April Update to Section 111 Reporting NGHP User Guide: CMS Addresses Subscription Insurance Policy Reporting

Written by Brendon De Souza, Esq., CMSP

Yesterday, the Centers for Medicare & Medicaid Services (CMS) published an updated NGHP User Guide (Version 7.1) which includes a new section regarding appropriate reporting of “subscription insurance policies.” Under a subscription policy, individual insurers may jointly “subscribe” to a single insurance policy such that all insurers share a portion of the total risk insured. This arrangement allows each individual insurer to receive premiums under an insurance policy without assuming the entire risk. Chapter III of the NGHP User Guide now includes the following section to address this arrangement:

6.1.13 – Subscription Insurance Policies

In a subscription insurance policy arrangement, two or more insurers enter into an agreement whereby the risk of the insurance policy is spread among the various insurance entities in some agreed-upon ratio. In such arrangements, a lead insurer is designated for various administrative and business purposes. While there may be many co-insurers on a subscription insurance policy, there is only one lead insurer, and that lead insurer remains so throughout the policy life cycle.

Due to the nature of the subscription insurance market and the way such policies are structured, it is appropriate for the lead insurer to act as the sole RRE as it relates to Section 111 mandatory reporting requirements. The ability for the lead insurer to act as the sole RRE is predicated on the assumption that the lead insurer will avail themselves of all rights, requirements, and responsibilities codified in statute and further set out in regulation and within this and any other sub-regulatory guidance provided by CMS, as is from time to time amended. In any such lead reporting situation, as it relates to subscription insurance policies, CMS will assume that the lead insurer, as the sole RRE, will be responsible for all applicable reporting, recovery, and benefits coordination requirements that presently exist, regardless of the existence of any other co-insurer that may enter into a subscription arrangement or similar contract with the lead insurer.

Sanderson Firm Commentary:

Insurance payers involved with subscription policies should review the underlying insurance policy to confirm whether they are, in fact, the “lead insurer” for Section 111 reporting purposes. If your organization is not the “lead insurer,” Section 111 reporting obligations are waived pursuant to this update.

We are pleased that CMS continues to provide transparency in unique Section 111 Medicare reporting scenarios, and we encourage Medicare Secondary Payer (MSP) stakeholders to continue to notify CMS of any apparent gaps in policy guidance ahead of the currently scheduled February 2024 Civil Monetary Penalty Rulemaking.

The significance of having a comprehensive Section 111 Medicare Reporting Agent cannot be overstated, as highlighted by the latest update. Having a Reporting Agent that is consultative with Responsible Reporting Entities (RREs) is particularly crucial for organizations that have non-traditional insurance arrangements such as subscription policies.

At Sanderson Firm, we serve as a Medicare Section 111 Reporting Agent, ensuring our clients are in compliance with MSP and Section 111 Reporting regulations. If you have any questions regarding this NGHP User Guide update, our Section 111 Reporting Services or any other Section 111 compliance matters, please do not hesitate to contact us.