CMS Provides an Update on Civil Money Penalties: Adjusted Penalties Are Now a Maximum Penalty of $1428 per claim/per day; CMS also Adds Updates on Minor Technical Error Corrections

Written by: Gerardo Sanchez

Now that the Section 111 Civil Money Penalty Final Rule has become effective (as of December 11, 2023), the clock is ticking for the Final Rule’s impending applicability date of October 11, 2024. Recently, the Centers for Medicare & Medicaid Services (“CMS”) issued an update to correct “technical errors” (referred to by CMS as, “Correcting Document”) that were contained within the published Final Rule. CMS provided the following Summary of Errors in its Correcting Document, which notably do not result in any substantive changes in the Final Rule or in any difference in how CMPs will be imposed:

Summary of Errors

On page 70363, we inadvertently omitted a part of the header.

On page 70372, we made an error in the Words of Issuance.

On page 70373, we made technical errors in the amendatory instructions as well as the headings, entries, and table notes in the civil monetary penalty adjustment table at 45 CFR 102.3.

Titling and grammatical corrections aside, the important takeaway from CMS’ Correcting Document is that the true amount of CMPs, as adjusted annually for inflation pursuant to 45 CFR part 102, will result in a maximum daily penalty amount of $1,428.00.

The approach CMS will use to issue CMPs using this new adjusted max amount is as follows:

·         For each calendar day of noncompliance, the daily penalty is $250.00 (increased to $357.00) where the record was reported 1 year or more, but less than 2 years after the required reporting date.

·         For each calendar day of noncompliance, the daily penalty is $500.00 (increased to $714.00) where the record was reported 2 years or more, but less than 3 years after the required reporting date.

·         For each calendar day of noncompliance, the daily penalty is $1,000.00 (increased to $1,428.00) where the record was reported 3 years or more after the required reporting date.

·         CMS will cap the total penalty for any one instance of noncompliance for a given record at $365,000.00 (increased to $521,220.00).

While CMPs will not be applicable until 2024, it is important that Responsible Reporting Entities (“RREs”, also known as primary payers understand preparation is the key to avoid CMPs. Sanderson Firm’s Section 111 Reporting solution, SandersonComply, will provide clients a streamlined solution for accurate and timely reporting.

Sanderson Firm will continue to monitor updates from CMS as they become available. It is also anticipated CMS will soon release its Section 111 reporting threshold applicable for 2024, which last year was released on December 13, 2022. If you have questions regarding CMS’ Correcting Document, or if you would like to engage Sanderson Firm for our Section 111 reporting solution (SandersonComply) and/or auditing services, please contact us.