Breaking News: Section 111 Reporting Civil Monetary Penalties
NOVEMBER 14, 2023
The final rule related to Section 111 Mandatory Insurer Reporting civil monetary penalties has finally been released by the Centers for Medicare and Medicaid Services (CMS). This rule has been years in the making, but several questions remain. Now is the time to review your claim team’s processes to ensure success in the new regulatory environment and avoid penalties.
Section 111 Reporting
The Medicare and Medicaid SCHIP Extension (MMSEA) Act of 2007 created various reporting criteria for Non-Group Health Plans (NGHP), including workers’ compensation carriers.[1] The law failed to detail penalties for insurance carriers who failed to report, which led to regulations needing to solidify the process. Under the current statutory framework, workers’ compensation and self-insured plans such as this law can be fined “up to” $1,000 per day/claim. Now is the time to understand what the new rules require.
What the New Rule Requires
The new rule is effective December 11, 2023, but will not be enforced until October 11, 2024. Under the final rule published in the Federal Register:
Required Reporting Entities (RRE)[2] are subject to civil monetary penalties if they “Fail(s) to report any beneficiary record within 1 year from the date of the settlement, judgment, award, or other payment[3], or the effective date where ongoing payment responsibility for medical care[4] has been assumed by the entity.”
The Rule outlines specific “safe harbor” actions RREs can take to avoid penalties or steps they must take if there is non-cooperation by the claimant that hinders their ability to report in a timely or accurate manner.
CMS will assess civil monetary penalties under a tiered approach, starting at $250 for each calendar day of noncompliance and not exceeding $1,000 for each calendar day. The maximum penalty to be assessed is $365,000 per claim.
All penalties are subject to annual adjustment under 45 C.F.R. part 102.
Conclusions
Publication of the final rule related to civil monetary penalties provided much-needed direction for an industry eager to comply. Now is the time to review your workers’ compensation program to ensure all claim team members know their work impacts Section 111 reporting. It is also an excellent opportunity to review your overall claim functions and determine if you are ready for CMS to monitor Section 111 reporting activities aggressively.