'CMS’s CMPs final rule is “applicable” October 11, 2024

An important reminder for Section 111 non-group health plan Responsible Reporting Entities (NGHP RREs): CMS's Section 111 civil money penalties (CMPs) final rule goes live starting October 11, 2024. In general, as outlined below, NGHP RREs can be subject to CMPs for untimely TPOC and ORM reporting.^[1]

This article outlines the importance of this date, what it means, and provides links to helpful Verisk resources, as follows:

Key Date - October 11, 2024

As part of its January webinar, CMS explained that October 11, 2024 is the date the clock starts running in terms of CMS calculating the timeliness of Section 111 submissions for potential CMPs.^[2] In this regard, CMS has advised that only coverage record submissions with coverage effective dates [ORM dates] or TPOC dates of October 11, 2024 or later are in scope for penalties and, accordingly, the agency will not seek to assess penalties for submissions where the coverage effective dates or TPOC dates occurred prior to October 11, 2024.^[3]While Section 111 submissions with ORM coverage effective dates or TPOC dates of October 11, 2024 or later are in scope for potential CMPs, CMS has stated that the earliest it may impose CMPs is October 2025. As discussed in our recent article, CMS will impose CMPs using a three-tiered approach and the maximum daily CMPs rate was recently increased to $1,474 as part of an annual inflation adjustment.

General CMPs Refresher

Per 42 CFR § 402.1(22)(i), CMS may impose CMPs when the NGHP RRE "[f]ails to report any beneficiary record within 1 year from the date of the settlement, judgment, award, or other payment, or the effective date where on-going payment responsibility for medical care has been assumed by the entity" as more specifically defined in CMS's final rule. Id.

Regarding timely TPOC reporting, CMS has advised that in situations where a TPOC Date is reported by an NGHP RRE it will compare the RRE's file submission date with the TPOC Date and, in the event that the TPOC date is greater than 1 year prior to the file submission date, the TPOC report in question may be subject to the assessment of a penalty due to the RRE's failure to report in a timely fashion.^[4] In the event that a Funding Delayed Beyond TPOC Start Date is also reported, CMS states that it will utilize that date ("the funding of a settlement, judgment, award, or other payment, if delayed"), as opposed to the TPOC Date, to assess the timeliness of the report. If that the Funding Delayed Beyond TPOC Start Date is found to be more than 1 year prior to the RRE's file submission date, the TPOC report in question may be subject to the assessment of a penalty.^[5]

Regarding timely ORM reporting, CMS has stated that it will look to compare the date of the RRE's file submission with the date upon which the RRE assumed ORM.^[6] Interestingly, while CMS indicates it will measure CMPs from the date the RRE "assumes" ORM, at present, CMS only collects the Date of Incident via the Section 111 process. On its webinar, CMS stated that it will calculate timeliness of ORM reporting by comparing the Date of Incident with the date of the RRE's initial successful ORM submission, and if the Date of Incident is found to be more than one year prior to the date of the initial successful report, the RRE would be considered non-compliant and potentially subject to a penalty.^[7]CMS also noted that in situations where there is a delay in an RRE's initial report of ORM, the NGHP RRE should present mitigating evidence to CMS as part of the informal notice process in support of the reason(s) for the delayed report in the event that CMS is seeking to impose CMPs in this situation.^[8]

CMS will give NGHP RREs notice of potential CMPs, and NGHP RREs will have a right to appeal CMS penalties.^[9] In addition, as part of the final rule, CMS has established a "good faith" compliance safe harbor where CMS will not impose CMPs where an NGHP RRE is unable to obtain certain identifying information from the claimant to determine Medicare status and fulfill Section 111 reporting obligations. The full text of CMS's good faith compliance "safe harbor" can be viewed here.

Verisk Resources

Please see our Verisk's Section 111 CMPs resources for additional resources and information on Verisk's services, including our Section 111 reporting tool MSP Navigator.

Questions?

Please do not hesitate to contact the authors if you have any questions regarding the above or how Verisk can help you address Section 111 CMPs and how we can help you improve your Section 111 reporting practices.

[1] "TPOC" is the abbreviation for "total payment obligation to the claimant." Very generally, under CMS's TPOC reporting trigger, reporting is required upon claim resolution (or partial resolution) through a settlement, judgment, award, or other payment for cases in which the claimant is/was a Medicare beneficiary as of the TPOC date and where medicals were claimed and/or released, or the settlement, judgment, award, or other payment has the effect of releasing medicals. Under CMS's current thresholds, physical trauma based liability, no-fault and workers' compensation settlements greater than $750 are required to be reported under the Section 111 reporting process. The $750 threshold does not apply to settlements involving exposure, ingestion, or implantation cases. See generally, CMS's Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III and IV, Section 6.4.4.

"ORM" is the abbreviation for "on-going responsibility for medicals." Very generally, CMS states that "the trigger for reporting ORM is the determination to assume ORM by the RRE, which is when the RRE learns, through normal due diligence, that the beneficiary has received (or is receiving) medical treatment related to the injury or illness sustained. Required reporting of ORM by the RRE does not necessarily require the RRE to have made payment for Medicare-covered items or services when the RRE assumed ORM, nor does a provider or supplier necessarily have to have submitted a claim for such items or services to the RRE for the RRE to assume ORM. The effective date for ORM is the DOI, regardless of when the beneficiary receives the first medical treatment or when ORM is reported." See generally, CMS's Section 111 NGHP User Guide (Version 7.6, July 1, 2024), Chapter III Section 6.3.

[2] CMS's Section 111 CMPs webinar, January 18. 2024.

[3] Id.

[4] Fed. Reg. Vol. 88, No. 195, at 70372 (October 11, 2023).

[5] Fed. Reg. Vol. 88, No. 195, at 70370 and 70372 (October 11, 2023).

[6] Fed. Reg. Vol. 88, No. 195, at 70372 (October 11, 2023).

[7] CMS's NGHP Section 111 CMPs Webinar (January 18, 2024).

[8] CMS's NGHP Section 111 CMPs Webinar (January 18, 2024).

[9] In general, CMS will first provide RREs with an informal written pre-notice of a potential CMP. This letter will be e-mailed to the RRE's Authorized Representative with a "cc" copy sent to the RRE's Account Manager. CMS's NGHP Section 111 CMPs Webinar (January 18, 2024). Once a pre-notice is issued, RREs will then have 30 calendar days to present mitigating evidence. CMS encourages RREs to submit mitigation evidence for its consideration. See, Fed. Reg. Vol. 88, No. 195, at 70367 (October 11, 2023). From there, if CMS determines a CMP should be imposed, it will send the RRE a formal written notice, via certified mail, advising what triggered the proposed CMP, the amount of the proposed CMP, and that the RRE has the right to appeal. Fed. Reg. Vol. 88, No. 195, at 70367 (October 11, 2023) and CMS's NGHP Section 111 CMPs Webinar (January 18, 2024). As of the time this report was drafted, CMS had not advised to whom it will send the formal notice, although it would seem logical that this notice would also go to the RRE's Authorized Representatives, with a possible copy to the Account Manager, using the physical addresses maintained in the RRE's Section 111 profile report. We will need to see if CMS provides additional information on this item going forward. RREs will be able to appeal CMPs through the formal appeals process outlined under 42 CFR § 402.19 and 42 CFR part 1005. Fed. Reg. Vol. 88, No. 195, at 70367 (October 11, 2023). On this point, CMS notes that "[i]n broad terms, parties subject to CMPs will receive formal written notice at the time penalty is proposed. The recipient will have the right to request a hearing with an Administrative Law Judge (ALJ) within 60 calendar days of receipt. Any party may appeal the initial decision of the ALJ to the Departmental Appeals Board (DAB) within 30 calendar days. The DAB's decision becomes binding 60 calendar days following service of the DAB's decision, absent petition for judicial review." Id.

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