[Federal Register Volume 59, Number 89 (Tuesday, May 10, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-11345] [[Page Unknown]] [Federal Register: May 10, 1994] ----------------------------------------------------------------------- DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration [BPO-125-N] Medicare and Medicaid Programs; Medicare-Medicaid Coverage Data Bank Requirements: Preliminary Guidance AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: This notice informs the public about section 1144 of the Social Security Act, which is self-implementing, and provides preliminary guidance to employers who are required to report information about all individuals covered by group health plans to a newly established Medicare-Medicaid Coverage Data Bank. Information in the data bank will be used to help identify situations where employer group health plans are responsible for making primary payments for services received by Medicare or Medicaid beneficiaries. This notice provides: information on the background and legislative authority for the data bank; definitions of key terms; reporting requirements; the identity of entities that are required to, or may, report; reporting dates; penalties for noncompliance; and methods of reporting. DATES: Employers must report this information for each calendar year beginning January 1, 1994, and before January 1, 1998. Reports for calendar year 1994 must be filed no later than February 28, 1995. Reports for future years must be filed no later than the end of February of the following year. ADDRESSES: Comments: Written requests for information or comments on provisions included in this notice should be addressed as follows: For all aspects of this notice other than methods of reporting: Mr. William Zavoina, Bureau of Program Operations, 367 Meadows East Building, 6300 Security Boulevard, Baltimore, MD 21207, (410) 966-5882 and 966-9188 (faxes). For methods of reporting: Mr. John Van Walker, Bureau of Data Management and Strategy, 1705 Building, E-2, 6300 Security Boulevard, Baltimore, MD 21207, (410) 966-6371 (faxes). Copies: To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 783-3238 or by faxing to (202) 275- 6802. The cost for each copy is $4.50. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register. FOR FURTHER INFORMATION CONTACT: John Van Walker, (410) 966-6347, Methods of reporting; William Zavoina, (410) 966-7461, All other issues. SUPPLEMENTARY INFORMATION: I. Background Under the Medicare program, section 1862(b) of the Social Security Act (the Act) provides that there are circumstances under which other third party payers, such as automobile medical, all forms of no-fault and all forms of liability insurance, worker's compensation, and certain group health plans, are primary payers to Medicare. Section 1862(b) of the Act also requires that HCFA obtain from the Internal Revenue Service information concerning working beneficiaries and working spouses of beneficiaries and determine whether they have health insurance through their own or their spouse's employers. Under the Medicaid program, section 1902(a)(25) of the Act, States must use all reasonable methods to ascertain the availability of third parties who are legally liable to pay for the medical care of Medicaid recipients. Section 13581 of the Omnibus Budget Reconciliation Act of 1993 (OBRA 93) added a new section 1144 to title XI of the Act. This section requires the Secretary of HHS to establish a Medicare-Medicaid Coverage Data Bank. Under this section, employers having or contributing to group health insurance plans must report annually to the Secretary certain information, including the following: the name and taxpayer identification number (TIN) of the electing individual; the type of group health plan elected; the name, address, and identification number of the group health plan; the name and TIN of every other person covered as a result of the electing individual's election to have group health plan coverage; the period during which such coverage is elected; and the name, address, and TIN of the employer. Employers must report this information for each calendar year beginning January 1, 1994, and before January 1, 1998. The data bank was established to further the purposes of section 1862(b) of the Act in the identification of, and collection from, third parties responsible for payment for health care items and services furnished to Medicare beneficiaries and in the identification of, and the collection from, third parties responsible for the reimbursement of costs incurred by any State plan under title XIX with respect to Medicaid beneficiaries, upon request by the Medicaid State agency administering the plan. The Secretary must establish fees for services provided under section 1144 of the Act to cover the administrative costs to the data bank of providing the services. (These fees will not affect employers or other public parties and thus are not discussed in this notice.) The law limits disclosure of information by the Secretary under rules similar to those of section 6103(a) and (p) of the Internal Revenue Code of 1986 and provides for penalties for unauthorized willful disclosure. The Secretary is authorized, until September 30, 1998, to disclose any information in the data bank, obtained pursuant to section 6103(l)(12) of the Internal Revenue Code 1986 and the data bank provisions. In addition, the Secretary is authorized, until September 30, 1998, to disclose any other information in the data bank to the Medicaid State agency (as described in section 1902(a)(5) of the Act), employer, or group health plan solely for the purposes for which the data bank was established. The law also provides for penalties for failure to report required information as described in part II of subchapter B of chapter 68 of the Internal Revenue Code of 1986. Section 1144 of the Act defines several terms as well. These are Medicare beneficiary, Medicaid beneficiary, group health plan, TIN, electing individual, and employer. HCFA, acting on behalf of the Secretary, is carrying out the statutory provisions relating to the Medicare-Medicaid Coverage Data Bank. The provisions of section 1144 of the Act discussed in this notice are self-implementing. We are publishing this notice to provide general guidance to employers and other interested parties as soon as possible. We plan in the future to publish additional guidance as necessary. Employers and other interested parties may rely on the guidance provided in this notice in planning the processes and procedures that they will use to comply with the data bank requirements. We are recommending that the Congress enact legislation that delays implementation for 18 months. This proposed schedule will allow us to work with Congress and the business community to ensure that the data bank is consistent with health care reform. Although we are recommending a delay, employers should continue to comply with the existing data bank provisions in the absence of legislative changes. II. Reporting Requirements Key Definitions For purposes of this notice, the following definitions apply. An ``employer'' is defined as any entity who has, or contributes to, a group health plan, with respect to which at least one employee of such employer is an electing individual. Included in the definition of an employer are State and local governments, and religious and charitable organizations. An ``electing individual'' is defined as an individual associated, or formerly associated, with the employer in a business relationship and who elects coverage under the employer's group health plan. This includes former employees, retirees, franchisees and their employees, contractors and their employees, and employees covered as a result of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. 99- 272) continuation of health care coverage requirements. Also included in the definition of an electing individual are ``guest workers,'' who are individuals who have come to the United States from other countries. Excluded from the definition are employees who provide domestic services in the home of an employer and who receive less than a specified amount in cash remuneration for those services in a quarter. Currently, the specified amount is $50. A ``group health plan'' is defined as a plan (including a self- insured plan) of, or contributed to by, an employer (including a self- employed person) or employee organization, to provide health care (directly or otherwise) to the employees, former employees, employer, others associated or formerly associated with the employer in a business relationship, or their families. This includes those group health plans that cover only a limited number of services. Also included in this definition are multiple employer plans, Taft-Hartley trusts, and other multiemployer health and welfare benefit trusts to which an employer contributes. Also included are group health plans sponsored by an employer to which the employer does not contribute (``employee-pay-all'' plans). A ``Medicare beneficiary'' is an individual who is entitled to benefits under part A, or enrolled under Part B, of title XVIII of the Act, except that individuals 65 years of age or older who qualify solely for Medicare Part A benefits on the basis of paying premiums are excluded for purposes of the data bank provisions. A ``Medicaid beneficiary'' (also referred to as a Medicaid recipient) is an individual entitled to benefits under a State plan for medical assistance under title XIX of the Act. The definition includes State plans operating under a Statewide waiver under section 1115, ``Demonstration Projects.'' All States and territories have such a Medicaid program. A ``TIN,'' or tax identification number, is the social security number of an individual and the employer identification number of an employer. Required Information Each employer, directly or indirectly, must provide or make a reasonable good faith effort to provide the information summarized below. The information must be provided for each calendar year beginning on or after January 1, 1994 and before January 1, 1998. When an employer is unable to provide all the information specified below with respect to an electing individual, the employer must provide all available information and explain the reasons for the failure to provide the missing information. (1) The name and TIN of the electing individual. (2) The type of group health plan coverage (single or family) elected by the electing individual. (3) The name, address, and identifying number of the group health plan elected by such electing individual. This means the name and address of the group health plan elected by the electing individual and the identification number that the employer uses to identify that group health plan; and the name and address of the entity that processes claims on behalf of the group health plan and the identification number used by that entity to identify the group health plan. (4) The name and TIN of each other individual covered under the group health plan pursuant to such election. This means each other covered individual covered for some portion of the calendar year. The employer is not obligated to report TINs of infants under one year of age at the end of the calendar year for which a report will be filed and those prohibited by law from having a social security number, such as dependents of migrant farm workers who are not U.S. citizens. (5) The period during which such coverage is elected. This means the actual dates that the electing individual had coverage under the group health plan. (6) The name, address, and TIN of the employer. The employer's report with respect to each electing individual must include the required information on all group health plans of or contributed to by the reporting employer under which the electing individual has elected coverage during the calendar year and all entities that processed claims on behalf of the group health plans during any period of the calendar year. An employer is expected to obtain the name and TIN of the electing individual (item 1), the type of coverage (item 2), the plan and claims processing entity information (item 3), the coverage period information (item 5), and the employer information (item 6). When the employer does not provide the names and TINs of other covered individuals, an employer is deemed to have made a reasonable good faith effort to provide the information with respect to the name and TIN of each other individual covered by the group health plan (item 4) with respect to the reports for a specified calendar year if the employer can prove that it has established a systematic method to obtain the necessary information that includes both (i) a documented initial effort to obtain the necessary information from the electing individual and (ii) a documented follow-up effort if the electing individual does not respond to the initial effort. Reporting Entities The data bank provisions require employers to provide the required reports. Section 1144(c)(1)(B) of the Act contains a special rule that permits an employer to satisfy the reporting requirement if the report is made in accordance with section 101(f) of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. 1021). This conforming amendment to ERISA, enacted by section 4301 of OBRA 93, imposes certain obligations on plan sponsors, plan administrators, insurers, third party administrators, and any other persons who, under the plan, maintain the information necessary to enable the employer to comply with the data bank reporting requirements (hereafter referred to as ``information maintainers''). Upon request of any employer with (a) fewer than 50 employees and (b) a plan other than a multiemployer or multiple employer plan, the information maintainer must provide the required information directly to the data bank. Upon request of an employer with (1) any number of employees and (2) a multiemployer or multiple employer plan, an information maintainer must provide the required information, at the option of the information maintainer, to the data bank or the employer. In any other case, the information maintainer must provide the required information, at the option of the employer, to the data bank or to the employer. The data bank will also accept required information from entities other than information maintainers who act as agents of the employer for the purpose of providing information to the data bank. Dates of Reporting Reports for calendar year 1994 must be filed no later than February 28, 1995. Reports for future years must be filed no later than the end of February of the following year. Penalties for Failure to Report Under the Act, HCFA may impose certain penalties described in the Internal Revenue Code when there is a failure by an employer, other than a governmental entity, to report. The penalties are those otherwise associated with a failure to file a correct informational return with the Internal Revenue Service. The current base penalty is $50 for each failure associated with a report with respect to a single individual. The current potential maximum base penalty for any employer is $250,000. The penalty is increased in the case of intentional disregard of the reporting requirement. The penalty is not imposed if it can be shown that the failure is due to reasonable causes. In determining whether to impose these penalties in a particular case, we will consider all attendant circumstances, including the nature of the failure and the employer's reasonable good faith efforts to obtain and provide the required information. As previously described, there is a special rule at section 1144(c)(1)(B) of the Act that permits some employers to satisfy data bank reporting obligations through a filing in accordance with section 101(f) of ERISA. Section 4301(c)(2) of OBRA 93, enacted as a conforming amendment to section 502(c) of ERISA, authorizes the Secretary of Labor to assess a civil penalty of not more than $1000 on information maintainers for each failure to provide information to the data bank or the employer as provided in section 101(f)(1) of ERISA. A failure relates to specific information deficiencies with respect to a single electing individual. These provisions and their implementation are the responsibility of the Secretary of Labor. We will not impose a penalty under the data bank provisions upon an employer if an information maintainer has the responsibility to provide complete and accurate information to the data bank, or if the failure of the employer is attributable to the failure of an information maintainer to provide complete and accurate information to the employer, unless the failure of the information maintainer results from the failure of the employer to provide complete and accurate information to the information maintainer. We will impose penalties as described above upon an employer if the employer's agent (other than an information maintainer) fails to provide the requisite information to the data bank. Methods of Reporting OBRA 93 specifically charges us with minimizing the burden of reporting on employers. We are therefore providing for at least three methods for filing data bank reports. We will make available scannable paper forms and pre-formatted diskettes upon request by employers and publish the electronic format to be used by employers submitting reports on magnetic cartridges. We may establish limitations on employer choices based on the number of electing individuals for whom reports must be filed by an employer, information maintainer, or other entity serving as an agent of the employer in any reporting year. All reports will be sent to a single location that we will designate later this year. Additionally, we will designate a coding system to permit employers to explain certain data consistency and completeness problems when filing data bank reports and thereby greatly reduce the need for us to contact employers later concerning reporting irregularities. Additional information on methods of reporting for 1994 will be furnished to employers if the Congress does not delay implementation as we have suggested. III. Collection of Information Requirements This document contains information collection requirements that must be approved by the Office of Management and Budget (OMB) under section 3504(h) of the Paperwork Reduction Act of 1980 (44 U.S.C. 3504). We are publishing our estimate of the burden that this information collection activity will place on reporting entities in a separate Federal Register notice in accordance with our standard procedure pertaining to information collection requirements submitted to OMB for approval. That notice invites interested parties to comment on the estimate by writing to the address provided. IV. Impact Analysis Statement Executive Order 12866 (E.O. 12866) requires us to submit to the Office of Management and Budget (OMB) for review any regulatory action that is identified as economically significant; that is, may have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. In addition, we generally prepare a flexibility analysis that is consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 through 612) unless the Secretary certifies that a notice will not have a significant economic impact on a substantial number of small entities. Also, section 1102(b) of the Act requires the Secretary to prepare an impact analysis if a notice may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 50 beds. We recognize that the collective costs of complying with the requirements outlined in this notice may meet the $100 million threshold of E.O. 12866. The costs associated with this notice are the result of the statute and not established by any discretionary requirements imposed by HCFA. However, due to the economic significance of the provisions, we have submitted this notice to OMB for review and are soliciting comments on the costs and burdens associated with data bank compliance. When the final guidance is issued, a final analysis of the costs and benefits of the data bank will be made available. (Catalog of Federal Domestic Assistance Program No. 13.714, Medical Assistance Program; No. 13.773 Medicare--Hospital Insurance Program; and No. 13.774, Medicare--Supplementary Medical Insurance Program) Dated: April 14, 1994. Bruce C. Vladeck, Administrator, Health Care Financing Administration. [FR Doc. 94-11345 Filed 5-9-94; 8:45 am] BILLING CODE 4120-01-P