Court Finds Defendant Made Good Faith Effort to Secure SSN to Comply With Section 111 Reporting Requirements

CMS, Mandatory Insurer Reporting, Medicare Set-Aside Blog, MSP Litigation on May 6, 2020
Posted by Jean S. Goldstein, JD, CMSP

As we recently blogged, the comment period for the Centers for Medicare & Medicaid’s (CMS) Section 111 Civil Money Penalties (CMPs) proposed rule closed. This rule contains the circumstances for when the imposition of CMPs would apply, along with some important guidelines of when CMPs would not be imposed based upon good faith efforts to comply with required Mandatory Insurer Reporting (MIR) requirements. Recently, a case out of Rhode Island addressed one of the most common challenges in securing information to comply with MIR requirements and specifically addressed what constitutes good faith efforts in attempting to secure this information. While, CMS’ rule is still pending, and this case was decided just seven days after the comment period for the rule closed, it is nonetheless a case that provides an interesting and recent example of how best to support your efforts in attaining compliance as related to MIR. The case is Ruiz v. Rhode Island, No. 16-507WES, 2020 U.S. Dist. LEXIS 73448 (D.R.I. Apr. 27, 2020) and hinged on two dueling motions seeking resolution of the claim. Plaintiff sought enforcement of a settlement agreement and Defendant sought to obtain a motion to compel Plaintiff to provide his Social Security Number (SSN) or provide an affidavit that he did not have an SSN. 

Background: Incident in 2013; Settles in 2019 

At the very root of this case is an incident that occurred in 2013, when Plaintiff was approximately sixty years old. The incident stemmed from an arrest, during which Plaintiff alleged he sustained serious injuries as a result of the use of excessive force. Plaintiff was subsequently treated at a hospital for the injuries related to the incident. Defendant (State of Rhode Island) subsequently denied liability but agreed to settle in June 2019 for $55,000, with a release of all claims.  In the Release, Plaintiff acknowledged that to the extent that he was a Medicare beneficiary, it was his responsibility to resolve any Medicare claim. However, during the negotiations, the parties did not discuss how the Defendant would obtain closure concerning any possible Medicare claim or lien. Also, during these negotiations, the Plaintiff did not advise Defendant that he would refuse to supply his SSN, nor did Defendant advise Plaintiff that the submission of his SSN, or any part of it, was a precondition to payment of the settlement proceeds for compliance with MIR requirements.

Post-settlement, Defendant began to process the settlement, a process that included requesting Plaintiff’s SSN. However, Plaintiff omitted his SSN from all documents he provided and remained silent regarding his intent to refuse to provide his SSN.  Eventually, Plaintiff articulated his position that he would never supply his SSN or any part of it, the State refused to pay the Settlement Proceeds, and the parties turned to the Court for assistance. 

Of note, a plaintiff’s full SSN is not required to conduct an inquiry to determine Medicare beneficiary status. Through the established CMS query process, certain entities can determine an individual’s Medicare status as part of MIR. To conduct a query the following must be provided: 

  • A Medicare ID or SSN (at least the last five digits);
  • The first initial of the first name; 
  • The first 6 characters of the last name;
  • Date of birth; and  
  • Gender (M/F).

At least three out of the four bolded items must match exactly (all four if a partial SSN is used) to match CMS’ records to confirm Medicare status.

MIR Was Adopted to Add Teeth to MSP 

In its analysis, the court addressed the background of the mandatory insurer “reporting requirements which were adopted to add teeth to a concept embedded in the law since 1980- that Medicare is the secondary payor and must be reimbursed if any other payment source is available.” Id. at 6 n.5. Moreover, the Court discussed the potential CMPs that a payer could open themselves up to if the payer did not comply with MIR requirements. Most importantly, the Court touched upon how very recently the long-awaited proposed MIR rule addressing CMPs was published, which provided a safe-harbor for good faith efforts to attempt to comply with the MIR requirements.  This safe harbor suggests that if an entity has made said good faith efforts, then a failure to comply with reporting requirements will not result in CMPs. 

Defendant’s Good Faith Efforts to Determine Medicare Status

Which brings us to an important question in this matter: did Defendant make good faith efforts to determine Plaintiff’s Medicare status? The Court opined that yes, despite Plaintiff’s adamant refusal to provide his SSN or the last 5 digits of his SSN, Defendant made several efforts to determine Plaintiff’s status, including sending Defendant a Rhode Island Medicare Reporting form, which called for the SSN. Also, Defendant attempted to conduct queries using Defendant’s available identifying information, which included Plaintiff’s last 4 SSN digits which appeared in discovery materials. Defendant conducted inquiries entering every iteration of Plaintiff’s date of birth and appending the digits 0 to 9 to the four SSN digits available. In total, Defendant ran 110 queries, a process that took many hours, and of which the returned response to each query by CMS- weeks later- was that Plaintiff was not a Medicare beneficiary. 

Court Finds Defendant’s Actions Complied With the Spirit of MIR and Enforces the Settlement

The Court found that the State’s actions “fit neatly into the not-yet-established safe harbor limned by the Proposed Rule, so that the penalties and sanctions for non-compliance should that somehow be suggested may not be imposed.” Id. at 26. Therefore, there was no further need for Plaintiff to disclose his SSN or any part of it as a prerequisite to receiving the settlement proceeds. Plaintiff’s Motion to Enforce the Settlement was granted solely on the basis that all prerequisites to finalizing the settlement had been met.

Key Takeaways:

The proposed MIR CMP rule, as discussed in this case, will likely be finalized this summer, and therefore the proposed outlined methods by which to show good faith efforts to comply with MIR requirements have not been finalized. Nonetheless, the proposed rule provides some clearly outlined guidance of what may constitute good faith to comply with MIR requirements, to avoid the imposition of CMPs. Furthermore, there are several other important key takeaways from this case, as noted below:

  1. It is vitally important to have an open dialogue early on in a case to communicate the need to obtain an SSN to comply with MIR requirements. By communicating this need early on, the goal of obtaining the SSN may be met, and such early communication will also allow for ample time to conduct numerous requests before settlement and to avoid unnecessary delays as noted in seen in the instant matter.  Also, determining Medicare beneficiary status early on may further assist in addressing Medicare conditional payments.
  2. While we await the final proposed rule as related to CMPs, it is important to have a process in place to request SSNs to conduct a Medicare query. While we are in this holding pattern, it is an opportune time to examine and determine if your current protocols are sufficient and align with what may be defined as a good faith effort to secure this necessary information.  It is a perfect time to review how requests for identifying information are currently made, and the frequency requests are made on any given case, along with which, if any, forms used to document the reason by which this information is being requested.  For these purposes, CMS created an SSN Collection Model Language Form which is available here in our document center;
  3. Lastly, the greatest takeaway from this case is to understand and communicate with your team the type of issues, and delays, as illustrated in this case, which may result if proper protocols are in not in place to comply with MIR requirements in addition to the possible CMPs which may also follow.  

If you have further questions about this case or Mandatory Insurer Reporting compliance, please contact us at info@medval.com.