[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]


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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.

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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