CMS NGHP Civil Money Penalties Webinar and Slide Release

by B. Smith

Updated: 11/25/24

– CMS provided a link to updated slides (now including Q&A) from their September 12 webinar on the What’s New page of the Mandatory Insurer Reporting for NGHP section on CMS.gov.

On October 17, 2024, the Centers for Medicare & Medicaid Services (CMS) held their latest webinar to provide further clarification on Civil Money Penalties (CMPs). There were several highlights from this webinar and some important reminders from CMS which are detailed below. CMS also released the slides from the webinar on October 28 with some corrections.

As noted in the final rule, CMPs can be imposed if Ongoing Responsibility for Medical (ORM) or Total Payment Obligation to Claimant (TPOC) are reported untimely. Untimely, for CMS’ purposes, is failing to report a record within 365 days after reporting was required. The following chart outlines implementation dates and the auditing process for CMPs:

CMS will review 250 claims per quarter, which will include Group Health Plan (GHP) and Non-Group Health Plan (NGHP) claims based on the reporting volume of each group. Records received from Section 111 reporting including Direct Data Entry and non-Section 111 submissions will be sampled. Non-Section 111 submissions can include those claims that were self-reported by the claimant or claimant’s counsel.

With respect to penalty amounts, CMS again noted that they will be based on a tiered approach which are subject to inflation increases. The table below includes the original tiered amounts, and the increased amounts based on the current inflation rate:

Based on the data above, a Responsible Reporting Entity (RRE) who reports TPOC or ORM more than three years after the reporting obligation was established could be subject to a maximum of $538,010 in CMPs for a single claim. CMS provided several examples of penalty situations during the presentation, some of which contained date/mathematical errors. When the slides were released, most errors were corrected with the exception of slide 15. IMPAXX confirmed with CMS representatives that this slide was incorrect. The slide provides the following example:

A beneficiary settles their car accident case on 2/5/2026.

The RRE attempts to report the TPOC on their quarterly file submission on 12/1/2026, but the record is rejected for a hard edit.

The RRE fixes the error but does not report the record again until their 3/15/2027 file submission.

The RRE is non-compliant with Section 111 reporting because the record was not reported and accepted within 365 days of the reportable event.

• • • • The period of non-compliance is 2/6/2026 – 3/15/2027.
      • The potential CMP is calculated as: $250 X 402 (days of noncompliance) = $100,500 (as adjusted for inflation)

The actual date for calculating when penalties accrued should not be from the date of settlement on 2/5/2026, but rather the date the TPOC report became untimely on 2/5/2027.  Per the final rule CMS cannot penalize an RRE if TPOC or ORM is reported within the one-year timeframe.

CMS also reviewed the safe harbor provisions of the rule noting extensively that an RRE must make three “good faith” attempts to contact the claimant and the claimant’s counsel (if claimant is represented) to obtain information for reporting. CMS noted that this can include two attempts by mail or email to the beneficiary and the attorney and a third attempt by phone call, mail or email. Please note that if the claimant is represented, and you do not also attempt to contact counsel, you have not fulfilled this obligation. The key to satisfying the safe harbor provision is to have sufficient documentation to provide CMS of the attempts in the event of an audit.

CMS again made it clear that notice of penalties will be provided only to the Account Manager and Account Representative. CMS also stated that it is the RRE, and not the reporting agent, who is responsible for the payment of penalties in the event of noncompliance.

Final Thoughts

Now is the time make sure that your Section 111 Reporting program complies with CMS mandates. Below are few things you can do now to assist in these efforts:

• • Confirm your Account Manager and Account Representative information is up to date, that they are aware of the potential for CMPs, and that there is a process in place to ensure that Profile Reports and correspondence from CMS are getting to those responsible for reporting.
  • Review your CMS Quarterly Response Files for errors that would prevent files from being accepted by CMS.
  • If you are working with a reporting agent, make sure they are a true partner and not just  transferring data to and from CMS for you. They should be working with you to mitigate all areas of potential exposure. If you are unsure that your agent is doing this for you, please contact us for help in this area.
  • Consider an audit of your current program to identify issues and program gaps now so they can be fixed and help prevent untimely reporting and other cost exposure.

If you have any questions about what was shared during CMS’ October CMP webinar, or if you would like to learn more about how IMPAXX can help you enhance your Section 111 Reporting, please contact the IMPAXX Settlement Consulting team at [email protected].