Who is the Responsible Reporting Entity “RRE”?
Quite simply, the party funding the payment directly to the claimant is the Responsible Reporting Entity.
In a continuing effort to help keep you up-to-date on happenings in Medicare contributor Gould & Lamb, offer a summary of important and timely information of who the Responsible Reporting Entity (RRE) is continues to draw many questions throughout the industry. There are various industry opinions and policies contrary to the Centers for Medicare & Medicaid Services’ (CMS) published statements on this topic. CMS’ most current published guidelines on who is the RRE are summarized below. While CMS has indicated they are reviewing this subject, their current policy is very plain. The following is from CMS’ Mandatory Insurer Reporting (MIR) Announcement released in August 2008 and can be found in the CMS Supporting Statement document on Pp 13-14.
42 U.S.C. 1395y(b)(2)(A) provides that an entity that engages in a business, trade or profession shall be 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. Self-insurance or deemed self-insurance can be demonstrated by a settlement, judgment, award, or other payment to satisfy an alleged claim (including any deductible or co-pay on a liability insurance, no-fault insurance, or workers’ compensation law or plan) for a business, trade or profession. See also 42 C.F.R. 411.50.
SPECIAL CONSIDERATIONS WHERE LIABILITY SELF-INSURANCE WHICH IS A DEDUCTIBLE OR CO-PAYMENT FOR LIABILITY INSURANCE, NO-FAULT INSURANCE, OR WORKERS’ COMPENSATION IS PAID TO THE INSURER OR WORKERS’ COMPENSATION ENTITY FOR DISTRIBUTION (RATHER THAN DIRECTLY TO THE CLAIMANT):
As indicated in the definition of “liability self-insurance,” such deductibles and co-payments constitute liability self-insurance, and require reporting by the self-insured entities. However, in order to avoid two entities reporting with possible confusion where the deductibles and/or co-payments are physically being paid by the insurer, CMS is considering requiring such deductibles and co-payments to be reported as part of the insurer report. CMS specifically seeks comments on this approach. If this approach is not adopted, both entities will have to report in this situation. Regardless of the final decision on this approach, CMS may need to add a few additional data elements (in the form of a question or otherwise) so that it will clearly be able to identify such situations.
It is clear that where the deductible is funded by the insured, CMS is considering this a type of self-insurance and requires the insured to register and report. It should be noted where CMS indicates that if the deductible is paid to the insurer, not the claimant, CMS was considering a position that the insurer be the RRE to avoid the requirement of dual reporting. CMS clarified this position on 3/16/09 with the release of the User Guide. The following excerpt is from the User Guide:
Where an entity is self-insured for a deductible but the payment of that deductible is done through the insurer, then the insurer is responsible for including the deductible amount in the amount it reports as a settlement, judgment, award or other payment.
In summary, if the insured funds payments to the claimant in the form of a deductible they are the RRE. If the insurer funds payment to the claimant within the deductible layer and seeks reimbursement from the insured, the insurer is the RRE. This “funding method to the claimant” philosophy continues to excess insurance and reinsurance as well. See below from the CMS User Guide published on 3/16/09:
For re-insurance, stop loss insurance, excess insurance, umbrella insurance, guaranty funds, patient compensation funds, etc. which have responsibility beyond a certain limit, the key in determining whether or not reporting for 42 U.S.C. 1395y(b)(8) is required for these situations is whether or not the payment (from the excess/reinsurer) is to the injured claimant/representative of the injured claimant vs. payment being made to self-insured entity to reimburse the self-insured entity (for payments made to the claimant). Where payment (from the excess/reinsurer) is being made to reimburse the self-insured entity, the self-insured entity is the RRE for purposes of the payment made to the injured individual and no reporting is required by the insurer reimbursing the self-insured entity.
Again, once the re-insurance or excess insurance level is pierced, it is a function of who is funding the payment to the claimant that determines the RRE. If the insurer begins funding payments, they become the RRE. If the insured continues to fund the payments and seeks reimbursement from the insurer, they remain the RRE.
The party funding the payment directly to the claimant is the Responsible Reporting Entity.
CMS may change their rules and this is a fluid environment, but due to the enormous number of questions being posed on this topic and the confusion it has generated, we felt it was prudent to revisit CMS’ current policy with all clients. If you have been receiving conflicting information from any party, please feel free to share this communication with them and obtain their source and reference for their current position regarding who the RRE should be. Please feel free to contact us with any comment or questions.
Author: Gould & Lamb welcomes questions feedback and comments. Contact them at: 866-MSA-FILE (672-3453).
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