J8 MSPRC StatementofWork 12012010 DRAFT.pdf

Centers for Medicare & Medicaid Services HHSM-500-2006-00027C Medicare Secondary Payer Recovery Contractor Statement of Work Attachment J.8

For Official Use Only - Procurement Sensitive

Medicare Secondary Payer

Recovery Contractor

(MSPRC)

Statement of Work (SOW)

December 1, 2010

Centers for Medicare & Medicaid Services HHSM-500-2006-00027C Medicare Secondary Payer Recovery Contractor Statement of Work Attachment J.8

For Official Use Only - Procurement Sensitive

This page is intentionally left blank.

MSPRC SOW 12/01/2010 - For Official Use Only - Procurement Sensitive i

C.1 Background

C.1.1 General Medicare Overview

C.1.2 The Medicare Integrity Program

C.1.3 The Medicare Secondary Payer Program

C.1.3.1 The MSP Recovery Process

C.2 SOW Overview

C.2.1 Scope, Purpose, and Objectives

C.2.2 Approach

C.2.2.1 Recovery Approach

C.2.2.2 Customer Service

C.2.2.3 Operational Excellence

C.2.2.4 Innovation and Technology

C.2.2.5 Financial Management

C.2.2.6 Risk Mitigation

C.2.2.7 Security

C.2.2.8 Subcontracting Approach

C.2.2.9 Quality Assurance

C.2.3 References

C.2.3.1 Statutes

C.2.3.1.1 The Social Security Act, as Amended

C.2.3.1.2 Omnibus Budget Reconciliation Act of 1980

C.2.3.1.3 OBRA 1981

C.2.3.1.4 The Tax Equity and Fiscal Responsibility Act of 1982

C.2.3.1.5 Deficit Reduction Act of 1984

C.2.3.1.6 Consolidated Omnibus Budget Reconciliation Act of 1985

C.2.3.1.7 OBRA 1986

C.2.3.1.8 OBRA 1987

C.2.3.1.9 OBRA 1989

C.2.3.1.10 OBRA 1990

C.2.3.1.11 OBRA 1993

C.2.3.1.12 1994 Amendments to the Act

C.2.3.1.13 Balanced Budget Act of 1997

C.2.3.1.14 Section 301 of the MMA

C.2.3.1.15 Section 111 of the Medicare and SCHIP Extension Act of 2007

C.2.3.1.16 The Health Insurance Portability and Accountability Act of 1996

C.2.3.1.17 The Benefits Improvements and Protection Act of 2000

C.2.3.1.18 Other Key Statutes

C.2.3.2 Regulations

C.2.3.3 The Medicare Manual

C.2.3.4 Other References

C.3 Functional Requirements

C.3.1 Infrastructure Requirements

C.3.1.1 Local Hardware and Software Requirements

C.3.1.2 The CMS Data Communications Network

C.3.1.2.1 The Medicare Data Communications Network

C.3.1.3 Local Telephone Service Connections ii

C.3.1.4 Federal Telecommunications System 2001 Network

C.3.1.5 CMS' Secure E-mail Application

C.3.2 Records Requirements

C.3.2.1 Definition of Records/Files

C.3.2.2 Categories of Records

C.3.2.3 Disposition of Records

C.3.2.4 Record Management

C.3.2.4.1 Records Management Program

C.3.2.4.2 Implementing a Records Management Program

C.3.2.5 Storage of Records

C.3.2.6 Imaging

C.3.2.7 Printing and Mailing

C.3.2.8 Record Retrieval

C.3.2.9 Information Resources

C.3.2.10 Privacy, HIPAA, and Use Information

C.3.3 Program Management Requirements………………..……………………………25

C.3.3.1 Quality Control and Improvement Program

C.3.3.1.1 Quality Improvement Plan

C.3.3.1.2 Continuous Quality Improvement

C.3.3.2 Internal Training and Education

C.3.3.3 Freedom Of Information Act Requests

C.3.3.4 MSP Post-Payment Recovery

C.3.3.4.1 Recovery Authority

C.3.3.4.2 Creating and Processing ReMAS Leads

C.3.3.4.3 NGHP Right and Responsibilities Letter (RAR)

C.3.3.4.4 Identification of NGHP Claims Potentially Subject to Recovery

C.3.3.4.5 Proof of Representation/Proper Releases

C.3.3.4.6 NGHP Conditional Payment Letter (CPL) and Conditional Payment Notice

(CPN)

C.3.3.47 Notices of Settlement, Judgment, Award or Other Payment

C.3.3.4.8 NGHP MSP Record Termination with Settlement, Judgment, Award or

Other Payment Date………………….…………………………………..…….32

C.3.3.4.9 NGHP Request of Claim/Pleading and Settlement Documents

C.3.3.4.10 NGHP Request of Procurement Costs Certifications

C.3.3.4.11 NGHP Pre-demand No-Fault Insurer Letter

C.3.3.4.12 Identification of GHP Claims Potentially Subject to Recovery and the Primary Payment Notice (PPN)

C.3.3.4.13 Issuance of Recovery Demand Letters for GHPand NGHP Debts

C.3.3.4.14 Correspondence

C.3.3.4.15 Responding to Telephone Inquiries

C.3.3.4.16 Debt Collection Improvement Act Processes

C.3.3.4.16.1 GHP Debts with Unresolve Defenses…………..………………………....…38

C.3.3.4.17 Beneficiary Representation and Privacy……………….……

C.3.3.418 Reopenings

C.3.3.4.19 Initial Determinations for § 1870 Waiver of Recovery Requests

C.3.3.4.20 Appeals iii

C.3.3.4.21 Bankruptcies and Liquidation Notices

C.3.3.4.22 Litigation/Negotiation Support Requests

C.3.3.4.23 Joint Signature Memoranda

C.3.3.4.24 MSP Savings Report

C.3.3.4.25 CFO Reporting Requirements

C.3.4 Systems Requirements

C.3.4.1 The Recovery Management and Accounting System

C.3.4.2 The Electronic Correspondence Referral System

C.3.4.3 The Common Working File

C.3.4.4 MSP Accounts Receivable

C.3.4.5 The Debt Collection System

C.3.4.6 The Contractor Reporting of Operational Workload Data System

C.3.4.7 The Contractor Administrative Budget and Financial Management System .. 47

C.3.5 Interface Requirements

C.3.5.1 Joint Operating Agreements

C.3.5.2 Interfacing with the COBC

C.3.5.2.1 ECRS Transmissions

C.3.5.3 Interfacing with 1-800-MEDICARE

C.3.5.4 Interfacing with the QICs

C.3.5.5 Interfacing with the Medicare Claims Processing Contractors

C.3.5.6 Coordinating with Investigative Agencies

C.3.6 Banking Relations

C.3.6.1 Issuance of Refunds

C.3.7 Financial Management of Trust Fund Dollars

C.3.7.1 Use of Trust Fund Dollars

C.3.7.2 CFO Certification for Medicare Operations

C.3.7.3 Validation of Financial Data

C.3.7.4 Resolution of Financial Deficiencies

C.3.7.5 Financial Reporting and Accounting

C.3.7.6 AR Trend Analyses

C.3.7.7 Financial Reporting Audits/Reviews

C.3.8 Administrative Requirements

C.3.8.1 Staffing

C.3.8.1.1 Key Personnel

C.3.8.1.1.1 The Project Director

C.3.8.1.1.2 CFO

C.3.8.1.1.3 System Administrator

C.3.8.2 Essential Personnel

C.3.8.2.1 Medical Personnel

C.3.8.2.2 Training Specialist

C.3.8.2.3 Compliance Officer

C.3.8.2.3.1 Quality Assurance Officer……………………………………………………56

C.3.8.2.4 MSP Policy Specialist

C.3.8.3 Personnel Security Clearances

C.3.8.3.1 Background Checks……………………………………………………………58

C.3.9 Internal Controls iv

C.3.9.1 Written Policies and Procedures

C.3.9.2 Attestation and Certification Statement

C.3.9.3 Correcting Internal Control Deficiencies

C.3.9.4 Compliance Program

C.3.9.5 Business Continuity Planning and Disaster Recovery

C.3.9.6 Six Sigma Registration

C.3.10 Security Requirements

C.3.10.1 Certification of Compliance with CMS Systems Security Requirements

C.3.10.2 Administer a Security Program

C.3.10.3 Correct Deficiencies

C.3.10.4 Corrective Action Attestation

C.3.10.5 Security Review and Verification

C.3.11 Outreach

C.4 Project Management Plan

C.4.1 Implementation Project Plan………………………………………………………..….64

C.4.1.1 Implementation and Transition Requirements……………………………………..65

C.4.1.2 MSPRC Transition Responsibilities……………………………………………..….65

C.4.1.3 Transition Project Plan……………………………………………………………….66

C.4.1.4 Implementation Transition and Cutover Meetings……………………………

C.4.1.5 Monthly Status Report and Meeting………………………………………………...67

C.4.2 Cost Management

C.4.3 Risk Management Plan

C.4.4 Communication Plan

C.4.4.1 Participation in Meetings and Work Groups

C.4.4.2 Participation in Conferences

C.5 Options

C.5.1 MSPRC 5010 Remediation Project……………………………….…………………...70

C.5.2 MSPRC ICD-10 Remediation Project……………………………………………...…70

C.5.3 Future Task Orders……………………………………………………………….…...70

AdQIC Administrative Qualified Independent Contractor

AIS automated information system

ANSI American National Standards Institute v

AR Accounts Receivable

ASQ American Society for Quality

BCC Beneficiary Contact Center

BIPA Benefits Improvements and Protection Act of 2000

C&A Certification and Accreditation

CAFM Contractor Administrative Budget and Financial Management System

CAP Corrective Action Plan

CFO Chief Financial Officer

CMS Centers for Medicare & Medicaid Services

CNC

CPL

CPN

currently not collectible

Conditional Payment Letter

Conditional Payment Notice

CO Contracting Officer

COBC Coordination of Benefits Contractor

COOP Continuity Of Operations

CROWD Contractor Reporting of Operational Workload Data

CWF Common Working File

DCIA Debt Collection Improvement Act of 1996

DCS Debt Collection System

DHHS Department of Health and Human Services

DME Durable Medical Equipment

DME MAC Durable Medical Equipment Medicare Administrative Contractor

DMERC Durable Medical Equipment Regional Carrier

DPP Duplicate Primary Payment

ECRS Electronic Correspondence Referral System

EMRG Emergency Management & Response Group

ESRD End-Stage Renal Disease

FAR Federal Acquisition Regulation

FASAB Federal Accounting Standards Advisory Board

FFS Fee-For-Service

FI Fiscal Intermediary

FMS Financial Management Service

FOIA Freedom of Information Act

FTS Federal Telecommunications System

GAAP Generally Accepted Accounting Principles

GAAS Generally Accepted Accounting Standards

GAO Government Accountability Office

GHP Group Health Plan

GPRA Government Performance and Results Act

HI Hospital Insurance (Medicare Part A)

HIGLAS Healthcare Integrated General Ledger Accounting System

HIPAA Health Insurance Portability and Accountability Act of 1996

IEEE Institute of Electrical and Electronics Engineers

IOM Internet Only Manual

IPP Implementation Project Plan

IRS Internal Revenue Service vi

IVR Interactive Voice Response

JOA Joint Operating Agreement

JSM Joint Signature Memorandum

LEC Local Exchange Carrier

LGHP Large Group Health Plan

MAC Medicare Administrative Contractor

MDCN Medicare Data Communications Network

MIP Medicare Integrity Program

MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003

MMSEA

MSP

Medicare, Medicaid and SCHIP Extension Act of 2007

Medicare Secondary Payer

MSPRC Medicare Secondary Payer Recovery Contractor

NIST National Institute of Standards and Technology

OBRA Omnibus Budget Reconciliation Act

OGC Office of General Counsel

OIG Office of the Inspector General

OIS Office of Information Services

OMHA Office of Medicare Hearings and Appeals

OPM

ORM

Office of Personnel Management

Ongoing Responsibility For Medicals

PACER Public Access to Court Electronic Records

PD Project Director (at the MSPRC)

PHI Protected Health Information

PMP Project Management Plan

PO Project Officer

POC

PPN

Point-Of-Contact

Primary Payment Notice

Privacy Act The Privacy Act of 1974

QIC Qualified Independent Contractor

RAC Recovery Audit Contractor

ReMAS Recovery Management and Accounting System

RFP Request for Proposal

RAR Right and Responsibilities Letter

SDLC

SMI

System Development Life Cycle

Supplemental Medical Insurance (Medicare Part B)

SOW Statement of Work

SSA Social Security Administration

SSO Systems Security Officer

TDD Telecommunications Devices for the Deaf

TFTS Toll-Free Telephone System

TGA Treasury General Account the Act Social Security Act

TOP Treasury Offset Program

TPA

TPOC

Third Party Administrator

Total Payment Obligation To The Claimant

WC Workers’ Compensation

C.1 Background

C.1.1 General Medicare Overview

Medicare is a nationwide, Federal insurance program enacted in 1965 as Title XVIII of the Social Security Act (―the Act‖; 42 U.S.C. § 301 et seq.) for persons 65 years of age or older, certain younger disabled persons, and persons with end-stage renal disease

(ESRD). The Medicare program serves an estimated 42 million beneficiaries and processes in excess of one billion claims per year. Fee-for-service (FFS), or ―traditional,‖

Medicare consists of two primary parts: Hospital Insurance (HI) otherwise known as Part

A, and Supplemental Medical Insurance (SMI) also known as Part B. Parts C (Medicare

Advantage program) and D (prescription drug coverage) also exist, but this initiative shall not deal with either of those programs so they shall not be discussed in detail.

Medicare Part A covers some of the costs of providing medically necessary inpatient hospital care, skilled nursing facility care following hospital care, home health agency and hospice care. Individuals entitled to Social Security or Railroad Retirement benefits are automatically eligible to receive premium-free Part A hospital insurance beginning with the first day of the month in which the individual attains the age of 65; those who are not may enroll and purchase Part A benefits once they attain age 65. Also automatically eligible for Part A are: 1) those people younger than age 65 who receive

Social Security disability benefits (after a defined waiting period); 2) persons with ESRD who met certain criteria; and 3) individuals who worked in certain Medicare-qualified

Federal, state or local government employment, provided certain conditions are met.

Medicare Part B helps pay for certain physician services (in hospital and non-hospital settings), outpatient hospital services, home health services and other medical services, equipment and supplies not covered under Part A. Part B benefits are available to almost anyone age 65 or older regardless of entitlement to Medicare Part A and to all beneficiaries entitled to premium-free Part A. Part B is an ―optional program,‖ meaning that eligible individuals may elect or decline to enroll in the program which requires payment of a monthly premium.

The Medicare program’s authorizing statutes charge the Secretary of the Department of

Health and Human Services (DHHS) with the administrative responsibility for the

Medicare program. In turn, the Secretary has delegated the program authority for

Medicare to the Administrator of the Centers for Medicare & Medicaid Services (CMS).

In addition, the Social Security Administration (SSA) is responsible for initially determining an individual’s Medicare entitlement and for maintaining the Medicare master beneficiary record.

The CMS administers the Medicare program, including formulation and promulgation of

Medicare Program policy and guidance, contract execution, operation and management, maintenance and review of utilization records, and general Medicare financing.

The CMS administers the Medicare Program through a complex set of relationships involving the private insurance industry, state and local governments, and thousands of independent hospitals, physicians, providers and suppliers. Sections 1816(a) and 1842(a) of the Act provide that public or private entities and agencies may participate in the administration of the Medicare program under contracts or agreements entered into with

CMS. These Medicare contractors are known as ―Fiscal Intermediaries‖ (FIs) and

―carriers.‖ Currently, CMS has 46 FIs and carriers throughout the United States. With certain exceptions, FIs perform bill processing and benefit payment functions for Part A of the program; carriers perform similar functions for Part B. The CMS also has four carriers with exclusive responsibility for handling Medicare Part B claims for durable medical equipment (DME) as well as prosthetics, orthotics, and supplies in specified geographic regions of the United States. They are commonly referred to as the Durable

Medical Equipment Regional Carriers (DMERCs). However, the Medicare Prescription

Drug, Improvement, and Modernization Act of 2003 (MMA) requires that CMS phase out these contractors under Medicare Contracting Reform.

Congress mandated in § 911 of the MMA that CMS replace the current FI and carrier contractors with competitively-procured Medicare Administrative Contractors (MACs).

The contracts under which the MACs will operate shall conform to the Federal

Acquisition Regulation (FAR) contracting standards. The CMS has between 2005 and

2011 to complete the transition of Medicare FFS claims processing activities from the FIs and carriers (including DMERCS) to the MACs. The MAC contracts will continue to be awarded on an ongoing basis.

Note: FIs, carriers, and MACs will be collectively referred to as ―Medicare claims processing contractors‖ throughout this document. Otherwise, the contractors referenced will be specifically identified.

C.1.2 The Medicare Integrity Program

The Health Insurance Portability and Accountability Act of 1996 (HIPAA; Public Law

104-191), added § 1893 to the Act, establishing the Medicare Integrity Program (MIP; 42

U.S.C. § 1395ddd). This program is funded from Medicare’s Federal HI Trust Fund for activities related to both Medicare Parts A and B. Specifically, § 1893 enables CMS to contract with an expanded pool of eligible entities to carry out certain Medicare program integrity activities that were being performed under contracts with FIs and carriers.

The MIP activities identified in § 1893 of the Act include: 1) reviewing activities of providers of service and other individuals and entities furnishing items and services for which Medicare payment may be made, including medical utilization and fraud review;

2) auditing provider cost reports; 3) providing education with respect to program integrity and quality assurance issues to various audiences, 4) developing/updating the list of durable medical equipment subject to prior authorization; and, most important for purposes of this SOW, 5) ensuring that Medicare pays after certain other plans and recovers its payments where appropriate. These last activities are known as ―Medicare

Secondary Payer‖ (MSP) activities (see Section C.1.3, The MSP Program, below.)

C.1.3 The Medicare Secondary Payer Program

Under § 1862(a) of the Act (42 U.S.C. § 1395y(a)), items and services furnished by

Federal providers, a Federal agency, or under a Federal law or contract, have been excluded from Medicare coverage (e.g., U.S. Military Hospitals, U.S. Department of

Veterans Affairs, research grants). Furthermore, § 1862(b)(2)(A)(ii) of the Act (42

U.S.C. § 1395y(b)(2)) and the implementing regulations in 42 CFR Part 411 preclude

Medicare from paying for a beneficiary's medical expenses where the beneficiary is:

age 65 or older and covered under an employer’s Group Health Plan (GHP) based on his/her own current employment status or the current employment status of a spouse (of any age), and o the employer has at least 20 employees, or o the GHP is part of a multi-employer plan where at least one employer has at least 20 employees and the GHP has not received a formal exception under 42 CFR 411.172(b);

within the first 30 months of eligibility/entitlement to Medicare based on having

ESRD and is covered under any GHP (regardless of size or employment status) that covers individuals who have ESRD;

under age 65, entitled to Medicare on the basis of disability, and covered under an employer Large Group Health Plan (LGHP) based on his/her own current employment status or the current employment status of a family member. An

LGHP is a plan where o the employer has 100+ employees, or o the GHP is part of a multi-employer plan where at least one employer has

100+ employees;

Additionally, Medicare may not make payment where payment has been made or can reasonably be expected to be made under a workers’ compensation (WC) law or plan, under no-fault insurance, or under liability insurance (including self- insurance). An entity that engages in a business, trade, or profession is deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance or otherwise) in whole or in part. A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means.

MSP involves those functions performed to identify when another payer should pay before Medicare and to recover payments when another payer was required to pay before

Medicare. The CMS has contracted with an entity, known as the Coordination of

Benefits Contractor (COBC), that gathers Medicare beneficiaries’ other health insurance information and supplies it to CMS. Medicare uses this information for claims adjudication and to recover both mistaken and conditional payments from responsible entities. Generally speaking, a Medicare primary payment is mistaken when a GHP had payment responsibility before Medicare. This may happen, for example, because

Medicare is unaware of the GHP’s primary payment responsibility. Medicare is authorized to make conditional payments under certain circumstances involving a WC carrier, no-fault insurance, or liability insurance; these payments must be reimbursed once primary payment responsibility has been demonstrated for such other coverage. (See

42 CFR 411.24, 411.45, 411.50, 411.52, and 411.53).

C.1.3.1 The MSP Recovery Process

Information about the majority of MSP situations comes directly to the COBC through various means, and the COBC has responsibility for updating CMS’ Common Working

File (CWF; see Section 3.4.3, CWF and IOM Pub. 100-5 Chapter 6) with appropriate

MSP information. However, the MSPRC may receive information from other entities regarding information about a potential MSP occurrence or possible changes to existing record. Examples of the types of MSP records are: 1) GHP-working aged, 2) GHP-

ESRD, 3) GHP-disability, 4) WC carrier, 5) no-fault insurance, and 6) liability insurance.

When a new beneficiary MSP occurrence is added to CWF or identified through

MMSEA Section 111(refer to section C.2.3.1.15 for complete details), CMS systems initiate claims searches from the National Claims History files. Depending upon the type of MSP occurrence, the entity responsible for MSP debt recovery shall communicate with the affected debtor(s) regarding Medicare’s potential recovery claim and when appropriate send a demand for repayment.

The entity responsible for MSP debt recovery is also responsible for the adjudication/resolution of the debt, as well as the mandatory financial reporting. Part of the recovery of the debt shall involve, if appropriate, the referral of eligible delinquent debt to the Department of Treasury (hereinafter referred to as ―Treasury‖) for cross-servicing, including the Treasury Offset Program (TOP; see Section C.3.3.4.15, DCIA

Processes, and IOM Pub. 100-5, Chapter 7, Section 60). Throughout the course of collecting the debt and addressing potential rebuttals to the debt (or first level administrative appeal requests in connection with certain beneficiary debts), the entity responsible for MSP debt recovery tracks and reports all accounting actions within the appropriate Chief Financial Officer (CFO) financial reports. Once a debt has been recovered, whether fully or partially, the entity responsible for MSP debt recovery submits an MSP savings report.

C.2 SOW Overview

C.2.1 Scope, Purpose and Objectives

The CMS has consolidated all of the functions and workloads related to MSP post-payment recoveries which are associated with the recovery of GHP (working aged, disabled and ESRD) and non-GHP (WC, no-fault, and liability) MSP debts into one

MSPRC. The MSPRC is responsible for actions or inquires that may be required to identify or initiate GHP or non-GHP recovery actions to an employer, insurer/Third Party

Administrator (TPA), WC carrier, no-fault insurer, liability insurer, or beneficiary. The

MSPRC will not duplicate work performed by CMS’ COBC unless otherwise directed by the SOW.

This consolidated contract does not include MSP debts or potential debts in which the debtor is or will be a provider, physician or other supplier. CMS is looking for the use of technology and automation so efficiencies can be realized.

In general, once MSP situations are identified by the COBC, the MSPRC shall develop and pursue recovery claims. MSP recovery activities include but are not limited to:

identifying mistaken or conditional MSP payments for recovery from employers, insurers/TPAs/WC carriers, no-fault insurers, liability insurers, or from beneficiary settlements, judgments, or awards;

determining conditional payment amounts potentially subject to recovery;

providing conditional payment amounts when Medicare conditionally pays a beneficiary’s claim involving WC, no-fault insurance or liability insurance

(including self-insurance);

answering telephone inquiries and written correspondence;

issuing recovery demand letters, where appropriate;

making beneficiary waiver determinations pursuant to § 1870 of the Act when such requests are filed;

resolving alleged defenses to MSP debts;

processing first level appeal requests from beneficiaries on beneficiary MSP debt;

providing MSP litigation/negotiation support to CMS;

performing activities related to the Debt Collection Improvement Act of 1996

(DCIA; Pub. L. 104-134), including referral of delinquent MSP debt to Treasury for cross-servicing activities, where appropriate (see Section C.3.3.4.15, DCIA

Processes);

Ensuring that financial statements and reports are accurate and conform with

CMS financial reporting instructions; and

Ensuring efficient procedures and internal controls are in place for all functions.

The overall goal of the MSPRC is to identify and recover both GHP and NGHP debt, provide good customer service, refer uncollected debt to Treasury, and adhere to CMS’s financial statement reporting requirements. The primary objectives of this contract are as follows:

GHP Debt Collection

As of August 1, 2010, the MSPRC shall verify MSP leads related to GHP debt based on

CMS mutually agreed upon thresholds. When information from the responsible party

(e.g. insurer/employer/TPA/plan, or other plan sponsor) is needed to verify a GHP lead, a primary payment notice (PPN) requesting verification of the lead shall be sent to the responsible parties in accordance with CMS timeframes.

The MSPRC shall take appropriate actions based on information received in response to the PPN. All PPN responses received within fifty (50) calendar days shall be worked according to the instructions below. If a response is received, the MSPRC has eighteen

(18) calendar days from the response due date of the PPN plus five (5) calendar days to enter any applicable ECRS requests. This will allow seven (7) calendar days for those changes to apply to CWF in order to begin the demand creation process. For every PPN sent, including PPNs that receive no response, the MSPRC has ninety-five (95) calendar days from the date of the PPN to determine if the debt is valid and mail a demand letter or letter to the responsible party closing the case. If the insurer/TPA and employer/plan sponsor do not respond to the PPN then the debt is assumed valid. PPN responses received after fifty (50) calendar days from the date of the PPN letter are not considered valid documented defenses.

The MSPRC shall conduct collection activities for all GHP debts prior to referring the debts to Treasury. All unresolved GHP debt shall be referred to Treasury in accordance with CMS instructions.

NGHP Debt Collection

The MSPRC shall issue a RAR letter to the beneficiary and other representatives within fifteen (15) calendar days of MSP Recovery System establishing the case.

For self-identified cases that come directly to the MSPRC without going through the

COBC, the MSPRC shall initiate a ―cold‖ transfer of the call to the COBC phone queue and educate the caller on the proper procedure to establish a lead. .

For cases previously established in MSP Recovery System the MSPRC shall issue a recovery demand letter within twenty (20) calendar days of the notice of the settlement, judgment, award, or other payment.

For cases NOT established in MSP Recovery System, when the notice of the settlement, judgment, award, or other payment is received either by Section 111 Reporting or from the beneficiary and/or their representative, the MSPRC shall issue a Conditional Payment

Notice (CPN) within fifty-five (55) calendar days of the date of the RAR issuance. The

CPN will allow a thirty calendar day (30) timeframe for the debtor to respond. If a response is received, a recovery demand letter shall be issued within the normal correspondence timeframes. However, if no response to the CPN is received by the response due date plus five (5) calendar days, a recovery demand letter shall be issued within twenty (20) calendar days from the response due date printed on the CPN.

The MSPRC shall issue a CPN for Non-GHP MMSEA Section 111 data submitted as of

April 1, 2010, as applicable, set forth below. For cases established in the MSP Recovery

System as a result of receiving notification of a settlement, judgment, award or other payment from the beneficiary or their representative, the MSPRC shall issue a CPN for cases established as of the CPN implementation date and beyond.

The MSPRC shall conduct collection activities for all NGHP debts prior to referring the debts to Treasury. All unresolved NGHP debts shall be referred to Treasury in accordance with CMS instructions.

Debt Referral

The MSPRC shall attempt to collect and resolve all eligible delinquent MSP debts prior to referral to Treasury. The MSPRC shall resolve seventy (70) percent of individual beneficiary GHP debts (by payment or a valid documented defense) prior to the debts becoming 180 calendar days delinquent. The MSPRC shall resolve ninety (90) percent of

NGHP debts prior to the debts becoming 180 calendar days delinquent.

The MSPRC shall refer ninety-eight (98) percent of the remaining eligible delinquent

NGHP and GHP debts to Treasury before the 181st calendar day of delinquency (241 calendar days from the date of the initial demand).

Financial Reporting

The MSPRC shall comply with all CMS CFO reporting requirements. Requirements for reporting AR activities are specified in IOM Pub. 100-6, Chapters 5 and 7.

The MSPRC shall maintain sufficient records and internal controls to ensure all CMS financial reporting requirements are met.

Customer Service

The MSPRC resolves ninety-five percent (95%) of all correspondence (except checks), within forty-five (45) calendar days (unless directed otherwise, depending on the type of correspondence).

The MSPRC posts one hundred percent (100%) of all checks received with correspondence to a known debt within twenty (20) calendar days (this does not affect the requirement that the MSPRC shall deposit all checks within twenty-four (24) hours of receipt; see Section C.3.6, Banking Relations).

Standard 1: The MSPRC shall respond to all telephone inquiries and document all conversations and their resolutions.

Standard 2: The MSPRC shall respond to 98% of all callback requests at the time the caller requests or within one (1) business day if a specific time is not requested.

C.2.2 Approach

Consistent with Government Performance and Results Act (GPRA; Pub. L. 103-62,), CMS has used a balanced-scorecard approach to develop objectives for the MSPRC in the following categories:

recovery approach;

customer service;

operational excellence;

innovation and technology;

financial management;

risk mitigation;

security;

subcontracting approach; and quality assurance.

In this SOW, CMS has identified meaningful, outcome-oriented performance standards and measures that speak to fundamental program purposes and to CMS’ role as a steward of taxpayer dollars.

C.2.2.1 Recovery Approach

The primary purpose of this contract is to recover MSP debts owed the Government. The recovery approach shall address the soundness of the MSPRC’s methodology for successfully pursuing recoveries. In support of the objective, CMS requires the MSPRC to identify and recover MSP debts timely, efficiently, accurately, and reliably, all within the scope and standards of the contract.

C.2.2.2 Customer Service

The MSPRC shall interact with a wide array of business partners and customers, including beneficiaries, employers, insurers, TPAs, WC carriers, attorneys and providers, among others. Customer service addresses the ability to provide quality services effectively and efficiently to increase the overall level of customer service and satisfaction. In support of this objective, CMS requires the MSPRC to:

Effectively manage a relationship with debtors in order to resolve MSP accounts receivable (AR) related issues timely;

Maintain a relationship with Treasury to enable CMS to effectively discharge its

MSP responsibilities with regard to the DCIA;

Promote beneficiary satisfaction with the Medicare MSP program through operational excellence;

Effectively support CMS in its MSP litigation and negotiation efforts as necessary throughout the course of the contract; and

Effectively manage a relationship with other CMS-contracted entities that may affect the MSPRC’s recovery roles and responsibilities in its recovery pursuits

(i.e., Qualified Independent Contractors (QICs), Administrative QIC (AdQIC), 1-800-MEDICARE, Medicare claims processing contractors, COBC, and RACs).

http://www.law.cornell.edu/usc-cgi/get_external.cgi?type=pubL&target=103-62

C.2.2.3 Operational Excellence

Operational excellence addresses the quality of information systems, the effects of organizational alignment and the ability of employees to support the accomplishment of organizational goals. In support of this objective, CMS requires the MSPRC to:

Promote corporate integrity and establish internal controls and an effective quality program to achieve contractual goals and objectives; and

Work collaboratively with CMS, its contractors, and the MSP debtor community to foster the consolidation and the enhancement of Medicare MSP recovery operations.

C.2.2.4 Innovation and Technology

Innovation and technology addresses internal business results that lead to financial success and satisfied customers. In support of this objective, CMS requires the MSPRC to:

Promote efficiencies in the administration of the MSP recovery program to promote the best value for the Government;

Develop and continually refine business processes to foster excellence and quality in the administration of the Medicare MSP recovery program;

Use innovation and creative technological solutions to improve MSP recovery program operations;

Make proposals for system enhancements to improve MSP recovery operations;

Make suggestions for MSP recovery process enhancements with interface components; and

Enhance the paperless environment and use automation to the maximum extent possible throughout the course of the contract while maintaining financial integrity and sufficient audit trail.

C.2.2.5 Financial Management

Improving financial management is a key initiative in the President's management agenda and has been a long-term focus in achieving CMS’ mission. The focus of MIP is on paying the correct amount to legitimate providers for covered services, including the appropriate recovery of mistaken primary payments and conditional payments. Financial management also addresses efforts to promote cost efficiency and the ability to deliver maximum value to the Medicare Trust Funds. In support of this objective, CMS requires the MSPRC to promote the fiscal integrity of the Medicare MSP recovery program and be an accountable steward of public funds.

C.2.2.6 Risk Mitigation

Risk mitigation involves avoiding situations that would prevent the successful performance of this contract’s ongoing operational functions.

C.2.2.7 Security

Security involves the MSPRC’s ability to comply with CMS data security requirements.

In support of this objective, CMS requires the MSPRC to have a security plan that addresses:

physical site security measures;

system security measures; and hiring practices in compliance with the security measures required in a government contract.

C.2.2.8 Subcontracting Approach

Subcontracting addresses the soundness of any outside entities with which the MSPRC may choose to contract with to perform some of this contract’s functions. Note that subcontracting is not required by this SOW; however, should the MSPRC use one or more sub-contractors, CMS requires the MSPRC to:

inform CMS of all of the sub-contractors it proposes to use and the functions each sub-contractor shall perform; and demonstrate each sub-contractor’s experience related to the functions that it would be performing under the sub-contract.

C.2.2.9 Quality Assurance

Quality assurance addresses the internal controls the MSPRC shall use as its first line of defense in managing the contract. In support of this objective, CMS requires the MSPRC to maintain sufficient internal controls to assure effective and efficient operations, assure the reliability of its financial reporting, and comply with applicable laws and regulations.

C.2.3 References

The following statutes, regulations, manuals, and documents are applicable to this contract.

C.2.3.1 Statutes

The MSPRC shall comply with all applicable laws (many are currently available at http://www.cms.hhs.gov/home/regsguidance.asp). Congress may pass new legislation at any time, and the MSPRC must act to implement such legislation as timely and accurately as possible.

C.2.3.1.1 The Social Security Act, as Amended http://www.cms.hhs.gov/home/regsguidance.asp

As noted in C.1.1, The Medicare Program, the Medicare’s program authorizing law is codified in Title XVIII of the Act. The vast bulk of the traditional Medicare law is located in Parts A, B, and E (Miscellaneous Provisions) of Title XVIII; Part C is primarily devoted to private Medicare plans, and the recently-enacted Part D governs the new Medicare prescription drug benefit. The original Medicare provisions rendered

Medicare secondary to WC. Other Medicare-related authorizing statutes may be found in

Titles II and XI of the Act; other governing provisions may be found in the Internal

Revenue Code and other statutes (see Section C.2.3.1.17, Other Key Statutes).

C.2.3.1.2 Omnibus Budget Reconciliation Act of 1980

The Omnibus Budget Reconciliation Act (OBRA) of 1980 (Pub. L. 96-499) made no-fault and liability insurances primary payers to Medicare.

C.2.3.1.3 OBRA 1981

OBRA 1981 (Pub. L. 97-35) made certain GHPs primary to Medicare for individuals who are eligible for or entitled to Medicare solely on account of ESRD during a 12-month ―coordination‖ period. Any payment by Medicare during that period is conditioned on reimbursement to the Trust Fund.

C.2.3.1.4 The Tax Equity and Fiscal Responsibility Act of 1982

The Tax Equity and Fiscal Responsibility Act of 1982 (Pub. L. 97-248) made certain

GHPs primary to Medicare for services provided to employed individuals aged 65 through 69 and the spouses aged 65 through 69 of such employees. Payments by

Medicare for the same items and services covered under an employer GHP are conditioned on reimbursement to the Trust Fund.

C.2.3.1.5 Deficit Reduction Act of 1984

The Deficit Reduction Act of 1984 (Pub. L. 98-369) made certain GHPs primary to

Medicare for individuals aged 65 through 69 who are the spouses of employees of any age. It authorized recovery against third parties by direct action or by subrogation.

C.2.3.1.6 Consolidated Omnibus Budget Reconciliation Act of 1985

The Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. 99-272) made certain GHPs primary to Medicare for individuals aged 70 and older who are employees or spouses of employees of any age.

C.2.3.1.7 OBRA 1986

OBRA 1986 (Pub. L. 99-509) made certain GHPs primary to Medicare for individuals entitled on the basis of disability who qualify as "active individuals" and established a private cause of action.

C.2.3.1.8 OBRA 1987

OBRA 1987 (Pub. L. 100-203) included government employers in the MSP provisions relating to disabled individuals covered by LGHPs.

C.2.3.1.9 OBRA 1989

OBRA 1989 (Pub. L. 101-239) required the Internal Revenue Service (IRS) and the SSA to share data with DHHS to identify beneficiaries’ GHP coverage; this program is known as IRS/SSA/CMS Data Match. It also addressed the employment status of certain members of religious orders.

C.2.3.1.10 OBRA 1990

OBRA 1990 (Pub. L. 101-508) extended the ESRD coordination period from 12 to 18 months and prohibited the offering of financial incentives to enroll in Medicare instead of an employer-sponsored GHP.

C.2.3.1.11 OBRA 1993

OBRA 1993 (Pub. L. 103-66) made several changes to the existing MSP laws. It:

extended the IRS/SSA/CMS Data Match program;

extended certain provisions relating to ESRD;

abolished the concept of ―active individual‖;

made certain GHPs (including LGHPs) primary to Medicare for individuals entitled to Medicare on the basis of age when the GHP coverage was based on the individual’s or spouse’s "current employment status";

made certain LGHPs primary to Medicare for individuals entitled to Medicare on the basis of disability when coverage was based on the individual's or a family member’s "current employment status"; and defined "current employment status."

C.2.3.1.12 1994 Amendments to the Act

The Act was amended in 1994 (Pub. L. 103-432) to require that Medicare send an initial enrollment questionnaire to individuals about to become entitled to Medicare and to include interest provisions on MSP debt.

C.2.3.1.13 Balanced Budget Act of 1997

The Balanced Budget Act of 1997 (Pub. L. 105-33) changed the ESRD coordination period to thirty (30) months. It also addressed some issues in the IRS/CMS/SSA Data

Match program, clarified the effect of GHP filing deadlines on

Medicare's recovery claim to employers and GHPs, and permitted recovery against

GHPs’ TPAs.

C.2.3.1.14 Section 301 of the MMA

On December 8, 2003, the President signed the MMA into law. Section 301 supported

CMS’ longstanding statutory interpretations and policies by clarifying several aspects of the MSP provisions that had been the subject of legal challenges or industry confusion.

For WC, no-fault, and liability issues, § 301 is effective as if it were in the 1980 amendments and clarified that:

Medicare may make conditional payments after the statutory "promptness" period expires and that those payments are conditioned on repayment following resolution of the underlying WC, no-fault, or liability insurance claim;

An entity that engages in a trade, profession, or business is deemed to be self-insured if it carries its own risk in whole or in part; and

A primary plan's responsibility for payment arises when its primary payment responsibility is demonstrated. Such responsibility may be demonstrated by a judgment, a payment conditioned upon release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means.

For GHP issues, § 301 is effective as if it were in the 1984 amendments and clarified that:

Employers that sponsor or contribute to GHPs that are obligated to be primary to

Medicare are responsible for resolving Medicare GHP-related debts (whether the employer is self-insured, purchased insurance, or contributed to a GHP sponsored by another entity); and A GHP’s (including an LGHP) responsibility for payment arises when its primary payment responsibility is demonstrated. A primary payer under a GHP must repay Medicare rather than some other entity when it has knowledge that Medicare has made primary payment.

C.2.3.1.15 Section 111 of the Medicare, Medicaid and SCHIP Extension Act of

2007 (MMSEA)

The MMSEA Section 111 adds mandatory reporting requirements with respect to

Medicare beneficiaries who have coverage under GHP arrangements as well as Medicare beneficiaries who receive settlements, judgments, awards or other payments from liability insurance (including self-insurance) no-fault insurance, or workers’ compensation.

Implementation dates are January 1, 2009 for GHP arrangement information and January

1, 2010 for information concerning liability insurance, no-fault insurance, or workers’ compensation. The reporting shall be used for Medicare coordination of benefits including recoveries where applicable. All references to Section 111 in this document refer to Mandatory Insurer Reporting by registered Responsible Reporting Entities

(RREs) in accordance with MMSEA Section 111.

C.2.3.1.16 The Health Insurance Portability and Accountability Act of 1996

HIPAA was enacted on August 21, 1996. Title II, Subtitle F, of HIPAA gives DHHS the authority to mandate the use of standards for the electronic exchange of healthcare data;

to specify what medical and administrative code sets should be used within those standards; to require the use of national identification numbers for patients (individuals), covered healthcare providers, payers (or health plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable healthcare information. The identification number for patients or individuals is on indefinite hold.

C.2.3.1.17 The Benefits Improvements and Protection Act of 2000

Section 521 of the Benefits Improvements and Protection Act of 2000 (BIPA; Pub. L.

106–554) changed the Medicare appeals process to create a uniform procedure for handling all Parts A and B Medicare appeals. BIPA also specified new time frames for filing appeals and revised the timeframe that Medicare has to issue decisions.

C.2.3.1.18 Other Key Statutes

To the extent that there is no conflicting Medicare requirement, the administration of the traditional Medicare program is also governed by numerous statutes pertaining to the general administration of Federal programs. General statutory authorities with broad implications for the traditional Medicare program and the contract include, but are not limited to:

Acquisition (e.g., the FAR);

Financial management and internal controls (e.g., the Federal Management

Financial Integrity Act of 1982 [Pub. L. 97-255], the Chief Financial Officers’

Act of 1990 [Pub. L. 101-576]);

Federal Information Security Management Act of 2002 (Public Law 107-347);

GPRA;

Personnel and civil rights law (e.g., the Drug-Free Workplace Act [Pub. L. 100-

690], the Americans with Disability Act [42 U.S.C. 12101 et seq.], etc.);

The Clinger-Cohen Act of 1996 (formerly known as the Information Technology

Management Reform Act; 40 U.S.C. § 1401 et seq.);

The Rehabilitation Act Amendments of 1998, Section 508 Accessibility Standards

(29 U.S.C. § 794d);

The Federal Claims Collection Act of 1966 (Pub. L. 89-508) as amended;

The Debt Collection Improvement Act of 1996 (DCIA); and

The Privacy Act of 1974 (Pub. L. 93-579), as amended (―Privacy Act‖).

C.2.3.2 Regulations

The following regulations are of particular relevance:

42 CFR Part 411, Exclusions from Medicare and Limitations on Medicare

Payment, Subparts B-H;

42 CFR 405.900 et seq.: See particularly the sections on what is an initial determination, what is not an initial determination, reopening/good cause; and

42 CFR Part 405, Subpart C, for regulations relating to § 1870 waiver of recovery.

C.2.3.3 The Medicare Manual

The Medicare Internet Only Manual (IOM) is comprised of CMS program instructions, day-to-day operating instructions, policies, and procedures that are based on statutes and regulations, guidelines, models, and directives. The CMS program components, providers, claims processing contractors, and State survey agencies use Medicare manuals to administer CMS programs. The IOM can be found at http://www.cms.hhs.gov/Manuals/IOM/list.asp. The MSPRC shall adhere to those sections of the IOM relevant to its roles and responsibilities as cited herein.

C.2.3.4 Other References

The MSPRC shall use the following references or mutually agreed to references in its performance of various requirements:

CWF website, currently at http://cms.csc.com/cwf/default.htm;

X12 Implementation Guides adopted as national standards under HIPAA, currently at http://www.wpc-edi.com/HIPAA;

COB website, currently at http://www.cms.hhs.gov/COBGeneralInformation/;

1-800-MEDICARE website currently at http://www.cms.hhs.gov/1800medicare/;

Data Use Agreements website, currently at http://www.cms.hhs.gov/SystemLife cycleFramework/Downloads/DUA.pdf;

ReMAS e-mail address, ReMAS@cms.hhs.gov; and

Freedom of Information Act (FOIA) Request Form (CMS Form 632), currently at http://new.cms.hhs.gov/FOIA/04_reqfrm.asp.

www.cms.hhs.gov/MandatoryInsRep (This site has all official instructions for

MMSEA Section 111 mandatory MSP reporting implementation.)

C.3 Functional Requirements

Each requirement section presents the following information:

Requirement number—unique number identifying the requirement;

Requirement name and description—descriptive title and words conveying the http://www.cms.hhs.gov/Manuals/IOM/list.asp http://cms.csc.com/cwf/default.htm http://www.wpc-edi.com/HIPAA http://www.cms.hhs.gov/COBGeneralInformation/ http://www.cms.hhs.gov/1800medicare/ http://www.cms.hhs.gov/SystemLifecycleFramework/Downloads/DUA.pdf http://www.cms.hhs.gov/SystemLifecycleFramework/Downloads/DUA.pdf mailto:ReMAS@cms.hhs.gov http://new.cms.hhs.gov/FOIA/04_reqfrm.asp http://www.cms.hhs.gov/MandatoryInsRep requirement (a few sections contain only a requirement name, relying on subsections to describe requirements);

Background—information providing the context for a requirement (background information is provided as needed); and

Standards—defined levels of performance against which the quality of services can be determined. Some standards are inherent in the requirement (provided as needed).

C.3.1 Infrastructure Requirements

The MSPRC shall provide communications infrastructure and have a dedicated MSPRC

Call Center within its operating hours. The MSPRC has discretion to modify its hours of operation to maximize availability and responsiveness to its customers and access to necessary systems with CMS concurrence (e.g., ReMAS is operational from 6:00am to

9:00pm Eastern Time).

The MSPRC shall provide public access within the constraints of the MSPRC security requirements and customer service during the hours of 8:00 a.m. to 8:00 p.m. Eastern

Time, Monday through Friday. The MSPRC shall not schedule any internal system maintenance during operating hours. The MSPRC customer service center may close for up to 4 hours per month for CSR (customer service representative) training and/or staff development with the following limitations:

1. The 4 hours approved by CMS for contact center closure shall be used for training time only.

2. The training time shall not be used for corporate meetings.

3. Training time not used within a specific month shall not be carried over to the next month.

4. The MSPRC shall include in the IVR message that staff are attending training sessions to continue the level of customer service expected by the public and they should please call back during normal business hours when the MSPRC will be fully staffed.

The MSPRC shall monitor customer complaints about training time closures and take action to resolve them.