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NAMSAP Featured Article: Anticipating Section 111 Reporting Civil Monetary Penalties

Monday, June 1, 2020   (0 Comments)
Posted by: Schuyler Green
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Anticipating Section 111 Reporting Civil Monetary Penalties

On April 20, 2020, CMS closed its period for public comment on the notice of proposed rulemaking with regard to the civil monetary penalties that may be applied for noncompliance with the Section 111 Mandatory Insurer Reporting guidelines. With the public comment period closed we are now forced to sit and wait for CMS’ final determination regarding this proposal and whether it will institute final regulations regarding the imposition of civil monetary penalties for erroneous Section 111 reporting.

Proposed CMP Highlights

While NAMSAP previously released a complete summary of CMS’ proposed rules, for the purposes of this article, it is important to remember that CMS outlined three general categories of noncompliance that could leave an RRE subject to civil monetary penalties. The three categories are as follows:

  1. Failure to report a claim that otherwise meets all criteria for required reporting as outlined by CMS within the given timeframe.
  2. Submitting claim records with contradictory information from that which has been identified by CMS or its contractors in its recovery efforts.
  3. Submitting claim records containing substantial errors that exceed CMS’ outlined error tolerance threshold.

Public Comment and Proposed CMP Shortcomings

In response to CMS’ release, NAMSAP submitted a formal comment highlighting several areas of concern throughout the proposed rules. In addition to the comment, NAMSAP also requested an extension on the comment period given the effect of the COVID-19 pandemic has had on the industry; however, the extension was not granted and as mentioned above, CMS closed the public comment period on April 20, 2020.

While commenters will of course be requesting additions, deletions, and clarification on varying areas of the proposed rules; presumably, most commenters will be requesting additional information regarding which actions constitute noncompliance and to what extent civil monetary penalties will be applied for any such action. A few areas will likely be commonplace among commenters:

First, CMS fails to outline the discretionary nature of the imposition and the specific dollar amount of CMPs for the failure to report a claim. That is, to what extent will an RRE be penalized for varying degrees of failing to report a claim? For example, what discretion will be given in subjecting an RRE to penalty when all signs indicate that the RRE has made a good faith effort to report all claims meeting Section 111 thresholds in a timely fashion, but fails to report one claim within one year? What if the RRE fails to report 100 claims for one year? One thousand claims per year for four years? There are a multitude of additional issues that can stem from this point – e.g. what percentage of an RRE’s total claims are not reported, what safeguards are in place to prevent failure to report, and what actual harm was caused to CMS by the failure to report (i.e. if no recovery effort is needed for conditional payments made, will there be a penalty)? There is no doubt that affected parties need more information about the potential for penalties under this category of noncompliance.

Similarly, CMS fails to provide much clarification as to what constitutes reporting “contradictory information” and what penalty will be assessed for doing so. As with failing to report a claim above, it is unclear to what extent an RRE may be penalized and for what degree of contradictory information. In order to fairly and accurately penalize RREs for providing contradictory information which impedes CMS’ recovery efforts, CMS will need to further outline the criteria for what is deemed to be “contradictory information”

Finally, it is reasonable to request additional information from CMS regarding the prospective nature of the CMPs. As a quick example, will a penalty be applied in a case in which a TPOC that should have been reported prior to implementation of the final rules but wasn’t, or only those TPOCs that occur after that the date of implantation that go unreported?

While We Wait

What can RREs do while we await CMS’ decision on submitted comments? There are a few steps that companies can take in order to ensure that they are prepared for CMS’ final regulations. The first thing you can do is to use this time to revamp your internal reporting processes. Establish internal Medicare Secondary Payer policies and procedures that are up to date and understood by all parties involved. Verify that your current Section 111 reporting is being done properly and not missing claims or returning disposition errors. Seek out training or additional assistance from your Medicare counsel in areas that are lacking.

In addition to reviewing your current Section 111 procedures, now is as good of a time as ever to perform an audit on past claims. Performing an audit on past claim data can permit you to accomplish a multitude of things. First, you can ensure that any claims that should have been reported,were in fact reported and moreover, reported correctly. Along similar lines, an audit can help you clean up any claims that previously received an error code from CMS in past reporting and ensure that any such claims are properly re-reported error free. Further, you can catch any claims involving ORM that should have been terminated due to settlement, release from care, or the jurisdiction’s relevant statutory provisions. Terminating ORM where appropriate will not only verify that you are compliant with the Section 111 rules in that you are reporting accurate claim data and ensuring that your Section 111 data does not contradict any information received by CMS during a recovery effort (e.g. lien appeal), but also ends your status as primary payer when you are no longer responsible for treatment. An audit can ensure that past claims include the appropriate diagnostic codes. A review of past claims can reveal whether claims were reported with incorrect, additional, or non-specific ICD-9 or ICD-10 codes such that you are now responsible for unrelated treatment and allow you to correct the deficient ICD codes.

With national COVID-19 restrictions beginning to lift around the country, we can only speculate as to when CMS will respond to the public comments received and when CMS will issue final regulations governing the imposition of civil monetary penalties. While we wait, we know one thing is clear- CMS needs to provide additional clarification to the proposed rules prior to subjecting any companies to civil monetary penalties. Although it is unclear exactly when final rules will be published, all signs point to the fact that CMS is growing closer to implementing civil monetary penalties for Section 111 Mandatory Insurer Reporting noncompliance and as such, it is a better time than ever to ensure that your Section 111 reporting data is up to par.


Logan Pry, Esquire

Associate Attorney, Medicare Compliance

Gordon Rees Scully Mansukhani

707 Grant Street, Suite 3800

Pittsburgh, PA 15219



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