DATE:	August 17-18, 2006
LOCATION:	Bethesda Marriot, Rockville, MD
TIME:	8:00 AM – 5:00 PM

OCSE
x Nix, Roy	x Deimeke, Linda	x Butler, Mary
x Grigsby, Sherri	x Kenher, Chuck	x Higgs, Renee
x Young, Sue	x O'Conner, Joan	x Hale, Scott
x Marsolais, Matt	x Gallauresi, Dave	x Workie, Essey
x Newcombe, Kerry	x Stuart, Bill	x Miller, Anne
x O'Connor, Joan	x Bonar, Donna	x Cooper, Desiree
x Putze, Dennis	x Henriksen, Maureen	x Clark, Wendi

WORKGROUP:
State Representation:
x O'Neill, Dolores (MA)	x Santilli, Sharon (RI)	x Budnik, Jan (NJ)
x French, George (RI)	_ Bermudez, Rick (CA)	x Takeuchi, Jadine (CA)
x Knowles, Larry (NY)	x Bailey, Rebecca (VA)	_ Passaro, Tony (NJ)
x Simmerson, Diane (PA)	x Duncan, Melanie (AL	x Odom, Vickie (NC)
x Cooper, Sarah (OH)	x Langhorst, Joyce (NM)	x Brown, Paula (CO)
x Trammell, Annette (AR)	x Taylor, Doris (IA)	x Roland, Marty (PA)
x Donnelly, Charles (WA)
Insurance Representation/ISO/SSA/Other:
x Bachman, Janet (AIA)	x Currie, Carrie (State Farm)
x Pickard, Jennifer (CMI)	x Maddox, Paraskevi (Vivi) (SSA)
_ Giknis, John (ISO)	x Forester, Amy (Lib. Mutual)
x Litjen, Tom (PCIAA)	_ Casey, Bill (Amica)
_ Nangle, Steve (Nationwide)	x Leifer, Dave (ACLI)

Executive Summary:

The Insurance Match Workgroup is comprised of representatives from the insurance industry, State Child Support Enforcement (CSE) Agencies and the Federal Office of Child Support Enforcement (OCSE). Prior to the Workgroup meeting, OCSE hosted a series of Workgroup conference calls designed to identify the "what's" (high-level business requirements) associated with implementing a centralized insurance match, including what information States and insurers would need to perform the data exchange. The Workgroup also discussed and documented consensus items.

The next step of the insurance match implementation process is to identify how to implement the "what's" previously identified by the Workgroup.

The Insurance Match Workgroup meeting was held August 17-18, 2006 in Bethesda, MD. The purpose of the meeting was to identify and discuss options for implementing the child support insurance match provisions contained in the Deficit Reduction Act of 2005. The provisions allow OCSE to compare information concerning individuals owing past-due support with information maintained by insurers or their agents concerning insurance claims, settlements, awards, and payments and to return the matched data to State CSE Agencies to collect the past-due child support. Working together with State CSE Agencies and insurers, it is OCSE's charge to design, develop, and implement an efficient and cost effective insurance match program and provide States and insurers with options when implementing the match.

On the first day of the two-day meeting, OCSE provided an overview of the multistate financial institution data match (MSFIDM) program and process since there are similarities between the existing MSFIDM program and the Insurance Match Initiative. Day one also consisted of five State Workgroup members presenting information about their current insurance match programs and the Workgroup meeting participants identified best practices and gaps/issues with each of the State processes (more detailed information about the State presentations may be found in Chart 1-1 and Appendices A-E ). Representatives from the insurance industry shared information about personal injury and workers' compensation claims processing.

On the second day of the meeting, Workgroup participants identified and discussed insurance match implementation alternatives and documented assumptions associated with the centralized insurance match.

Assumptions:

• Participation in the insurance match is optional for State CSE Agencies and insurers
• State CSE Agencies may interface directly with insurers or ISO to conduct insurance matching (provided an agreement is reached between insurers, States, and ISO based on appropriate State legislation).
• State CSE Agencies have the option to participate in Child Support Lien Network (CSLN).
• OCSE will explore coordinating a data match process with insurers not reporting to ISO (e.g., self-insurers such as the Department of Labor, Boeing, Starbucks, etc.), and return matches directly to State CSE Agencies participating in the OCSE centralized insurance match.
• OCSE will perform automated quality control on matches returned from insurers or their agents prior to returning the matches to States.

Proposed Implementation Alternatives:

• Alternative 1 – States, using the delinquent obligor file (the Federal Tax Refund Offset File), send obligors eligible for insurance matching to OCSE. OCSE sends delinquent obligors to ISO. ISO sends matches to OCSE and OCSE sends matches to CSLN for CSLN participating States and directly to all other States that have opted to participate in the centralized insurance match. Workgroup participants rated each of the evaluation criteria for this alternative which averaged to a '5' (High).
• Alternative 2 – States submit obligors eligible for the insurance match to OCSE and OCSE matches directly with insurance companies. Insurers will continue to report claims to ISO. Workgroup participants rated each of the evaluation criteria for this alternative with a '1' (Low).
• Alternative 3 – States submit obligors eligible for the insurance match to OCSE and OCSE sends a file to CSLN. CSLN will match with ISO for all States opting to participate in the insurance match and CSLN would offer States the option to select which CSLN-services the States would like performed on the data prior to returning it to State CSE agencies (e.g., quality control/QC process). CSLN will send matches to CSLN-participating States and return the non-CSLN participating States matches to OCSE for distribution to those States. This alternative was not rated during the meeting.
• Alternative 4 – States submit obligors eligible for the insurance match to OCSE and OCSE sends a file to ISO to conduct the match. ISO returns data to CSLN for CSLN participating States and to OCSE for non-CSLN participating States that have opted to participate in centralized match. OCSE and CSLN would distribute matched data received from ISO to States.
• Alternative 5 – States submit obligors eligible for the insurance match to OCSE and OCSE sends a file to CSLN. CSLN will match with ISO to conduct the match. ISO would return data to CSLN for CSLN participating States and to OCSE for non-CSLN participating. OCSE and CSLN would distribute matched data received from ISO to States.
• Alternative 6 – Both OCSE and CSLN interface with ISO to conduct the match. OCSE would send information to ISO and return information to States for States opting to participate in the centralized match that are not participating in CSLN and CSLN States would follow the existing CSLN/State insurance match process. States may choose to participate with OCSE or CSLN.

Another method discussed to accomplish insurance matching is for insurers to check a national database via a web-based look-up feature prior to paying an insurance claim. This may be implemented in conjunction with any of the implementation alternatives.

Note:Only Alternatives 1 and 2 were evaluated during the Workgroup meeting. OCSE captured, documented and distributed a matrix containing the six implementation alternatives listed above with the evaluation criteria to the Workgroup and requested members rate each of the alternatives and return the ratings to OCSE (see Appendix F ).

State Insurance Match Processes:

Chart 1-1: State Insurance Match Process Comparisons contains information about the five State insurance match processes discussed at the Workgroup meeting including best practices, gaps/issues and notes.

Chart 1-1: State Insurance Match Process Comparisons

State	Best Practices	Gaps/Issues	Notes
Colorado (CO) Interface with State Workers' Compensation (WC) Agency (DLE) (See Appendix A for a Description of the Process)	CO statute authorizes CO to conduct insurance matches for the purposes of collecting past-due child support. Timely (daily) matches with DLE. Centralized within State. Insurers pay claims directly to CO's State Distribution Unit (SDU). Insurance carriers like this process because there is one point of contact at the State, instead of 64 individual counties. Mostly automated. Because DLE is another State agency, the WC match is cost effective (free) and easier than matching with individual insurance companies. Security and confidentiality of data is not an issue for CO because DLE sends the WC claims to the State. Therefore, CO is not sharing their data with DLE. CO does not receive closed WC claims (nor does Iowa (IA) with their WC match process).	Data elements that are not provided by the CO WC interface that would be useful to States for insurance matching purposes include Claim Type and FEIN. Iowa's in-state WC interface provides FEIN, however, California's interface does not. Only matching State WC claims, and therefore is not benefiting from interstate WC claims. Not receiving other types of property casualty claims, such as personal injury.	In 2005 CO collected nearly $2 million. CO receives WC claims that are medical only (a claim that only addresses medical costs and the funds are distributed directly to the medical provider).
Massachusetts (MA) Payment Intercept Program (PIP)(See Appendix B for a Description of the Process)	MA legislation is very specific and requires an insurance claimant to provide their SSN in order to receive settlement, claim or payment. Match against life insurance beneficiaries. No cost to State. No human intervention. Insurers involved only when a match occurs and the insurer will settle a claim with a delinquent obligor (individual is due to receive monetary settlement). Minimizes resources for both States and insurers. Work closely with insurance industryWork closely with insurance industry	No interstate claims. Only third party claims subject to match. Insurer Suggestion or Identified Issues: Insurers would like the MA insurance intercept process to be more automated (when the claims adjuster puts the information in the system). In most cases, the claimant's SSN is not important to the insurance industry; only name is important.	The match rate is between 2-3% of the total claims processed. Other users, such as MassHealth and the MA tax department use the web application, but do not have access to the child support information. Only MassHealth and the division of child support enforcement may obtain information about WC claims. MA conducts audits to ensure insurer compliance. They completed their last audit in or about 1995. The purpose of audits is to work with insurers to obtain compliance; not to penalize insurers. Priority of Payments: First Priority: Any party who has provided, or will provide, a documented benefit or service in connection with the insurance claim, such as attorneys, repair shops, and health care providers, including MassHealth/DTA. Second Priority: DOR's Child Support Enforcement Division, up to the amount of the child support lien. Third Priority: DOR's Taxpayer Services Division, up to the amount of the tax lien. Fourth Priority: Any holder of a lien not arising from benefits or services related to the insurance claim. Fifth Priority: The claimant or beneficiary.
New York (NY) Interface with ISO (See Appendix C for a Description of the Process)	State legislation requires insurers to report to State agency. No claim verification; match occurs, meets State criteria and automated notice is issued to insurer. Fully automated. Receiving claim type helps automate the process. Minimal cost to State and insurer. Centralized match through ISO.	Limited number of interstate claims. Claims without SSNs are worked manually.	Process is automated and no caseworker intervention is needed. The worker only gets involved in those cases of mistake of fact. Depending on the claim type, either an Income Withholding Notice or lien is generated to the insurer. 95% of claims received from ISO are from WC claims. ISO sends NY open claims once per month and NY conducts the match. Attorneys and medical providers receive their portion of the claim prior to child support.
Rhode Island (RI) and The Child Support Lien Network (CSLN) (See Appendix D for a Description of the Process)	Minimizes impact on insurers; no additional reporting required. ISO/CSLN match is transparent to insurers. Centralized for participating CSLN States. Standardized interface with ISO. Secure website provided for insurers that opt to perform a look-up prior to paying a claim. Offer States customized, secure website for claims enforcement, on-line processing and reports management. No cost to insurer for participating in CSLN through ISO. CSLN augments child support staff – matching, review of claims, verifications, etc. Provide location information and enforcement leads (e.g., good address for income withholding; asset information for enforcement and modification of orders). Insurers share claim data with CSLN through one source: ISO.	Not all insurers participate in CSLN. Not all insurers report to ISO (e.g., State and Federal governments and large corporations). ISO does not capture FEINs from insurers. Not all claims contain the claimant's SSN. State pays for match at time of claim, not at time State receives collection. Therefore, the State may pay for a match, but not get a collection because the obligor filed a claim but did not receive a payment/settlement.	State Farm noted concern about data privacy when ISO performs the search going back one year. CSLN stated insurers may opt to only have new claims subject to the match. CSLN noted that Texas increased the number of matches from 20,000 to 1.4 million over 3 months when matching against one year's worth of claims data. CSLN stated that more than 50% of matches returned from ISO are not returned to states because the matches do not pass the QC process. RI believes that the vendor, Maximus, owns the CSLN software. RI developed CSLN using Federal grant money under a Special Improvement Project (SIP) grant. The Federal Government currently funds 66% of State child support enforcement programs and therefore provides CSLN States partial funding to pay their CSLN costs. CSLN noted the QC process consists of running algorithms (automated) and manual processes including; filtering the matches for duplicates, medical only cases, determining if States received the matches through other sources, confirming that the match is on the individual submitted by the State, providing insurer contact information to States, etc.
Iowa (IA) Interface with CSLN (See Appendix E for a Description of the Process)	If a State receives matches through CSLN (or ISO) they should also match with their State's WC agency to avoid missed matches. Receive interstate claims. Use established criteria for Federal tax refund offset submittal. CSLN removing duplicate matches from the IA/WC match saves State resources. Interface with ISO is transparent to insurers. CSLN uses matching criteria other than name/SSN to verify matches.	Some insurance claims matches may "fall through the cracks"; timing of receiving match. Not all insurers participate in CSLN. Not all insurers report to ISO (e.g., State and Federal governments and large corporations). Not all claims contain the claimant's SSN. State pays for match at time of claim, not at time State receives collection, therefore the State may pay for a match, but not get a collection because the obligor filed a claim but did not receive a payment/settlement.	IA matches with CSLN and their State WC agency. IA stated that system processing is a reason why a State will decide to match weekly or monthly instead of daily. Centralized insurance match process. IA receives 3-8 matches a week from CSLN. IA contacts insurers after receiving the match from CSLN about all their pending cases with that particular insurance company. IA spends a lot of time attempting to determine when the claim will be paid so the activity can be tracked and to ensure payment. Insurance companies are loaded into IA's system based on FEIN because IA issues income withholding notices to insurers. Iowa seizes 50% of lump sum settlements and requests that attorneys take their portion out of the other 50% balance remaining.

Lifecycle of Insurance Claims

State Farm provided a description of the personal injury (PI) claims process from an insurer's perspective and noted the following:

• Investigating a PI claim can take 2 minutes to 3 hours and the average is a few minutes.
• All bodily or personal injury claims are reported to ISO.
• Most claims are settled within 30 days. State regulations may dictate a timeframe in which claims must be settled.
• State Farm adjusters like the MA look-up process because it is quick and easy to use.

Question 1: How many minutes, per claim, does it take a claims adjuster to enter information into the Massachusetts PIP system?
Answer 1: Typically, it takes 2 to 3 minutes to check the PIP system. If there is a hit, it requires the adjuster to enter more information which may take an additional 10 to 15 minutes.

Question 2: Does an insurance company ever change the claim number?
Answer 2: No, however if another insurance company is involved, there may be two unique claim numbers assigned to the same claim, each assigned by the insurers involved.

Question 3: If there are two insurance companies involved in a claim and both insurers participate in CSLN, will CSLN receive both claims from the different insurers?
Answer 3: If both insurers participate in CSLN, a match will be received from both companies.

CMI (Wal-Mart) provided a description of the workers' compensation process from an insurer's perspective and noted the following:

1. Focus on the loss of work claims because medical-only claims are not paid directly to the employee.
2. The majority of workers' compensation claims are recurring (about 95% to 96%) and only 4% to 5% are lump sum payments.
3. Loss of work payments will be the biggest benefit to the child support program.
4. CMI reports claims to State WC agencies within 10–14 days. Each State has different reporting requirements.

Discussion and Comments:

• Underwriting and claim systems do not communicate with each other. Therefore, it will be difficult for insurers to obtain an SSN if it was not provided.
• Claim types other than WC and PI are reported by insurers to ISO, such as auto and property claims.
• Life insurance beneficiary payments are usually paid within 24 hours of receiving the death certificate so there may be a timing issue with life insurance companies receiving intercept notices from States. There is no central repository of life insurance claims/benefits information. Therefore, matching would need to occur with individual insurers.
• The life insurance industry representative noted it would be cumbersome to match against annuities. MA law requires the reporting of annuities, however they are not enforcing it at this time. There may be technical difficulties and there would be resistance from the life insurance industry to conduct matches. Some annuity benefits are 50 years old and not on a database and therefore insurance companies could not fully automate the matching process.
• The life insurance industry representative stated that there are very few matches occurring in MA.

Implementation Alternatives

1. OCSE, using the delinquent obligor file, sends delinquent obligors to ISO. OCSE sends matches to CSLN for CSLN participating States and directly to all other States. Workgroup participants rated each of the evaluation criteria for this alternative which averaged a '5' (High).
2. OCSE matches directly with insurance companies. Insurers will still report claims to ISO. Workgroup participants rated each of the evaluation criteria for this alternative with a '1' (Low).
3. OCSE will send a file to CSLN. CSLN will match with ISO for all States- CSLN would offer QA on matches; it would be the States' discretion whether they wanted QA or not. CSLN will send matches to CSLN States and return OCSE the matches for the Non-CSLN States; OCSE will distribute the matches to the Non-CSLN States. This alternative was not rated during the meeting.
4. OCSE, using the delinquent obligor file, sends delinquent obligors to ISO. ISO would return data to CSLN for CSLN participating States and to OCSE for non-CSLN participating States.
5. OCSE would send delinquent obligor file to CSLN. CSLN would interface with ISO, and have ISO conduct match. ISO would then return data to CSLN (for participating States) and to OCSE (for non participating States). CSLN and OCSE would then pass on the match information to the States.
6. Insurers check a national database via a web-based look-up feature prior to paying an insurance claim.

Discussion and Comments:

• State Farm noted any implementation alternative building on the current process of insurers reporting to ISO and ISO conducting the match for child support reporting purposes would minimize the impact on insurers. It was noted that insurers would not be concerned with which entity, CSLN or OCSE, conducted the match with ISO because the process would be transparent to the insurer.
• The following were identified as insurance match implementation assumptions:
• State CSE Agencies may interface directly with insurers or ISO to conduct insurance matching (provided an agreement is reached between insurers, States and ISO based on appropriate State legislation).
• State CSE Agencies have the option to participate in CSLN.
• Insurance industry representatives stated insures would object to ISO sending their database to OCSE to conduct the match. Instead, insurers would be more willing to support ISO conducting the match.
• OCSE is tasked to implement the insurance match legislation taking into consideration efficiency, cost-effectiveness and impact on all parties involved.
• A suggestion was made for OCSE and CSLN to match with ISO and States would have the option to participate in the match with either CSLN or OCSE. Insurance industry representatives noted that ISO may have an issue matching with two separate entities and may re-evaluate the cost for the match.
• An implementation alternative could be for CSLN to only do the match with ISO and return the raw data without QC to States.
• If there are multiple implementation alternatives that allow States to select how they will participate in the insurance match, some States that want to continue using CSLN may have difficulty obtaining approval if the cost for the CSLN match is greater than the cost for the match provided by OCSE.

Question: Would CSLN offer States the option to select CSLN services and charge States according to the services selected?

CSLN stated they do not want to eliminate the QC process because insurers are more apt to receive valid intercept notices from States if the data has been through QC. CSLN has the ability to return matches to states without QC; however, the QC process is beneficial because States pay per match and want to ensure the matches are ready to be sent to the insurer.

States may benefit from address information on closed claims. CSLN could return that information with an indicator.

States would like matches from insurers edited much like OCSE does with MSFIDM information returned to States because some States do not have the resources to perform manual QC.

Question: Would insurance companies consider updating the claim status when the claim is closed?

Many insurance companies report updated information including closed claims to ISO. CSLN receives an open/closed indicator from ISO, but not on all claims.

Property/casualty claims are closed after an extensive interview with the claimant ensuring that all the bills were paid and the claimant is satisfied. Closed on an insurer's system would indicate closed for child support purposes.

State Farm indicated they would not have an issue with adding an indicator, where possible, and thought other insurers would agree.

Note: OCSE will populate the evaluation criteria matrix with the implementation alternatives and distribute it to Workgroup members to complete the rating. A copy of the evaluation criteria matrix is in Appendix F.

Suggested Practices:

• Insurers should add a data element to match one to two weeks prior to expected payout. This will ensure payments are not missed by child support agencies.
• OCSE should pursue matching directly with self insurers not reporting to ISO.
• Currently insurers are sending States insurance intercept funds via paper check. States and insurers should explore the possibility of sending payments electronically.
• Develop a mechanism (interactive website) where insurers can check the amount of the payment and States can check the status of the claim.

Wrap-Up

• State Farm is not opposed to participate in matching for child support purposes (as long as it does not cause a burden for insurance companies). However, State legislation addressing non-liability would be required. The following concerns were noted:
• Impact on insurer resources (number of "clicks" or actions required for matching).
• Immunity for providing requested information (State-specific legislation).
• Precise priority of lien payments.

Action items captured throughout the meeting are listed below.

Action Items:

1. OCSE will work with the life insurance industry to identify account types carried by insurers that meet the definition of account under the financial institution data match legislation (e.g., IRAs).
2. OCSE will contact ISO to determine the types of claims in the ClaimSearch database in addition to WC and PI and request a list of self insurers providing claims data to ISO.
3. OCSE will update the "Insurance Interface" slide in the presentation by adding a box to include the interfaces with State WC agencies and update the data flow information for NJ and RI.
4. OCSE will coordinate the effort to obtain information about State laws authorizing liens/levies and providing immunity to entities for child support reporting and collection purposes.
5. OCSE will determine if there are NACHA approved codes for sending insurance payments via EFT/EDI.
6. OCSE will identify self-insured companies (those participating in ISO and those not participating in ISO).
7. OCSE will determine how much ISO charges for matching.
8. OCSE will determine whether other States have the same or similar legislation as MA that requires claimants to provide their SSN to insurers prior to receiving payment on an insurance claim.
9. States to complete the Alternatives Analysis Evaluation Criteria matrix and return to OCSE.
10. OCSE will determine whether other States have the same or similar Medicaid legislation as NY, which requires insurers to report claims information to a State agency.
11. NY will provide the number of matches on an exception report.
12. MA to provide the number of registered users of their PIP system.

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A. COLORADO WORKERS' COMPENSATION PROCESS

Data Elements from DLE:

• Name (First, Middle, Last)
• Social Security Number
• DOB
• Claimant Address (Street, City, State, Zip)
• Date of Injury
• Date Claim Received
• Insurance Company Name
• Insurance Company Block Number
• Claim Number (Workers' Compensation)
• Claim Number (Insurance Company)
• Employer Name
• Employer Address (Street, City, State, Zip)
• Employer Phone Number
• Adjusting TPA Name, Address, Phone and Block Number

B. MASSACHUSETTS PIP PROCESS

C. NEW YORK INSURANCE MATCH PROCESS

Data Elements from ISO:

• Social Security Number
• Claimant Name (First, Middle, Last)
• Claimant Address (Street, City, State, Zip)
• Claimant DOB
• Date of Accident
• Type of Claim
• Attorney Name
• Attorney Address (Street, City, State, Zip)
• Claim driver License ID# and issuing State
• Insurance Company Name
• Insurance Company Address (Street, City, State, Zip)
• Insurance Company Phone Number

D. CSLN PROCESS

E. IOWA INSURANCE MATCH PROCESS

F. EVALUATION OF ALTERNATIVES

Assumptions:

1. Participation in the insurance match is optional for State CSE Agencies and insurers.
2. State CSE Agencies may interface directly with insurers or ISO to conduct insurance matching (provided an agreement is reached between insurers, States and ISO based on appropriate State legislation).
3. State CSE Agencies have the option to participate in CSLN.
4. OCSE will explore coordinating a data match process with insurers not reporting to ISO (e.g., self-insurers such as the Department of Labor, Boeing, Starbucks, etc.), and return matches directly to State CSE Agencies participating in the OCSE centralized insurance match.
5. OCSE will perform automated quality control on matches returned from insurers or their agents prior to returning the matches to States.