CMS Hosts Q&A Webinar Regarding Civil Money Penalties for Non-Compliant Section 111 Reporting

Written by: Brendon De Souza, Esq.

Today, the Centers for Medicare & Medicaid Services (CMS) hosted a public Question and Answer webinar for Non-Group Health Plan (NGHP) stakeholders (e.g., liability insurance, including self-insurance, no-fault insurance, and workers’ compensation insurance) regarding the imposition of civil money penalties (CMPs) for non-compliant Section 111 reporting as outlined in the Final Rule. CMS previously published a written “Frequency Asked Questions” document one month after the Final Rule’s publication, but today’s webinar is the first time that CMS publicly provided comment on the Final Rule via its own forum.

Here are a few of the major takeaways from today’s webinar:

1. The Final Rule is prospective only.

· CMS has consistently stated that the Final Rule is prospective only; however, many within the Medicare Secondary Payer (MSP) community have remained confused given the number of significant dates involved in the Final Rule (e.g., Publication Date, Effective Date, Applicable Date, etc.).

· CMS has now unequivocally confirmed that a Total Payment Obligation to the Claimant (“TPOC”) and/or Ongoing Responsibility for Medicals (“ORM”) which occur before October 11, 2024 (the Final Rule Applicable Date) are not subject to CMPs.

o Example provided by CMS in today’s webinar: A Medicare beneficiary settles their liability litigation on October 1, 2023. The Responsible Reporting Entity (RRE) reports the coverage on December 1, 2024 ->

Although the record exceeds 365 days from the date it should have been reported, the Final Rule does not consider retroactive reporting and is not subject to a penalty related to this coverage.

2. TPOC and ORM are separate reporting obligations, meaning a single CMP must attach to either the TPOC record or the ORM record rather than both.

· Many RREs were likely under the impression that CMS’ 250-record quarterly audit would select a single Medicare beneficiary “record” and evaluate both the ORM and TPOC records for potential non-compliance. That is incorrect.

· A “record” refers to either a TPOC record or an ORM record. Therefore, when CMS randomly audits records for reporting compliance, CMS will only look at either the ORM record or the TPOC record selected. While it is possible that CMS randomly selects both the ORM and TPOC records for the same Medicare beneficiary, this is statistically unlikely given the sheer volume of GHP and NGHP reporting records (note*– there are more than 20,000 currently registered RREs reporting data on Medicare beneficiaries).

3. In certain circumstances, a CMP will not be imposed if ORM was not timely reported due to an ORM being in dispute.

· In the Final Rule, CMS previously identified several “safe harbors” which would insulate an otherwise non-compliant RRE from CMP exposure (e.g., CMS modifies reporting requirements without adequate notice to the RRE, beneficiary unambiguously communicates that they refuse to provide relevant personal information, etc.).

· Today, CMS confirmed that untimely reporting of ORM may be excused if ORM is in dispute and the RRE provides evidence supporting the reason for the late reporting. We anticipate that this finding will be highly fact-dependent with CMS closely analyzing these instances on a case-by-case basis.

4. Correcting Section 111 reporting error remains incredibly important.

· If an RRE reports a beneficiary record which is later rejected by CMS, such a record would not be deemed “timely” by CMS and would be subject to a CMP unless the record is corrected, re-reported, and accepted by CMS within the 365-day timeliness window.

· If working with a third-party reporting agent, RREs must ensure that their reporting agent remains vigilant and provides regular and swift notice of reporting errors/file rejections. Failure to correct such records will subject the RRE to significant CMP exposure.

5. CMS will begin its quarterly compliance audits on April 1, 2026.

· Until today, CMS had not previously communicated exactly when it would begin auditing a random sample of 250 new and accepted beneficiary records per quarter.

· Of note, CMS also confirmed that CMS itself will make all final substantive decisions on CMPs.

Sanderson Firm Commentary

CMS’ webinar was incredibly helpful for clarifying existing questions as well as providing previously unreleased information. We commend CMS for remaining transparent about CMP application, and we hope that CMS continues to host these informative webinars in the future. As usual, please note that CMS will release its PowerPoint presentation (no audio included) in approximately two weeks on its website.

Sanderson Firm will continue to monitor updates regarding CMPs from CMS as they become available. If you would like to address specific questions, comments, or concerns directly to CMS regarding Section 111 reporting CMPs, you may contact CMS at sec111cmp@cms.hhs.gov. If you have questions regarding CMS’ webinar, or if you would like to engage Sanderson Firm for our Section 111 reporting solution and/or auditing services, please contact us.