Employer Voluntary Data Sharing Agreements

The Purpose of a VDSA – A Voluntary Data Sharing Agreement

A VDSA is used to more efficiently coordinate health care benefit payments between employers, their agents and Medicare, in accordance with Medicare Secondary Payer (MSP) laws and regulations and the Medicare Modernization Act.

The Medicare Prescription Drug, Improvement and Modernization Act (MMA) was enacted in 2003.  The MMA includes Medicare Part D – the Medicare prescription drug benefit.  The advent of Part D on January 1, 2006, greatly increases the need for coordination between Medicare, Group Health Plans, Employers and Insurers.

A Voluntary Data Sharing Agreement (VDSA) authorizes the Centers for Medicare & Medicaid Services (CMS) and an employer, or agent on behalf of an employer, to electronically exchange health insurance benefit entitlement information.  On a quarterly basis, a VDSA partner agrees to submit group health plan (GHP) entitlement information about employees and dependents to CMS's Coordination of Benefits (COB) Contractor.  In exchange, CMS agrees to provide the VDSA partner with Medicare entitlement information for those individuals in a GHP that can be identified as Medicare beneficiaries.  This mutual data exchange helps to assure that claims will be paid by the appropriate organization at first billing.

The VDSA program has now been expanded to include Part D information, enabling VDSA partners to submit records with prescription drug coverage be it primary or secondary to Part D.  CMS is also allowing employers, and other entities with a VDSA or DSA, who are also participating in the Retiree Drug Subsidy (RDS) program, to use the VDSA/DSA process to submit subsidy enrollment files to the RDS Contractor.  A VDSA can now be used to support an employer's participation in the Retiree Drug Subsidy. 

Notice Regarding Mandatory Insurer Reporting

 Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (PL 110-173) amends the Medicare Secondary Payer (MSP) provisions of the Social Security Act (Section 1862(b) of the Social Security Act; 42 U.S.C. 1395y(b)) to provide for mandatory reporting for group health plan arrangements, liability insurance (including self-insurance), no-fault insurance, and workers' compensation.  The provisions were implemented January 1, 2009, for information about group health plan arrangements, and will be implemented July 1, 2009, for information about liability insurance, no-fault insurance, and workers' compensation. 

CMS has designed a new and separate Webpage for information regarding these requirements.  The Web address is http://www.cms.hhs.gov/MandatoryInsRep/.

Benefits of a Voluntary Data Sharing Agreement

The agreement allows employers and CMS to send and receive group health plan (GHP) enrollment and participation information electronically.  In addition to those described above, a VDSA with Medicare provides these immediate benefits:

• Elimination of the Requirement to Complete IRS/SSA/CMS Data Match Questionnaires
  A VDSA is a cost-effective way for an employer to satisfy its requirement to complete the annual Data Match questionnaire.  Instead of the tedious work involved in completing Data Match questionnaires for all beneficiaries once a year, on behalf if an employer, an insurer will electronically exchange current GHP benefit information with Medicare at regular intervals.
• Reduction of Administrative Costs
  Most employers manually compile their Data Match questionnaires for mailing.  With a VDSA, an insurer can electronically exchange entitlement information with Medicare for its employer clients.  Electronic data interchange will not only generate administrative savings, but will also more effectively coordinate payment for health care benefits.  It is very costly for an employer to pay for benefits when it shouldn't.  Using a VDSA will help an employer or its insurance carrier to know when it or Medicare is in fact the primary payer.
• Elimination of Repayment Claims and Associated Penalties
  It can also be very costly for an employer when Medicare pays first on a claim that was actually the employer's responsibility.  The efficient coordination of benefits achieved with a VDSA ensures that all parties involved in benefits payment, including Medicare, pay first when they should.

Remember that CMS may recover incorrect Medicare reimbursement from any entity actually responsible for making primary payment, including employers or insurers.  Under the Debt Collection Improvement Act (DCIA) of 1996, CMS may recover incorrect payment debts through offsets against any monies, including tax refunds, otherwise payable by the United States Government to an insurer, employer, or other entity.  VDSA data exchange can streamline benefit administration and eliminate the need for almost all repayment negotiations and potential late or non-payment penalties.

• Access to Medicare Entitlement Data
  A VDSA allows an employer to electronically query CMS for Medicare entitlement information about any covered individuals or dependents that have GHP benefits.  Access to this information will tell an employer when Medicare is the primary payer for non-working covered GHP beneficiaries or their dependents. Additionally, when you have a more immediate need to determine Medicare entitlement, you can dial into the Beneficiary Automated Status and Inquiry System (BASIS), a Web-based application, to request and review Medicare entitlement information.  The BASIS application allows you to make a defined number of on-line queries every month.  This service is only available to VDSA participants.

For more information on comprehensive methods for data collection and sharing for your organization, and for employers a cost and time saving alternative to the traditional IRS/SSA/CMS Data Match process, please email the COB Contractor at cobva@ghimedicare.com or call 1-800-999-1118 (TTY/TDD 1-800-318-8782 for the hearing and speech impaired), Monday through Friday from 8:00 a.m. to 8:00 p.m., Eastern Time, except holidays, and ask a Customer Service Representative about the Voluntary Data Sharing Agreement program.