Determining a claimant’s Medicare status is an integral part in evaluating one’s compliance obligations under the Medicare Secondary Payer Statute (MSP). When a claimant is identified as a Medicare beneficiary, several MSP compliance considerations come into play: Medicare, Medicaid, and State Children's Health Insurance Program Extension Act of 2007 (MMSEA) Section 111 reporting (Medicare’s new electronic reporting law), conditional payment reimbursement and Medicare set-asides.  

As part of this exercise, the important question of just how a claimant’s Medicare status will be determined must be addressed.  One such method currently being used by a large segment of the claims industry is “Query Process.”  This system was introduced by the Centers for Medicare and Medicaid Services (CMS) in relation to Section 111.  Query Process was designed to provide an expedient and coordinated process to ascertain a claimant’s Medicare status to help determine Section 111 reporting obligations.

While Query Process is certainly a useful tool, the system’s utility in assessing MSP obligations outside of the Section 111 context must be carefully considered.  In this regard, understanding the type of information Query Process provides, and does not provide, is important to ensure that proper MSP protocols are in place as part of claims handling and settling practices. 

This article highlights how Query Process works and examines the system’s function, utility and limitations in the bigger picture of MSP compliance.

<b>What is CMS’ Query Process and how does it operate?</b>

CMS introduced Query Process as part of its implementation of Section 111. By way of brief background, under Section 111, certain entities known as Responsible Reporting Entities (RREs) are required to (i) determine a claimant’s Medicare beneficiary status and (ii) report claims involving Medicare beneficiaries to CMS if the claim meets a Section 111 “reporting trigger.” The penalty for non-compliance is steep: $1,000 per day, per claim.

While Section 111 imposes a statutory duty on RREs to determine Medicare status, the statute does not provide a specific system to be utilized. In response, CMS established a voluntary electronic Query Process system to assist RREs make this determination.

Under Query Process, an RRE may submit an unlimited number of query requests once a month to determine a claimant’s Medicare beneficiary status.  Only an RRE (or its registered Section 111 reporting agent) are permitted access to the Query Process system. A “query response” file is returned to the RRE within 14 calendar days.  Certain RREs may also have access to a new online query feature called “Beneficiary Lookup” which provides an immediate response to a query request.  Access to this new feature is not available to all RREs, and eligible RREs are limited to only 100 query requests per RRE identification number per calendar month. 

In order to utilize Query Process, the claimant’s social security number (SSN) or health identification claim number (HICN) is required.  In addition, the RRE must submit the first initial of the claimant’s first name, the first six characters of the claimant’s last name, and the claimant’s birth date and gender.  CMS’ system must find an exact match of the submitted SSN or HICN.  Thereafter, at least three out of the four remaining informational elements must yield an exact match.

If the queried claimant is identified as a Medicare beneficiary, a response is returned indicating that the claimant was “matched” to a beneficiary in CMS’ data base.  Due to privacy concerns, the system does not provide the actual date of Medicare entitlement and enrollment, or the basis of the claimant’s entitlement.  With this information, the RRE then assesses whether the claim meets a “reporting trigger” thereby requiring it to be reported under Section 111.
Conversely, if the queried claimant is not identified as a Medicare beneficiary, a response is returned indicating that the claimant was not “matched” to a beneficiary.  In certain circumstances, the RRE will need to re-query the claimant to determine if Section 111 reporting may be required at some subsequent point during the claim.

<b>What information does Query Process provide, and not provide, and how is this important in the bigger picture of MSP compliance?</b>

With a basic understanding of how Query Process works under our belts, the focus shifts to analyzing the nature and utility of the information provided.  This involves assessing the type of information Query Process provides (and does not provide) in relation to the bigger picture of MSP compliance.

As noted above, if the claimant is identified as a Medicare beneficiary, Query Process returns a response simply indicating that the queried individual has been “matched” to a beneficiary in CMS’ data base. No other information is provided.  With respect to Section 111, this limited information is adequate as positive identification of Medicare beneficiary status alone is sufficient to determine reporting obligations.  In this sense, Query Process is precisely calibrated to deliver a very limited, but key, informational element for Section 111 purposes.  However, in moving away from Section 111 the question becomes how helpful is this limited information in evaluating the issues of conditional payment reimbursement and Medicare set-asides (MSAs)?

With respect to conditional payments, the fact that Query Process identifies a claimant as a Medicare beneficiary is helpful in that it alerts the RRE to the possibility of a conditional payment issue.  However, Query Process does not provide any information regarding conditional payments; nor does it trigger the process for the parties to receive this information.  For that matter, Section 111 reporting, with limited exception, also will not provide the parties with this information. 
Thus, RREs need to ensure that separate compliance protocols are in place to procure conditional payment information. On this point, it is generally prudent practice to begin this process once the claimant is identified as a Medicare beneficiary, regardless of whether the claim is technically reportable under Section 111 at the time this determination is made.  This is so because obtaining conditional payment information involves a separate multi-step process which takes time.

Under this process the RRE (or the claimant) must put the Coordination of Benefits Contractor (COBC) on notice of the claim and provide this contractor with certain identifying information related to the case and claimant.  This notice is independent of Section 111 reporting and is provided via phone, fax or mail. 

Once COBC receives this notice, it in turn notifies another contactor, the Medicare Secondary Payer Recovery Contractor (MSPRC).  The MSPRC then issues a Rights and Responsibilities Letter (RRL) advising the parties of Medicare’s potential interests.  Thereafter, the MSPRC will issue a Conditional Payment Letter (CPL) within 65 days of the date of the RRL (in practice this timeline can be longer than 65 days). 

The CPL contains Medicare’s claimed conditional payment amount and provides a corresponding listing of the claimed charges.  The CPL must be examined for accuracy and a request should be made to the MSPRC to remove any inappropriate claims.   It is often necessary to request updated CPLs as the claim matures to ensure that the most current conditional payment information is obtained.  Under current CMS policy, the parties are generally unable to obtain Medicare’s “final demand” until after the claim is settled and the executed settlement document is forwarded to the MSPRC.    

As it can take several months to obtain this information, starting the process early allows the RRE time to obtain the relevant information.  Furthermore, addressing this issue during the course of the claim allows the RRE adequate time to review Medicare’s claimed conditional payment amount and, if necessary, seek removal of inappropriate claims.  Incorporating these practices as part of claims handling will aid the RRE in obtaining a more realistic exposure assessment which, in turn, helps properly set reserves, evaluate case value, and optimize settlement prospects.
On the MSA front, the utility of the information provided by Query Process is also a mixed bag. When Query Process identifies the claimant as a Medicare beneficiary, this indeed provides the RRE with a valuable piece of information for MSA evaluation purposes which should be appropriately noted.  Armed with this information, the RRE can then determine the appropriateness of a MSA.  In the workers’ compensation (WC) context, this involves making sure that claims handlers have firm knowledge of CMS’ WC-MSA review thresholds. Per current CMS policy, a WC-MSA is deemed appropriate if at the time of the WC settlement the claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.

However, it is important to remember that a MSA may also be considered appropriate in situations where the claimant is not a Medicare beneficiary.  For example, under CMS’ WC-MSA review thresholds a MSA is deemed appropriate in situations where the claimant is not a Medicare beneficiary but has a “reasonable expectation of Medicare enrollment within 30 months of the settlement date” and the total settlement amount is greater than $250,000.  

CMS defines “reasonable expectation of Medicare enrollment” to include situations in which the claimant (a) has applied for social security disability (SSD); (b) has been denied SSD but anticipates appealing that decision; (c) is in the process of appealing or re-filing for SSD; (d) is 62.5 years or older; or (e) has End Stage Renal Disease but does not yet qualify for Medicare based upon this condition.

The question then becomes: Does Query Process provide any of the information necessary to determine if a claimant who is not Medicare beneficiary has a reasonable expectation of Medicare enrollment for MSA purposes as that term is defined by CMS?   The answer is NO. Thus, RREs cannot rely solely on Query Process to provide the information needed to determine MSA applicability in all instances.

Accordingly, RREs need to set protocols to obtain the information necessary to determine if a claimant has a reasonable expectation of Medicare enrollment for MSA purposes when such determination is applicable.  These efforts should center on obtaining “best evidence” to demonstrate due diligence in protecting Medicare’s interests.  In this respect, CMS’ definitional factors call for a multi-faceted approach. Some measures for consideration include: confirming the claimant’s social security status directly with the social security administration; determining how best to ascertain and affirm claimant intentions regarding whether he or she “anticipates appealing” an adverse social security ruling (when applicable); and using other necessary discovery measures to ensure that all areas of relevant inquiry are addressed.

<b>Conclusion</b>

The Query Process certainly provides RREs with a powerful tool to obtain a major informational element necessary to determine MSP compliance obligations. In assessing Query Process, it is important to keep in mind that the system was designed to help RREs meet a very specific and limited compliance requirement in the Section 111 context. The system was not intended to provide, nor does it provide, the necessary information to address all MSP compliance areas. Accordingly, as discussed above, RREs need to have proper compliance protocols in place to obtain the information that Query Process does not provide to ensure that all MSP compliance obligations are being fully addressed.

<i>Mark Popolizio is Section 111 Senior Legal Counsel for Crowe Paradis Services Corp. in Miami. He has written numerous articles on MSP issues including MMSEA Section 111, MSAs and conditional payments. </i>