Our next blog installment turns to Non-Group Health Plans (NGHPs). While the reporting requirements for Group Health Plans are largely uniform, the same cannot be said for NGHPs. If professionals are not aware of the requirements and the potential consequences, these distinctions can lead to confusion, or worse, to double damages and a minimum fine of $1000 per day per unreported beneficiary. The most recent NGHP policy guidance covers several forms of liability insurance (including self-insurance), no-fault insurance, and workers compensation in several states of existence and decay, such as NGHPs that are in bankruptcy, those that are acquired by larger entities, those that are in the liquidation process, and those that are general self-insurance pools.^[1]  Although we cannot cover every conceivable variation here, we set forth below what NGHPs are and what generally they will be required to report, so that counsel and compliance professionals can identify whether their organization is affected.

Generally, NGHPs are liability insurance (including self-insurance), no-fault insurance, and workers’ compensation laws or plans.^[2]  The intent behind the NGHP reporting requirements is that if a Medicare beneficiary is injured and another payer (such as a workers’ compensation plan) is responsible for paying for the medical treatment of the beneficiary, then the other party should be the primary payer.  Unlike GHPs, there is no blanket requirement that all NGHPs register with Medicare, but those that have reportable information must register at least a quarter before submitting a report.  NGHPs are required to submit a report when there is an Ongoing Responsibility for Medicals (ORM) or there is a Total Payment Obligation to the Claimant (TPOC).

An ORM must be reported when there is ongoing compensation to a party for medical care associated with a claim.  ORM reports do not include dollar amounts, but do report the start and end dates for payments made for ongoing medical expenses.  Additionally, an ORM report should include information about the cause of illness, injury, or incident associated with the claim so that Medicare can determine those claims for which the NGHP is the primary payer and those claims for which Medicare or another payer is designated as primary.  An ORM report is separate and distinct from a TPOC report.  TPOC reports are made when the sum of a total settlement, judgment, award, or other payment obligation is established.  Notably, the TPOC “date” is not when the funds are actually paid, but when the obligation is established.  There are various Mandatory Reporting Thresholds that are outlined by CMS in Chapter III of its NGHP User Guide, depending on the type of insurance and the date of payment.^[3]  All dates listed in the User Guide have passed as of the date of this post and all thresholds have been reached (April 1, 2017 was the last listed date in the charts).  However, while a TPOC may have been technically established before a listed date, it may not have been paid or technically reported at the present time.  As an example of the reporting requirement, the User Guide provides that after January 1, 2017, where the total TPOC amount is over $750.00 for Liability Insurance (including self-insurance), Section 111 Reporting is or was required in the quarter beginning April 1, 2017.^[4]

NGHPs should be aware of these reporting requirements, and the person or group responsible for overseeing compliance should be well versed in the intricacies of the payment structure and the CMS’s manual guidance, which is set out in six detailed reporting manuals issued on December 15, 2017.^[5]

As discussed earlier, NGHPs are the primary payer in certain instances, and failure to uphold this responsibility can result in litigation.  GEICO, an NGHP, is currently involved in litigation for allegedly failing to reimburse a Medicare Advantage plan which made payments to beneficiaries.^[6]  The plaintiffs filed two separate class action suits against GEICO—one involving injured beneficiaries covered by GEICO and another involving tortfeasors carrying GEICO insurance who later settled with the beneficiaries.  In both suits, the plaintiffs allege that Medicare Advantage plans made payments to beneficiaries that GEICO was statutorily required to pay in the first instance.  GEICO filed a motion to dismiss, arguing that the plaintiffs lacked standing because the plaintiffs did not suffer an injury.^[7]  The plaintiffs responded that the Medicare Advantage plans assigned their rights of recovery to the plaintiffs, convincing the court that this assignment gives the plaintiffs standing.  GEICO also argued that the amended complaint lacks the necessary specificity to proceed.  The court noted that while the plaintiffs did not include a lot of detail in their amended complaint, the information included was sufficient to overcome a motion to dismiss, and that more specific information would need to be produced in discovery or the defendants would be entitled to file for summary judgment.^[8]

The rules governing NGHPs are summarized in the following chart:

This is part 4 of 7 in the Medicare Secondary Payer Compliance series. Subscribe to our blog for future updates. Part 3 can be accessed here: Medicare Secondary Payer Compliance: Group Health Plans (Part III)

Andrew Kuder, a Law Clerk (not admitted to the practice of law) in the firm’s Newark office, contributed significantly to the preparation of this post.

_{[1] CMS, MMSEA Section 111 MSP Mandatory Reporting: NGHP User Guide 6-1—6-7 (v5.3 2017).}

_{[2] 42 USC § 1395y(b)(8).}

_{[3] CMS, MMSEA Section 111 MSP Mandatory Reporting: NGHP User Guide Ch. III (v5.3 2017).}

_{[4] CMS, MMSEA Section 111 MSP Mandatory Reporting: NGHP User Guide 6-17 (v5.3 2017).}

_{[5] https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/NGHP-User-Guide/NGHP-User-Guide.html.}

_{[6] Recovery v. Gov’t Emples. Ins. Co., No. PWG-17-711 (D. Md. Feb. 21, 2018).}

_{[7] Id. at *10.}

_{[8] Id. at *24, *45.}