Responsible reporting entities that fail to comply will be subject to penalties of $1,000 per person per day. Organizations that had a Voluntary Data Sharing Agreement (VDSA) and Voluntary Data Exchange Agreement (VDEA) prior to the Section 111 regulation were required to submit their first report by March 31, 2009, while the remaining RREs must submit their first report by October 31, 2009.

In working with RREs to address the new reporting requirements, West Monroe Partners is discovering that many organizations never collected the required data in the first place, and some do not have required data readily available for reporting. Required data includes employer identification number; Social Security numbers for all members, subscriber and dependents; group size; and current employment status of members.

Some RREs are using ad-hoc compliance solutions to address reporting requirements, while others have created manual reporting processes. But, many of these processes do not address the regulatory requirements completely—or they are highly inefficient.

An effective compliance solution should begin with a thorough current-state assessment of the relevant processes, constituents, healthcare value chain dependencies, and available data variables.

Once the RRE understands its current state, it can develop a gap analysis to determine where the current process will fall short from a regulatory, process efficiency and technology standpoint. Then, from the gap analysis, the RRE can define a future-state reporting solution and a roadmap for implementing the required changes.

Unlike other compliance solutions, however, Section 111 may offer significant hidden financial benefits for some RREs. Complying with the regulation, in fact, can help RREs identify members who are Medicare eligible and, in some situations, those members who are Medicare primary—enabling RREs to identify overpaid claims.

Our experience has shown that depending on the plan, RREs may be able to recuperate $4 to $6 per member in overpaid claims. Responsible reporting entities, therefore, should complete a coordination of benefits (COB) analysis following implementation of a compliance reporting solution. What may seem like a regulatory burden today just might turn into a financial gem tomorrow.

For more information on Section 111, please contact Munzoor Shaikh on this page.