penalty of $250 per day per claimant if the entity remains in compliance for three consecutive quarters. That is a reasonable approach, especially given that the penalty reduction provisions reflect a reporting entity's good faith intention to resolve any shortcomings in reporting.

Statute of Limitations

CMS proposes a 5-year statute of limitations, relying on the limitations period set forth in 28 U.S.C. Sec. 2462. In the context of civil fines, Section 2642 applies only when a "civil fine, penalty or pecuniary forfeiture is prescribed for the violation of an Act of Congress without specifying the mode of recovery or enforcement thereof," in which case it "may be recovered in a civil action."/5

(Emphasis added.) But the statute that governs Medicare Parts A and B payments when Medicare is a secondary payer, both in connection with GHPs and NGHPs,/6 provides a "mode of recovery or enforcement" for a responsible party's failure to make payment. Specifically, the enforcement provisions that apply to GHPs and NGHPs state that 42 U.S.C. Sec. 1320a-7a(k), regarding civil monetary penalties in the Social Security context, applies./7

Subsection (k) permits the Secretary of Health and Human Services to seek from a federal district court an injunction "or other appropriate relief" to protect a person's assets needed to pay a civil monetary penalty. But there is a 3-year statute of limitations to file for that relief,8 so that is the appropriate period - not 5 years. Moreover, the limitations period should begin on the first date of the reporting failure.

Proposed CMPs for NGHPs Based Upon Error Rate Thresholds

Regarding the 20% error tolerance threshold for a NGHP's failure to comply with reporting instructions (proposed rule section 402.1(c)(22)(iii)), we are concerned that the requirement could inadvertently snag plans that have a low volume of reports. This could also implicate certain ICD-10 codes that CMS often rejects as erroneous even when the plan believes the codes are accurate. Therefore, we urge CMS to add a minimum claim threshold to the error tolerance threshold and that only "material" fields be used to calculate the 20% error tolerance rate.

Withdrawal of Penalties for Retroactive Termination of Ongoing Responsibility for Medicals ("ORM") Reporting

Proposed rule sections 402.1(c)(21)(ii) and (c)(22)(ii) would impose a CMP on a GHP or a NGHP if it were to contradict its ORM reporting in response to CMS recovery efforts. The ORM policies have never been fair or workable. Industry representatives have advised CMS of this fact for over five years, yet CMS has not updated its ORM termination policies. We urge CMS to withdraw those CMP triggers.

Proposed "Safe Harbors" for NGHPs

We support CMS's efforts to establish certain "safe harbors" for NGHPs where a plan fails to report because of its inability to obtain certain identification information from an individual following "good faith efforts" to obtain the information. But it is important that the plan not be required to attempt to contact the individual too many times, as some individuals are simply afraid to turn over certain personal information. We request that the plan be required to request the information from the individual (or his attorney or representative) only once via either phone, mail, or electronic means (the latter only if the individual has consented pursuant to the E-SIGN Act)./9

Finally, we support enforcing the final rule prospectively only, that is, based on reporting files an RRE submits after the final rule's effective date. And we agree there should be a moratorium for two reporting periods on enforcement after any change in CMS's reporting policy or procedural change.

We appreciate the opportunity to provide these comments. Please contact Whitney Craig at [email protected] if you have any questions or need more information.

Sincerely,

Laura Langone, JD, MBA

RIMS President

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Footnotes:

1/ 85 Fed. Reg. 8793 (Feb. 18, 2020).

2/ Pub. L. No. 110-173, 121 Stat. 2497, codified at 42 U.S.C. Sec. 1395y(b)(7)-(8).

3/ 42 U.S.C. Sec. 1395y(b)(7)(B)(i). Unlike with NGHPs, the SMART Act did not change the CMP provisions in 42 U.S.C. Sec. 1395y(b)(8) for group health plans ("GHPs"); those plans are subject to mandatory CMPs of $1,000 for each day of noncompliance per individual for whom submission of information is required. 85 Fed. Reg. at 8795.

4/ 42 U.S.C. Sec. 1395y(b)(8)(E). A claimant is an individual who has filed a claim directly against a NGHP as well as an individual filing a claim against an individual or entity insured or covered by a NGHP. 42 U.S.C. Sec. 1395y(b)(8)(D).

5/ 28 U.S.C. Sec. 2461(a).

6/ 42 U.S.C. Sec. 1395y(b)(2).

7/ 42 U.S.C. Sec. 1395y(b)(7)(B)(i), (b)(8)(E)(i), respectively.

8/ 42 U.S.C. Sec. 1395y(b)(2)(B)(iii).

9/ 15 U.S.C. Secs. 7001 et seq.

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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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