Understanding TPOC for Liability Insurance

Should you report a TPOC or ORM? CMS coined the term Total Payment Obligation to Claimant or TPOC to mean a lump-sum judgment, award or payment to an enrolled beneficiary. If you are making medical payments to a provider (e.g., hospital, doctor, etc.) then you have accepted Ongoing Responsibility for Medicals or ORM. It does not matter which type of insurance For instance, you can report a TPOC for a no-fault MedPay policy or ORM for a liability policy. See our No-Fault Settlements November 2011 Newsletter Article for reporting TPOCs for no-fault policies and consider the following situation in which one of our clients reported ORM under a liability policy. Our client, a hospital, was sued for medical malpractice. The self-insured hospital agreed to pay for all medical treatment related to the injury and separately settled non-medical damages. They reported ORM beginning with the date of injury. The settlement for non-medical damages (e.g., pain and suffering) was not reportable -- no medicals were claimed or released. Cases involving more than one type of insurance It is important to consider each insurer's (insurance type) settlement. Much like the case above, if a workers' compensation carrier pays indemnity and medical claims, they have accepted ORM. If they subsequently compromise or commutate the claim through a lump-sum payment, they terminate ORM and report the settlement amount as a TPOC. But what if there was a separate liability settlement related to the incident? The key to reporting is, much like the case above, were there medicals claimed or released in the liability settlement? Reporting Multiple TPOCs The advent of opportunity to report additional Total Payment Obligation to Claimant (TPOC) amounts has led some liability insurers to draw incorrect conclusions. The most straightforward reporting situation is one in which the liability is contested or only one final payment is made at settlement. CMS instructs Responsible Reporting Entities (RREs) that "... only one Section 111 claim report is required after the TPOC Date." and "The TPOC Date is the date the obligation was established." You paid before you settled If the liability plan paid claims before determining the TPOC, then the RRE must submit two reports: the first indicating "ongoing responsibility for medicals" with no TPOC information (zeros in the fields) and the second terminating ongoing responsibility and providing the TPOC amount and date. In order to understand the rationale behind that reporting requirement, it is important to understand the definition of "Ongoing Responsibility for Medicals" or ORM. CMS states: "responsibility for medicals (including a termination date, where applicable) is to be reported without regard to whether there has also been a separate settlement, judgment, award, or other payment outside of the payment responsibility for ongoing medicals. Reporting for ORM is not a guarantee by the RRE that ongoing medicals will be paid indefinitely or through a particular date; it is simply a report reflecting the responsibility currently assumed." ORM is not limited to workers' compensation and no-fault plans. Once a liability insurer pays a claim (e.g, ambulance), they have evidenced by that act to have accepted responsibility and become the primary plan and Medicare pays secondary (See CFR 411.21). They must report they have ongoing responsibility for medicals or ORM = Y. Medicare goes on to state, "...that. It’s important to understand the reference to “ongoing” is not related to “ongoing reporting” or repeated reporting of claims under Section 111 but rather the RRE’s responsibility to pay on an ongoing basis for the injured party’s (Medicare beneficiary’s) medicals associated with the claim." Second it is important to review the meaning of Total Payment Obligation to Claimant or TPOC. CMS defines TPOC as "...the Total Payment Obligation to the Claimant without regard to ongoing medical services," or the final settlement amount regardless of what had been paid up until that point. Medicare's written direction in these situations is as follows: "For claims where there is no settlement, judgment, award, or other payment TPOC (which is essentially a single payment obligation, regardless of how the actual payout is structured) but the insurer (including self-insured) or workers’ compensation has assumed ongoing responsibility for medicals associated with the claim (ORM) for the injured party, two reports under Section 111 are required. The first report is when the no-fault insurance, liability insurance (including self-insurance) or workers’ compensation assumes the ORM and the second is when ORM terminates. The RRE provides basic information about the claim in the first report including a ‘Y’ in the ORM indicator and the no-fault insurance policy limit (if applicable). On the second report, the RRE provides the ORM termination date (date when ongoing responsibility for medicals ended) and, if a no-fault case, the date the no-fault policy limit was exhausted (if applicable). The first report will be an add record and the second report will be an update record. The second report will have a ‘Y’ in the ORM Indicator too. The RRE does not provide a TPOC Date and TPOC Amount on either report of ongoing responsibility for medicals unless there was a settlement, judgment, award, or other payment TPOC amount in addition to the termination of the ORM." In summary All types of insurance may at one time or another report either TPOC or ORM or even both situations in one report. A general rule of thumb is that if you paid the beneficiary report a TPOC; if you paid a provider, report ORM. Reporting multiple TPOCs was really aimed at collecting additional payment information for mass tort settlements and should probably be rarely used. Still Confused?

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