Attention Group Health Plans: CMS-Reporting Requirements
November 13, 2008
At the end of last year, Congress enacted Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”), which added new mandatory reporting requirements for group health plans. Effective January 1, 2009, group health plans will be required to gather and report information to help the Centers for Medicaid and Medicare Services (“CMS”) identify situations in which the group health plans are primary to Medicare. Recently, CMS posted additional guidance on its website regarding implementation of the statutory requirements, including a 136 page user guide which can be accessed at http://www.cms.hhs.gov/MandatoryInsRep/02_GHP.asp#TopOfPage.
Which group health plans must meet the reporting requirements? Covered group health plans include any plan, whether insured or self-insured, that an employer sponsors or to which an employer contributes. This definition encompasses most employer-sponsored health plans. In addition to major medical plans, group health plans appear to include self-insured reimbursement arrangements such as health reimbursement arrangements (“HRAs”) and other Section 105 medical expense reimbursement plans. However, a health flexible spending account provided through a cafeteria plan is not considered a group health plan for this purpose. Furthermore, plans covering only retirees or other former employees are not required to report.
Note: The requirements apply to plans of all types of plan sponsors, including private employers, governmental employers, non-profits and churches, and unions.
The reporting requirements will have limited impact on group health plans sponsored by small employers. When Medicare is based upon age, the Medicare secondary payer (“MSP”) rules apply only if the employer employs 20 or more employees. Thus, group health plans sponsored by employers with less than 20 employees will not be required to report information with respect to individuals who may be eligible for Medicare based upon age. Such group health plans will be required, however, to report information regarding individuals with end stage renal disease because there is no exemption from the MSP rules when an individual is entitled to Medicare on that basis.
Who must report the information? The responsibility for reporting depends on the nature of the plan.
- If the plan is fully insured, the insurance carrier is responsible for the reporting.
- If the plan is self-insured and the employer has hired a third party to administer claims under the plan, the third party administrator is responsible for the reporting.
- If the plan is self-insured and self-administered, the employer sponsoring the plan is responsible for the reporting. Under the rules, the entity responsible for reporting is referred to as the “responsible reporting entity” (“RRE”).
Note: With respect to HRAs and other Section 105 reimbursement plans, the employer will not be the RRE unless it self-administers the plan. The third party administrator hired to administer claims under the plan is the RRE.
Any RRE can appoint an agent to handle the reporting on the RRE’s behalf. If an agent will be used, information regarding the agent must be submitted as part of the registration process described below. The RRE remains solely responsible and accountable for the reporting requirements despite the use of an agent to handle the reporting.
When and how will the reporting be done? CMS will require at least quarterly submissions of electronic reports through a secure website. Under the current schedule, it is expected that RREs will begin reporting in the third quarter of 2009.
The initial report must include information regarding all “active covered individuals.” “Active covered individuals” generally include (1) employees who may be Medicare eligible and who currently are employed, and (2) the spouse or family member of an employee who is covered under the employee’s group health plan and who may be eligible for Medicare. A more detailed definition is contained in the user guide available on the CMS website. Subsequent reports will contain only new or changed coverage information.
There are two reporting options, a basic reporting option and an expanded reporting option. Both options are described in detail in the user guide available on the CMS website.
Note: Among other information, RREs are required to provide either (1) the individual’s Medicare Health Insurance Claim Number (“HICN”), or (2) the individual’s Social Security Number. Because in many cases employers have not collected this information on spouses and family members, it will be necessary to obtain this information before reporting begins. CMS has made available (through the website identified above) a document an RRE can use to explain the reason it is collecting this information.
What is the registration process? Prior to the start of the actual reporting, each RRE must register with CMS. The registration process must be completed by the RRE even if it is delegating the reporting process to an agent. Registration is done on the CMS website.
The registration deadlines for group health plans are as follows:
- RREs that currently have Voluntary Data Sharing Agreements (“VDSAs”) or Voluntary Data Exchange Agreements (“VDEAs”) in place with CMS and the Coordination of Benefits Contractor (COBC) were required to register by October 31, 2008.
- All other RREs (i.e., those that do not currently exchange data with CMS under the VDSA/VDEA Program) must register between April 1, 2009 through April 30, 2009.
More information regarding registration is available at: https://www.cms.hhs.gov/MandatoryInsRep/Downloads/RegistrationOverview.pdf.
To Do Items
To be ready for the January 1, 2009, effective date, we recommend the following steps be taken:
- identify group health plans subject to CMS reporting;
- determine who the RRE for each group health plan;
- determine whether the RRE will perform the reporting on its own or whether an agent will be hired to do so;
- if the RRE will handle the reporting itself review the technical requirements regarding the reporting to ensure the RRE will be ready and able to report in 2009;
- obtain Social Security Numbers (or HICNs) for all individuals covered under the plan for whom reporting must be made;
- for employers sponsoring self-insured group health plans (especially HRAs and other reimbursement plans), contact the third party administrator to ensure it will be complying with the requirements as they apply to the employer’s plans; and
- review and revise administrative services agreements to reflect the responsibility for performing the reporting and address liability for failure to perform.
Please let us if you have any questions regarding the requirements, or if you need our assistance with any of the foregoing action items.
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The information contained in this ALERT is intended for general information purposes only and does not constitute legal advice relative to a specific situation.