Updated Information: ACE and the Medicare, Medicaid & SCHIP Extension Act
As you may be aware, the Centers for Medicare & Medicaid services (CMS) has issued revisions to the Medicare, Medicaid & SCHIP Extension Act of 2007, which mandates additional reporting requirements for insurers and self-insured businesses. There are a number of questions regarding the implementation of these reporting requirements, including the question of who should be designated as a Responsible Reporting Entity (RRE).
In their February 24, 2010 alert, The Centers for Medicare and Medicaid Services (CMS) provided information regarding deductible plans. Under the new procedures, the insurer is generally required to be the RRE for deductible plans regardless of funding. However, CMS states that if an insured entity acts “without recourse to its insurance, it is responsible for Section 111 reporting with respect to those actions.” CMS does not explicitly define the term “acting without recourse” other than to give the following example:
A claim is made against Company X which has insurance through Insurer Y. Company X settles the claim without informing its insurer. Company X is responsible for Section 111 reporting for the claim regardless of whether or not the settlement amount is within the deductible or in excess of the deductible.
CMS continues to maintain the “follow the money/funds” approach when dealing with coverage in excess of a Self Insured Retention and with Fronting Policies. If the insurance carrier pays the claims, the carrier is the RRE. If the insured pays the claims, the insured is the RRE.
Based on ACE’s interpretation of the current CMS documents, including the February 24 alert, it is ACE’s general understanding the RRE should be designated as follows under these policy types:
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Policy Type
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Description
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TPA
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Responsible
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Reporting
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Entity ("RRE")
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Guaranteed Cost / Retro
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The Insured has a policy without a deductible endorsement or a self insured retention (SIR).
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All ACE TPAs
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ACE
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Deductible - AL/GL/PL/WC
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The Insured has an AL, GL or PL policy with a deductible endorsement.
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All ACE TPAs
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ACE
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Deductible - AL/GL/PL/WC
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The Insured has an AL, GL or PL policy with a deductible endorsement.
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Self Administration
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Insured
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SIR -AL/GL/PL/WC
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The Insured has an AL, GL, PL or WC excess policy - the policy includes a Self Insured Retention (SIR).
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All ACE TPAs
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Insured
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The data for claims under policy types where ACE is designated as the RRE will be included in our submissions to CMS and all obligations and responsibilities associated with the RRE designation will be assumed by ACE. ACE insureds are not generally required to register as the RRE for the reporting of covered claims where ACE is designated as the RRE. However, should an ACE insured act “without recourse to its insurance, it is responsible for Section 111 reporting with respect to those actions” it would need to register as an RRE for such instances.
FOR INSURED’S WHO HAVE ALREADY REGISTERED:
If ACE insureds registered solely for the purpose of reporting claims on ACE policy types where ACE is designated as the RRE in the table above, it is possible the insured may no longer be required to be registered as an RRE. CMS has established a deregistration process if you determine you are no longer required to report and previously registered to receive a Responsible Reporting Entity ID (RRE ID).
Many of our insureds have programs that have been highly customized and may not neatly fit into one of the above categories. We are available to discuss any unusual programs with you or any of your colleagues.
Guidance from CMS is likely to continue to evolve. If there are new requirements, the RRE roles outlined in the above table may also change. Please check this page periodically for updates. In the interim, if you have any questions regarding ACE’s position as it relates to the RRE issue, please contact Rick Raup at 302 476-7835 or via e-mail at rick.raup@acegroup.com.
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