CMS Issues Final Rule on Calculating Penalties for Failure to Comply with Medicare Secondary Payer Reporting Requirements

Published November 27, 2023

The Centers for Medicare & Medicaid Services (CMS) issued a final rule correction to the document "Medicare
Program; Medicare Secondary Payer and Certain Civil Money Penalties" issued on October 11, 2023.

This corrected document is effective December 11, 2023.

(updated November 27, 2023)


The Centers for Medicare & Medicaid Services (CMS) issued a final rule on methods to calculate and impose civil money penalties (CMPs) when a group health plan (GHP) or a non-group health plan (NGHP) entity fails to comply with Medicare Secondary Payer (MSP) reporting requirements. The final rule also establishes CMP amounts and circumstances under which CMPs will and will not be imposed.
 
The penalties:
  • Come into play when responsible reporting entities (RREs) fail to register and report as required by Medicare Secondary Payer reporting requirements;
  • Apply when “RREs report as required, but report in a manner that exceeds error tolerances established by the HHS Secretary) and when “RREs contradict the information the RREs have reported when CMS attempts to recover its payments from these RREs."
The final rule:
  • Incorporates some of the provisions of the proposed rule and also revises some of the provisions as proposed; and
  • Clarifies how the identification of noncompliance will occur, which was not discussed in the proposed rule. 

The provisions of the final rule that differ from the proposed rule relate to:

  • Removal of any Basis Other than Timeliness as a Reason for Imposing a CMP;
  • Audit Methodology for Analyzing Records;
  • Tiered Approach for NGHP RREs; and
  • Clarification of Good Faith Efforts to Obtain Identifying Information.
CMS is adopting an audit approach in the final rule whereby a randomized sample of new beneficiary records received each quarter will be audited, rather than undertaking an automated review of all records submitted.

The final rule is effective December 11, 2023.

The provisions of the rule are applicable on or after October 11, 2024.

 

Additional Resource

Frequently Asked Questions (FAQs)


(posted October 11, 2023)