Ask Annie: When can I safely terminate ORM?

Question: Annie, I’m hoping you can settle a bet for me. I’ve always thought that ORM should be terminated only after a settlement, death of a claimant, or when the claimant’s treating physician declares that no further treatment is required. My colleague has tried to convince me that we can terminate ORM when the claim closes. Help us settle this bet. Who is right?

Answer: Today’s question implicates Medicare’s mandatory insurer reporting requirements. Identifying and understanding how to fulfill these obligations is an important element to claims handling, made critical by the proposed regulations outlining whether and how Medicare may penalize noncompliant entities. 

A Quick Level Set

First, what is ORM? ORM stands for ongoing responsibility for medicals, which refers to a Responsible Reporting Entity’s (“RRE”) “presently assumed” obligation to pay for medical benefits associated with a claim involving a Medicare beneficiary. An RRE is a non-group health plan, like a liability, no-fault, or workers’ compensation carrier or self-insured. Medicare requires RREs to report ORM “Y” (yes) on admitted claims; by design it is rare to see ORM “Y” on a liability claim. As discussed in our prior post, payments do not have to be made for ORM to be accepted. ORM is established, “when the RRE has made a determination to assume responsibility for ORM, or is otherwise required to assume ORM.” Once ORM is assumed on a claim, an RRE must confirm the effective date. If the ORM effective date is on or after 1/1/2010, then it is a reportable event.

Once ORM is initially reported, then an RRE typically reports termination of ORM on a subsequent update when appropriate. An RRE does not report each payment for medical services for the claimant, nor does an RRE report ORM for the same claim every quarter.

Terminating ORM

Once ORM ends, an RRE must report that to Medicare. Termination of ORM must be reported within 135 days of the termination date in order to avoid a compliance flag for late reporting. Medicare defines ORM termination in a limited number of ways:

  1. Treating doctor’s note. Where there is no practical likelihood of associated future medical treatment, the RRE may submit a termination date for ORM if it maintains:
    1. A statement (hard copy or electronic);
    2. Signed by the beneficiary’s treating physician;
    3. Indicating no additional medical items and/or services associated with the claimed injuries will be required.
  2. Statute of Limitations, claim denial, and settlement, judgment, award, etc. ORM terminates pursuant to state law where the effect is that the RRE no longer considers itself responsible for ongoing medical care.
  3. Policy limits. ORM terminates per the terms of the insurance contract.
  4. Full, final, and complete settlement closing out future medical benefits. ORM terminates when a claim fully settles and all future care is closed out.

Claim Closure

If we move back to the question posed here, we realize we ultimately need a little bit more information to help these colleagues settle their bet. The “why” matters. Our question writer is correct that ORM terminates when there is a final settlement, the death of a claimant, or where the treater indicates no future care is needed. The writer’s colleague though may also be correct if they are closing the claim due the expiration of the statute of limitations or the full exhaustion of policy limits, etc. The writer’s colleague, though, is likely referring to “administrative” claim closure.

Administrative claim closure occurs when an insurance carrier or self-insured closes a claim due to inactivity. This most often occurs when a claimant has not sought treatment or other benefits under the claim for anywhere from 30 days to two years. Cases involving minor admitted injuries in states that have lifetime workers’ compensation benefits often fall within this category. The claimant treats initially and then fails to follow up or the treating physician releases the claimant to return to work full duty and at maximum medical improvement, but states “follow up as needed.” There is no provision in the state’s workers’ compensation act that allows you to formally close the file and the treating physician failed to provide the rock-solid “no future care” letter that Medicare requires to document the file. This is likely what our questioner is getting at: can one terminate ORM based on administrative claim closure? And the answer to that question, unfortunately, is no. Based on Medicare’s criteria, while one can administratively close a file, one cannot terminate ORM on that basis alone.

As referenced earlier, Medicare recently released a proposed rule to outline when civil monetary penalties would be imposed. Despite industry hopes, Medicare did not expand ORM termination criteria to include claims closed administratively. Terminating ORM based solely on administrative claim closure, puts the RRE at risk of an annually adjusted $1,000 per day per claim penalty. No matter who wins the bet here, we can all agree the risk is too great here to bet against Medicare when it comes to administrative claims closure. 

ExamWorks Clinical Solutions has the largest and most experienced team of Section 111 reporting experts in the country. With the looming threat of a final rule on civil money penalties, tap our team to check on your existing Section 111 reporting process. If you have an obligation to report but have not yet registered – do not delay. Contact our Mandatory Insurer Reporting Team at MIRService.Support@examworks-cs.com or 678-222-5454 to schedule an evaluation today.

Annie M. Davidson

Annie M. Davidson

Annie M. Davidson is the Senior MSP Compliance Counsel and Policy Strategist for ECS. In her role, Annie provides legal analysis to ensure the integrity and quality of ECS’ Medicare Secondary Payer (MSP) compliance services and related products. Prior to joining ECS, Annie practiced as an insurance defense attorney in her native Minnesota where she litigated workers’ compensation and liability insurance cases, particularly those involving MSP issues. She is admitted to practice law in the State of Minnesota and the United States District Court for Minnesota, and is a graduate of William Mitchell College of Law. Annie can be reached at annie.davidson@examworkscompliance.com or at 651-262-9618.

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