Those in the workers’ compensation sector are navigating significant changes and aggressive timetables related to new mandatory reporting rules for Workers’ Compensation Medicare Set-Aside Arrangements (WCMSA). The expansion of SCHIP Section 111 Non-Group Health Plan (NGHP) Total Payment Obligation to Claimant (TPOC) will now require inclusion of WCMSA information. Reporting of WCMSA is expected to begin April 4, 2025. The new requirements have many reporting organizations and their partners exploring the reporting requirements, deadlines and ramifications. The alert from CMS for WCMSA can be found here.
CMS, during their recent Townhall conference held on April 16, 2024, stated that while the overall structure for penalties will not change, required mandatory WCMSA fields if not submitted accurately could prevent an RRE from reporting claims timely for ORM or TPOC. This stems from the October 11, 2023, release by CMS of a final rule specifying how and when CMS will calculate and impose civil money penalties when non-group health plan responsible reporting entities (RREs) fail to meet their Medicare Secondary Payer (MSP) reporting obligations, according to this CMS alert. Read the text of CMS Federal Register Final Rule Civil Money Penalties in its entirety here.
The accelerated timetable will quickly be upon plans and reporting entities, meaning the time is approaching for reporting entities that report Workers’ Compensation, Liability and No-Fault claims to prepare to meet reporting requirements. Beginning October 11, 2024, CMS will begin its process of randomly monitoring claims for late reporting of claim settlements and on-going responsibility for Medical.
In October 2024, CMS will begin monitoring for late TPOC (total payment obligation to claimant) and late reporting of On-Going Responsibility for Reporting “ORM.” The process of randomly selecting claims for review, and the issuance of any penalty notifications, will begin in October 2025.
For Medicare beneficiary settlements, claims must be reported within one year of the applicable reporting window. Penalties will not be assessed to RREs that have made a “good faith effort” to find the information. Such an effort includes two written (via U.S. Mail) and one digital (phone, email, fax, etc.) outreach to obtain the information required to report, including an individual’s full name, date of birth, gender and Social Security Number.
Penalties associated with non-compliance will be stiff. They will increase in 2024 according to the following schedule:
$357 per day for every day “for which the required reporting data should have been submitted” between one to two (1-2) years previously.
$714 for each day from two to three (2-3) years after the required reporting date.
$1,428 for each day beyond three (3) years after the required reporting date
The maximum total per claim penalty is $521,220 for claims reported beyond three (3) years late. That’s how seriously organizations must treat claims reporting.
There will be no specific “targeting” of filers. CMS will randomly select 250 claims per quarter nationwide among non-group health plan and group health plan filers. As such, this will reduce filers’ chance of facing an audit or penalty. But the chance of an audit still exists, so organizations should work to comply.
If selected, what can trigger an investigation? Simple errors can easily thwart compliance, even those leading to a claim getting caught up in the system. Organizations can be penalized for late reporting of ORM and late reporting of TPOC. This often occurs when an organization or adjuster was waiting on a claimant’s full name, date of birth, gender, or Social Security Number as needed to identify Medicare eligibility.
Contrary to previous guidelines from Medicare about when to terminate, new guidelines released in November 2021 by CMS provide new ORM termination rules. Utilizing good standard practices terminating ORM based on the new CMS rules or using automation to terminate following CMS requirements is a good solution.
For organizations with hundreds of thousands of claims, implementing a system to manage ORM termination could take a lengthy trial- and- error period to implement automation. The Medicare Advantage Plan (MAP) data provision is a significant consideration (read the official CMS alert here). Large insurance providers are grappling with how to incorporate data into their processes, as MAP providers are able to pursue the same recoveries as Medicare.
Anticipating this change, Broadspire invested time into programming a solution to automate the process, incorporating the necessary MAP fields as a way to reduce claims adjusters’ workloads and possible oversight. This integration of MAP retrieval directly into the claim application helps ensure an effort to comply with MAP’s right to recovery.
What’s next?
Take advantage of the period between now and October 11, 2024, when the final rule will become applicable, and October 2025, when Mandatory Insurer Reporting and Civil Money Penalties will begin. To be clear, they will not work retroactively to apply penalties, unless you haven’t reported as of October 11, 2024, and the RRE reports that claim more than one-year late for ORM or TPOC. Upon that date, Medicare – not its contractor agencies – will start examining files for late reporting.
Jay Blake began his career in insurance as a CAT adjuster in 2005, embarking on his first deployment during Hurricane Katrina in New Orleans. Over the next five years, he participated in various deployments before joining Cunningham Lindsey as a staff adjuster. During his tenure there, Jay garnered experience holding multiple positions, culminating in his role as a Property General Adjuster for Major & Complex Loss. His extensive field experience laid a solid foundation for his career at Crawford & Company, which began in 2016 when he joined as a Team Manager.
Today, Jay serves as the vice president – managing director of the Alternative Inspection Solutions (AIS) division at Crawford & Company. His ground-up journey has prepared and empowered him with a deep understanding of the industry and the unique challenges and opportunities it presents.
Moving the needle through innovative claims handling:
In his current role, Jay oversees two primary verticals within AIS. The first focuses on roof and exterior inspections, providing comprehensive ladder assists. The second vertical is dedicated to virtual adjustments, offering rapid, efficient handling of high-volume, low-severity claims. By leveraging the latest technological advancements and a talented team, Jay and the AIS team ensure quick and accurate claim resolutions for clients who may be experiencing workforce shortages or who are looking to reduce time-in-process and increase customer satisfaction.
The AIS team, with Blake at the helm, includes director of operations, Bruce Karr, along with a cadre of virtual adjusters and an extensive roster of inspectors across the nation. Jay’s leadership emphasizes quality, accuracy, expertise, and speed as the cornerstones for anticipated significant growth for Crawford’s AIS in the coming years. All inspectors are encouraged to obtain Haag certification, while virtual adjusters are trained to be Xactimate L2 certified, promoting high operational standards and subsequent output.
Cultivating growth & excellence through exemplary leadership:
Jay’s proudest achievements revolve around fostering growth and advancement within his team. His leadership style is characterized by leading by example, leveraging individual strengths, and helping team members overcome challenges with patience and a positive attitude. Jay credits Larry Milburn, COO of Loss Adjusting at Crawford & Company as a mentor and friend, for providing guidance and opportunities that have been instrumental in his career at Crawford.
Jay has also been actively involved in multiple committees at Crawford,s including the CIQ mobile app Committee, Atlas Committee, and Technology Committee. His contributions have been pivotal in developing Crawford’s first mobile application and other technological advancements.
“At Crawford, our technology + people have always been our great differentiator. This allows us to embrace alternative methods of inspections and thrive in the ever-evolving landscape of loss adjusting.”
– Jay Blake
Why partner with Crawford’s AIS?
Crawford’s AIS department offers a robust suite of technology-forward inspection options tailored to meet diverse client needs. Qualified adjusters work closely with client teams to triage and process claims efficiently, utilizing tools such as Matterport, Hover, Claims Xperience, and EagleView. These technologies address resource scarcity, improve consumer experiences, and reduce cycle times, ensuring swift, accurate estimate delivery.
AIS stands out in the virtual claims adjusting space due to its seamless integration of cutting-edge technology united with highly skilled personnel. Long-standing partnerships with companies such as Verisk, Hover, Hosta AI, and Planr allow AIS to utilize the latest innovations to manage claims from start to finish. Technological integration, combined with a dedicated team, ensures the delivery of best-in-class solutions to clients.
Looking ahead:
Jay and the AIS team are committed to providing tailor-made solutions that meet the unique needs of their clients. With a focus on quality, efficiency, and innovative technology, AIS aims to continue delivering exceptional service and enhancing customer satisfaction in the claims handling process.
AIS, under Jay Blake’s leadership, is a testament to Crawford & Company’s commitment to innovation, quality, efficiency and overall client satisfaction. With these goals at the forefront, AIS is well-positioned and ready to restore.
To learn more about Crawford’s Alternative Inspection Solutions, e-mail Jay Blake at jay_blake@us.crawco.com.
Many businesses will have experienced some disruption following the CrowdStrike event on Friday, July 19. CrowdStrike has confirmed that it was a faulty update which caused an estimated 8.5 million computers[1] around the world to crash.
The outage resulted in grounded flights and broadcasters were forced off air; access to banking and healthcare services was restricted, and many businesses were unable to process orders. The full extent of any financial losses will become clearer over the coming weeks, and there remains the potential for further cyber-incidents as threat-actors seek to exploit the situation.
Responding to Cyber BI exposure
Crawford is expecting to see an increase in claims, primarily where there is cyber business interruption coverage in place or extensions which cover suppliers or outsourced providers.
The key to assessing these claims will be in the details of the policy wording. As the event was non-malicious, it is unlikely to be considered a security issue or cyber-attack. As a system outage or operational error, direct costs in responding to the incident may be excluded from coverage entirely, or in some policies, there may be specific limits or deductibles that apply. However, cyber BI wordings may however be wider in scope, specifically where cover extends to suppliers or outsourced providers.
The outage was short, with a fix deployed within hours. As such, any financial or contingent business interruption losses are likely to fall within the waiting period or time deductible, which is a feature of many cyber BI policies. However, the way a policy defines the interruption period, or the period of restoration following the event, will be an important consideration when reviewing claims for ongoing losses.
When assessing the impact of business interruption, it is important to have experts with the right experience and background, particularly for this type of short tail event. The response to a cyber business interruption exposure should include a careful review of the policy coverage to ensure that liability engages and that all claims conditions have been complied with correctly. Additionally, growth trends and potential revenue impact, both positive and negative, to include potential make up should all be considered to ensure that only losses directly related to the CrowdStrike issue are identified.
Crawford Forensic Accounting Services (CFAS) is on hand to assist. Our multi-disciplined team comes from a range of industry backgrounds, and this wealth of experience and expertise is essential to understanding how an outage may result in a financial loss. CFAS can act as an internal consultant alongside the Crawford Cyber Solution or instructed independently. Many of our claims experts have experience as both loss adjusters and accountants. We are familiar with a multitude of different cyber policy wordings, and in some cases, we have worked on the development of these wordings and definitions alongside insurers.
To find out more about how Crawford can help with your cyber and business interruption needs, contact one of our experts.
Paul Handy BSc(Hons) MBA ACII FCILA FUEDI-ELAE FIFAA ACMI Global Head of Cyber Crawford & Company
