Breaking Down the Proposed Rule on MMSEA Section 111 Reporting Civil Monetary Penalties (CMPs): The Important Take-Aways You Need to Know Now
Heather Sanderson
February 18, 2020

As we had blogged on just last week, today CMS officially published its Proposed Rule on “Medicare Secondary Payer and Certain Civil Monetary Penalties.” The link to the published Proposed Rule in the Federal Register can be found here. Additionally, CMS’ Fact Sheet on the Proposed Rule can be found here. The deadline to offer public comments to the rule is April 20, 2020.

Below is a brief summary of the Proposed Rule and the scenarios in which CMS would impose a Civil Monetary Penalty (CMP) versus when they would not:

  • CMS may issue Civil Monetary Penalties (CMPs) toward Non-Group Health Plans (NGHPs) (workers’ compensation, general liability, or no-fault insureds/self-insureds) under the following scenarios:
    • The entity fails to register as a Responsible Reporting Entity (RRE).
    • The entity fails to report a Total Payment Obligation to Claimant (TPOC) (settlement, judgment, or award) within 1 year of the date of the settlement, judgment, or award.
    • The entity’s response to CMS recovery efforts (where CMS seeks to recover conditional payments via a conditional payment notice or demand) contradicts the entity’s Section 111 reporting.
    • The entity exceeds any error tolerance threshold established by the Secretary in any 4 out of 8 consecutive reporting periods.
  • CMS will not impose CMPs against NGHPs under the following scenarios:
    • The entity reports a TPOC no later than 1 year after the TPOC date.
    • The entity complies with any TPOC reporting thresholds or other reporting exclusions published in CMS’s MMSEA Section 111 User Guides.
    • The entity does not exceed any error tolerance(s) in any four out of eight consecutive reporting periods.
    • The entity fails to report because it was unable to obtain information necessary for reporting from the reporting individual, including an individual’s last name, first name, date of birth, gender, MBI or SSN (or last 5 digits of the SSN) and the entity has made and maintained records of good faith effort to obtain this information.

What should NGHPs/RREs do now? CMS has indicated that any CMPs would be issued prospectively after the Effective Date of the Final Rule. However, that does not mean that noncompliant reporting prior to 2020 would not cause a CMP to issue against an RRE. Under the Proposed Rule, CMS would have 5 years from the date when the non-compliance was identified by CMS. So, for example, let’s say an RRE failed to report a TPOC that occurred in 2017. Assume that the Final Rule will be published this summer 2020, and CMS discovers in August 2020 that the RRE failed to report the 2017 TPOC. CMS would have until August 2025 to impose CMPs against the RRE.

Therefore, NGHP plans/RREs should steps now to avoid CMPs in the future:

  • Entities that have failed to register as an RRE should do so immediately and report reportable claims ASAP.
  • Take appropriate steps to identify Medicare status and document your good faith efforts.
  • Report TPOCS timely- no later than 1 year from TPOC effective date.
  • Correct all errors and make sure your ICD-10 codes are accurate.
  • Maintain accurate ORM reporting and terminate ORM timely.
  • Ensure that your responses to recovery efforts from CMS are consistent with your Section 111 reporting.
  • Primary plans/RREs should control the conditional payment reimbursement process to ensure accuracy and uniformity in ICD-10 codes as it pertains to a settlement or claim.
  • Lastly, contact us at to assess your current reporting program. Franco Signor has the industry’s best Social Security Number identification services to enhance ability to obtain an individual’s Medicare status, as well as unique audit tools which have evaluated more than 8 million claims for thousands of RREs.