Recap of CMS Section 111 Penalties Webinar

January 23, 2024

Penalty sign depicting Recap of Section 111 webinar

On January 18, 2024, the Centers for Medicare and Medicaid Services (CMS) held a Section 111 Civil Monetary Penalties webinar to provide important information on timelines, non-compliance definitions and safe harbors associated with the rule.

A copy of a screenshot of the webinar slides can be found here.

Some key points made during the webinar:

      • October 11, 2024, is the Final Rule applicability date that starts the 365-day clock. From October 11, 2024 on, CMS expects records to be submitted in a timely manner.
      • On April 1, 2026, CMS will begin quarterly compliance audits by reviewing a random sample of new RRE records added since January 1, 2026.
      • To determine compliance, CMS will compare the date a TPOC record is accepted against the date CMS should have received the record. CMS provided several examples of compliance vs. non-compliance in the slides.
      • CMS will randomly select 250 new and accepted records per quarter to audit. These will be divided between group health and non-group health records.
      • Both Section 111 and self-reported submissions will be included in the audit. CMS emphasized that it will review other reporting methods to determine if there has been a failure to report, not just late reporting through Section 111.
      • TPOC and ORM are considered separate reporting obligations for purposes of audits and penalties.
      • A record must be reported and accepted to meet the rule’s timeliness requirement. For example, if a report is made without a diagnosis code, it will not be considered accepted.
      • The rule is prospective only – it does not consider retroactive reporting. This is an important point.  TPOC and ORM dates prior to October 11, 2024, which are reported more than 365 days after when they should have been reported, will not be subject to penalties.
      • The rule in no way changes reporting requirements.
      • The Informal Notice of a potential penalty will be emailed to the RRE’s Authorized Representative and the Account Manager.
      • Within 30 days of receipt of the Informal Notice, the RRE must respond with mitigating factors to CMS imposing a penalty.
      • A Formal Notice to Impose a CMP will be sent to the Authorized Representative by certified mail. The RRE will then have access to the appeals process.
      • As previously explained, there is a tiered approach to penalties. That is, penalties increase when the report is more than one year, two years, and then three years late. These are inflation-adjusted with the 2024 rates:

$1,000 (after three years late) = $1,428 /per day

$500 (after two years late) = $714/per day

$250 (after one year late) = $357/per day

      • CMS will update the NGHP User Guide in the near future to incorporate the CMP rule.

Tower will update you as CMS implements the penalty rule over the next two years.

Prior Tower articles: CMS Section 111 Penalties Rule Focuses on Untimely Reporting and CMS Releases FAQs on Section 111 Penalties


Nov. 13 CMS Webinar to Discuss Adding WCMSA Info to Section 111 Reporting of TPOC

October 23, 2023

Picture of Keyboard with a red button for Section 111 reporting

Based on a recent webinar invitation, the Centers for Medicare and Medicaid Services (CMS) plans to expand Section 111 reporting to include data from Workers’ Compensation Medicare Set-Asides (WCMSAs). Per CMS:

CMS will be hosting a webinar regarding the expansion of Section 111 Non-Group Health Plan (NGHP) Total Payment Obligation to Claimant (TPOC) reporting to include Workers’ Compensation Medicare Set-Aside (WCMSA) information. The format will be opening remarks and a presentation by CMS that will include background and timelines, followed by a question and answer session. Because this expansion impacts reporting of WCMSAs, it is strongly recommended that Responsible Reporting Entities (RREs) who report Workers’ Compensation settlements attend.

The webinar will be held on November 13, 2023, at 1:00 p.m. ET.  The notice can be found here.

We encourage anyone managing Section 111 reporting for a WC RRE to tune in.  Please note that there is no pre-registration. The link and call-in phone numbers are on the notice, and you log in shortly before the webinar’s start time.

Tower will provide a post-webinar summary with key takeaways and recommendations.

CMS Section 111 Penalties Rule Focuses on Untimely Reporting

October 12, 2023

picture of stamps reading rules, regulations, Section 111 Penalities

On October 11, 2023, CMS published a final rule on the imposition of Civil Monetary Penalties for failure to comply with the Section 111 Mandatory Insurer Reporting requirements.  The rule’s focus and the sole reason for penalties will be untimely reporting.  Even if a Responsible Reporting Entity (RRE) reports untimely, it may only be subject to penalties if that claim is identified through a randomized quarterly audit process.

Please see a full Q&A below.  We will be sending an invitation for a special webinar on Section 111 penalties shortly!

Note, while the final rule encompasses both Group Health Plans (GHPs) and Non-Group Health Plans (NGHPs), this article is specific to NGHPs.

Under what circumstances can CMS impose penalties?

Per CMS:

. . . we have determined that we will only impose penalties where the initial report was not received in a timely manner. Penalties will not be imposed on any other basis, such as in relation to the quality of reporting. Timeliness is determined by comparing the date a record is submitted and accepted against the date CMS should have received the record. The date CMS should receive a record is determined by the effective date of coverage or the date of settlement (or settlement funding date if the funding of the settlement is delayed) plus 1 year (365 days).

CMS considers the “initial report” to be the reporting on Ongoing Responsibility for Medicals (ORM) or, if ORM was not previously reported, the reporting of Total Payment Obligation to the Claimant (TPOC), namely the settlement, judgment, award, or other payment.  Importantly, CMS expressly indicated in these comments that a failure to report ORM termination will not subject the RRE to penalties:

In the final rule, based on stakeholder concerns and submitted comments, CMS has chosen to focus its definition of noncompliance solely on those situations where an entity has failed to provide its initial report of primary payment responsibility in a timely manner. That means that untimely termination of ORM coverage records would not be considered eligible for a civil money penalty under this rule.

On the surface, even this more narrowly tailored rule could subject many claims to penalties. However, CMS is implementing a randomized audit process that will only review a small portion of the thousands of reported claims it receives. Per CMS:

CMS has determined that, given the time and resources necessary to accurately and thoroughly evaluate the accuracy of any submitted record, it would be possible to audit a total of 1,000 records per calendar year across all RRE submissions, divided evenly among each calendar quarter (250 individual beneficiary records per quarter).

    •  CMS will evaluate a proportionate number of GHP and NGHP records based on the pro-rata count of recently added records for both types of coverage over the calendar quarter under evaluation. For example, if over the calendar quarter being evaluated, CMS received 600,000 GHP records and 400,000 NGHP records for a total of 1,000,000 recently added beneficiary records, then 60 percent of the 250 records audited for that quarter would be GHP records, and 40 percent would be NGHP records.
    •  At the end of each calendar quarter, CMS will randomly select the indicated number of records and analyze each selected record to determine if it is in compliance with the reporting requirements as required by statute and defined herein.

Accordingly, to be chosen for a penalty a claim would need to both be reported untimely and identified through this randomized audit.  As CMS indicated in its comments, it expects this type of audit to pick up larger reporting entities.

How will the RRE be notified of the penalty?

Once a claim has been identified for a penalty there is an informal notice process, per CMS:

We intend to communicate with the entity informally before issuing formal notice regarding a CMP. The informal (that is, prior to formal enforcement actions) written “pre-notice” process will allow the RRE the opportunity to present mitigating evidence for CMS review prior to the imposition of a CMP. The RRE will have 30 calendar days to respond with mitigating information before the issuance of a formal written notice in accordance with 42 CFR 402.7.

Common to all such instances where informal notice will be given is the intention to give the RRE an opportunity to clarify, mitigate, or explain any errors that were the result of a technical issue or due to an error or system issue caused by CMS or its contractors. It would be impractical and counter to the spirit of the informal notice process to regulate or enumerate all circumstances in which mitigating information could be provided or what that information should convey. As such, any mitigating factors or circumstances are welcomed, and a dialogue is encouraged in an attempt to find solutions that are short of imposing a CMP. We believe it is in the best interests of all RREs to leave the informal notice process open to any reasonable submission of mitigating factors so that we are free to entertain all such documentation without strict limits on what is, or is not, acceptable.

In many circumstances, the RRE may have a reasonable explanation for the untimely reporting. Because of the 30-day timeline, RREs must be prepared to react quickly to these informal notices by investigating and responding within the required timeframe.

If the RRE fails to respond to the informal notice or CMS does not accept the explanation for why the report was untimely, then CMS will issue a formal notice.

Is there an appeals process?

Yes, per CMS:

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.

If a penalty is imposed, how will the dollar amount be calculated?  Is there a maximum penalty?

CMS has developed a tiered approach to penalties, which provides:

Because we have the statutory authority to adjust the amounts of penalties imposed on NGHP RREs, a tiered approach and cap on the total amount of penalties applicable to such RREs are being finalized in this rule. As explained previously, the statute does not permit us to extend this approach to GHP RREs. For any record selected via the random audit process described above where the NGHP RRE submitted the information more than 1 year after the date of settlement, judgment, award, or other payment (including the effective date of the assumption of ongoing payment responsibility for medical care); the daily penalty will be—

    • $250, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 1 year or more, but less than 2 years after, the required reporting date;  
    • $500, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 2 years or more, but less than 3 years after, the required reporting date; or  
    • $1,000, as adjusted annually under 45 CFR part 102, for each calendar day of noncompliance, where the record was reported 3 years or more after the required reporting date.

Additionally, the total penalty for any one instance of noncompliance by an NGHP RRE for a given record identified by CMS will be no greater than $365,000 (as adjusted annually under 45 CFR part 102).

Are there any safe harbors from penalties?

 Per CMS:

First, any untimely reporting that is the result of a technical or system issue outside of the control of the RRE, or that is the result of an error caused by CMS or one of its contractors would not be considered noncompliance for purposes of this rule.

Second, any untimely reporting by an NGHP that is the result of a failure to acquire all necessary reporting information due to a lack of cooperation by the beneficiary will not lead to a CMP provided that certain standards are met.

CMS defines a safe harbor based on good faith efforts to obtain claimant information for reporting as follows:

 If an NGHP entity fails to report timely because the NGHP entity was unable to obtain information necessary for reporting from the reportable individual, including an individual’s last name, first name, date of birth, gender, MBI, or SSN (or the last 5 digits of the SSN), and the responsible applicable plan has made and maintained records of its good faith effort to obtain this information by taking all of the following steps:

    •  The NGHP has communicated the need for this information to the individual and his or her attorney or other representative (if applicable) and requested the information from the individual and his or her attorney or other representative at least twice by mail and at least once by phone or other means of contact such as electronic mail in the absence of a response to the mailings.
    •  The NGHP certifies that it has not received a response, or has received a response in writing that the individual will not provide his or her MBI or SSN (or last 5 digits of his or her SSN).
    •  The NGHP has documented its efforts to obtain the missing information, such as the MBI or SSN (or the last 5 digits of the SSN) and the reason for the failure to collect this information.

The NGHP entity should maintain records of these good faith efforts (such as dates and types of communications with the individual) in order to be produced as mitigating evidence should CMS contemplate the imposition of a CMP. Such records must be maintained for a period of 5 years. The current OMB control number assigned to this information collection effort, as required under the Paperwork Reduction Act, is 0938-1074.

Is there a statute of limitations on penalties?

Yes, per CMS:

We agree and will apply the 5-year statute of limitations as required by 28 U.S.C. 2462. Under 28 U.S.C. 2462, we may only impose a CMP within 5 years from the date when the noncompliance occurred.

The five-year limitation begins to run as of the date the untimely report is made to CMS.

When does the rule become effective?

The rule becomes effective as of December 11, 2023.

Will the rule be retroactive?

No, per CMS:

CMPs will only be imposed on instances of noncompliance based on those settlement dates, coverage effective dates, or other operative dates that occur after the effective date of this regulation and as such, there will be no instances of inadvertent or de facto retroactivity of CMPs.

Since the rule effective date is December 11, 2023, CMS can consider penalties on untimely reported claims on or after this date.  This means that if the untimely ORM and TPOC date was December 11, 2023, or later, it may be subject to penalties.  Untimely, pre-December 11, 2023, ORM and TPOC dates will not be subject to penalties.

Additionally, CMS has indicated that penalties will not be issued until one year after the final rule’s publication, namely October 11, 2024.

How does the final rule differ from the proposed rule?

The proposed rule contained two other issues that could result in penalties.  These were RREs reporting ORM and later reporting contradictory diagnosis codes and exceeding error tolerance thresholds.  The final rule consists solely of penalties for untimely reporting.

This means that reporting errors, such as incorrect diagnosis code reporting, will not result in Section 111 reporting penalties (although it can still result in inappropriate Medicare conditional payment demands).  Further, when the RRE corrects this data, it will not be penalized for doing so.

What steps must an RRE take to avoid penalties?

Simply put, reporting of ORM and/or TPOC must be timely.  When the criteria are met for a claim to be reported, it should be reported during the next quarterly reporting period.

Suppose the RRE has difficulty obtaining identifying information to determine whether a claimant is a Medicare beneficiary. In that case, those efforts should be in accordance with the good faith effort rules described in the safe harbor section.

Tower’s Section 111 reporting platform and management dashboard provides our reporting partners the tools necessary to identify Medicare-eligible claimants.  Once eligibility is confirmed it is critical to use this information to report acceptance of ORM and/or TPOC. Tower stands ready to assist you with your questions and to provide necessary reports and overall guidance to ensure compliance.

Contact us if you are concerned that your current reporting platform may not protect you from penalties.  An audit of your current Section 111 reporting data often reveals gaps in reporting which may lead to penalties.

Tower’s Chief Compliance Officer, Dan Anders, can be reached at

Section 111 Reporting Penalties Rule Released

October 10, 2023

bullhorn illustration alerting you to avoid reporting penalties

The long-awaited Section 111 Mandatory Insurer Reporting Civil Monetary Penalties (CMPs) rule has been released.  Recall that the purpose of the rule is to set out specific criteria for when CMS may impose penalties for what it considers a failure to report or improper reporting.  The rule is unpublished but will be considered published tomorrow, October 11.

In conjunction with its release, the Centers for Medicare and Medicaid Services issued the following Alert:
Effective Dates

Please note that this rule is effective as of 60 days following the date of publication (December 11, 2023), but is only applicable one year after publication (October 10, 2024). RREs are expected to be compliant with their Section 111 Mandatory Insurer Reporting requirements no later than October 10, 2024, or they may be eligible for a CMP.

Additional Information

RREs should review the published rule and take time to evaluate their reporting processes to ensure the RRE is compliant with all reporting requirements before the rule goes into effect. If RREs have any questions or concerns about their reporting, they should contact their EDI representative.

We know that CMPs are of great interest to RREs, and CMS is in the process of developing and publishing additional written guidance related to CMPs. Questions should be directed to the new CMS Section 111 Civil Money Penalties mailbox at Please be aware that responses should not be anticipated at this time; CMS will use these questions and comments to help inform outreach and educational materials (including webinar presentations). RREs should continue to monitor the Mandatory Insurer Reporting pages on where additional guidance and updates, including information about CMP-related webinars, will be posted.

Key Takeaway
The initial key takeaway from this announcement is the rule will be enforced against RREs starting on October 10, 2024, one year from today. Further, as noted by CMS, there will be additional guidance before that date.

We are in the process of reviewing the regulation and will provide a complete analysis shortly.  This will be followed by an invitation to a special Tower webinar to explain the rule and its implications for RREs and answer your questions.

If you have any immediate questions, please reach out to Tower’s Chief Compliance Officer, Dan Anders at

Fixed Percentage Option Now Available for Liability Settlements up to $10,000

September 29, 2023

Picture of someone with a magnifying glass looking thru a book of papers for a Fixed Percentage Option to resolve Medicare conditional payments liability settlements of up to $10,000.

The Centers for Medicare and Medicaid Services recently announced that the maximum settlement amount for use of the Fixed Percentage Option will increase from $5,000 to $10,000, effective 10/2/2023. The Fixed Percentage Option is available to the claimant in a liability settlement and allows them to agree to pay 25% of the total settlement amount to resolve Medicare’s recovery claim for conditional payments.  The criteria for selecting this option are:

  • Your liability insurance (including self-insurance) settlement, judgment, award or other payment is related to an alleged physical trauma-based incident and;
  • The total settlement is for $5,000 (Note this amount will be raised to $10,000, effective October 2, 2023) or less.
  • You elect the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident.
  • You have not received and do not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

This option benefits the injured person when Medicare conditional payments exceed 25% of the total settlement amount.  For example, if Medicare has made conditional payments of $8,000 on a $10,000 total settlement, the claimant would pay only $2,500 to resolve them with the Fixed Percentage Option. On the other hand, if conditional payments are $800 on a $10,000 settlement, it is better to use the traditional repayment method with a proportional reduction for attorney’s fees and costs, if any.

Accordingly, it is essential for claimants and their attorneys to investigate Medicare conditional payments prior to settlement so that they can choose the best method for resolving Medicare’s interests.

More information on the Fixed Percentage Option can be found on the CMS website here.

Please contact Tower’s Chief Compliance Officer, Dan Anders, at with any questions.

Easy MSA Cost Savings Through Structured Settlements

June 21, 2023

Tower’s structured settlement partner, Arcadia Settlements Group, gave an in-depth overview of how Medicare Set-Asides, structured settlements, and professional administration facilitate workers’ comp settlements during our recent Premiere Webinar. Our Chief Compliance Officer, Dan Anders, moderated the informative session that featured Alisa Hofmann, Arcadia’s VP of Workers’ Comp and Medicare Practices, and Lori Vaughn, who oversees its structured settlement programs.

As you may know, workers’ comp settlements can be paid out in a lump sum or through structured settlements.  Here are some not-so-fun facts about lump sums:

  • 25-30% of injured people exhaust lump sum settlement funds within 2-3 months.
  • 85-90% of injured people dissipate lump sum settlement funds within 2-5 years.

When injured workers exhaust these funds, if they are Medicare beneficiaries, they turn to Medicare to cover injury-related medical bills. And the whole point of the Medicare Secondary Payer Act is to prevent this.

Structured settlements protect the MSA funds by paying them over time as an annuity. The injured worker receives two years of the MSA allocation at settlement plus the cost of a first procedure or replacement if there are any. The rest of the MSA comes in annual payments, so the injured worker receives a consistent stream of funds for injury-related care over their lifetime.

For payers, this arrangement offers significant savings and a path to faster claim resolution, especially when paired with professional administration. And, like an MSA, the structured settlement shows Medicare that its interests are protected.

A Couple of Takeaways:

  • Structured settlements aren’t only for MSAs. They can be used for indemnity and funds for healthcare services and equipment not covered by Medicare. Even attorneys can be paid through these.
  • CMS-approved lump sum MSAs can be converted to a structured MSA but require submission to CMS of an attestation from the injured worker agreeing to the change.
  • It is easier to submit the MSA to CMS in the structured settlement format as if it is later decided to go with a lump sum there is no need to submit an injured worker letter to CMS agreeing to the change. In short, submitting in this format saves time, money and frustration.

Hofmann and Vaughn also discussed self-administration versus professional administration of the MSA. They urged payers to educate injured workers on the risks, rules, and responsibilities of MSA administration.

CMS prefers professional administration. Plus, some companies like our partner Ametros provide medical and pharmaceutical savings in addition to managing the fund and reporting.

With examples that show how structured settlements are calculated, the webinar is great for new claims representatives and those who want a refresh on settlement tools.  If you’d like to receive more information on structuring an MSA or a link to the recording, please email your request to Dan Anders at


CMS Changes Rules for ORM and NOINJ Reporting in the Latest Update of its Section 111 Reporting User Guide

June 9, 2023

CMS User Guides for Section 111 Reporting. open book with colored page markers

The Centers for Medicare and Medicaid Services (CMS) recently released Version 7.2 of its MMSEA Section 111 User Guide. The guide contains some notable updates for Ongoing Responsibility for Medicals (ORM) reporting, determination of the ORM termination date with a physician letter, and use of the NOINJ code in certain liability settlements.

Revised Trigger for ORM Reporting

CMS revised Section 6.3 (Policy Guidance) on the trigger for reporting Ongoing Responsibility for Medicals (ORM):

The trigger for reporting ORM is the assumption of ORM by the RRE, which is when the RRE has made a determination to assume responsibility for ORM and when the beneficiary receives medical treatment related to the injury or illness. Medical payments do not actually have to be paid, nor does a claim need to be submitted, for ORM reporting to be required. The effective date for ORM is the DOI, regardless of when the beneficiary receives the first medical treatment or when ORM is reported.

We surmise that CMS added the additional requirement (bolded) for reporting ORM so that allow no-fault plans do not have to report ORM on minor claims that have no evidence of medical treatment.  Workers’ compensation plans already have an exclusion for reporting ORM on minor medical-only WC claims where medical payments do not exceed $750, along with other requirements (See Section 6.3.1 of the guide).

The change raises an interesting question: What obligation does the no-fault plan have to determine if treatment has occurred?  In other words, does the no-fault plan have to actively inquire about treatment? Or can it be passive and wait to report ORM after treatment is occurring? There isn’t an answer from CMS’s ORM definition.

Determining ORM Termination Date Based on Physician Statement

CMS previously added a provision to Section 6.3.2 (Policy Guidance) which allows ORM termination based on a physician statement finding that no additional medical items and/or services associated with the claimed injuries will be required.  Apparently, a question arose about what ORM termination date to enter if such a physician letter is obtained.  Per CMS:

Where an RRE is relying upon a physician’s statement to terminate ORM, the ORM termination

date to be submitted should be determined as follows:

  • Where the physician’s statement specifies a date as to when no further treatment was

required, that date should be the reported ORM termination date;

  •  Where the physician’s statement does not specify a date when no further treatment was

required, the date of the statement should be the reported ORM termination date;

  •  Where the physician’s statement does not specify a date when no further treatment was

required, nor is the statement dated, the last date of the related treatment should be used as the ORM termination date.

The above should clarify the appropriate ORM termination date to use when a physician statement is obtained.

Reporting of NOINJ is Now Optional

Since the early days of Section 111 reporting CMS has required liability claims where medicals are released in settlement but where the type of claim typically has no associated or alleged medical care to be reported.  Because there were no diagnosis codes to report, these claims were reported with a “NOINJ” code.  Examples of such claims were loss of consortium, an errors or omissions liability insurance claim, a directors and officers liability insurance claim, or a claim resulting from a wrongful action related to employment status action.

CMS has now revised its policy in Section of the User Guide (Technical Information) on the reporting of such claims to state:

Note: In cases where the reporting of a liability record only meets the criteria for reporting a ‘NOINJ’ diagnosis code in Field 18, the reporting of the record is no longer required. However, it is optional for the RRE to report the record with the ‘NOINJ’ diagnosis code following the previously existing rules in the User Guide as follows:

This update is great news for carriers who have had to report these types of claims for more than a decade now.

If you have any questions on these updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at (888) 331.4941 or

CMS Significantly Expands Amended Review MSA Availability

May 17, 2023

Picture of someone reviewing documents of an MSA Amended reviews.

The Centers for Medicare and Medicaid Services (CMS) announced the expansion of its Amended Review policy to significantly more MSAs in the latest update to its WCMSA Reference Guide, Version 3.9. The Amended Review process was previously limited to MSAs approved within the last 12 to 60 months.

The 60-month limitation is now gone, opening the door to a second bite at the apple for any MSA approved over 12 months prior.

Does Your MSA Qualify?

CMS provides the following criteria for an Amended Review:

Where the following criteria are met, CMS will permit a one-time request for re-review in the form of a submission of a new cover letter, all medical documentation related to the settling injury(s)/body part(s) since the previous submission date, the most recent six months of pharmacy records, a consent to release information, and a summary of expected future care.

  • CMS has issued a conditional approval/approved amount at least 12 months prior.
  • The case has not yet been settled as of the date of the request for re-review.
  • Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

A claim that meets these criteria qualifies for an Amended Review.

Other Notable Updates

The CMS Regional Offices no longer approve the MSA before its release to the submitter.  For a brief history, when CMS introduced the MSA review process in 2001 the regional offices reviewed the MSA submissions.  CMS replaced their review responsibility in 2005 by introducing a centralized review contractor, the Workers Compensation Review Contractor (WCRC).  Since then, the regional offices approved the MSA recommendation made by the WCRC.

While no longer putting their stamp of approval on the MSA, the regional offices are still responsible for the receipt and review of final settlement documents to confirm the proper funding of the MSA.

Also, as part of the update, CMS clarified pricing methodology around intrathecal pumps, spinal cord stimulators, and peripheral nerve stimulator replacement frequency.

Practical Implications

The big news is the availability of Amended Review MSAs for any prior approval which otherwise meets the above-defined criteria.  We recommend that payers review their files to identify open medical claims which may now be eligible for an Amended Review. Tower stands ready to assist you with such a review and identify claims that can now be settled.  Please contact us for further consultation.

CMS: Lead Insurer is RRE for Subscription Insurance Policy Section 111 Reporting

April 26, 2023

CMS User Guides for Section 111 Reporting. open book with colored page markers

In an update to its Section 111 MSP Mandatory Reporting User Guide (Version 7.1 Chapter III Policy Guidance) CMS made clear that in a subscription insurance policy arrangement, the lead insurer is solely responsible for Section 111 mandatory reporting requirements.

The new section of the guide, Section 6.1.13 states:

In a subscription insurance policy arrangement, two or more insurers enter into an agreement whereby the risk of the insurance policy is spread among the various insurance entities in some agreed-upon ratio. In such arrangements, a lead insurer is designated for various administrative and business purposes. While there may be many co-insurers on a subscription insurance policy, there is only one lead insurer, and that lead insurer remains so throughout the policy life cycle.

 Due to the nature of the subscription insurance market and the way such policies are structured, it is appropriate for the lead insurer to act as the sole RRE as it relates to Section 111 mandatory reporting requirements. The ability for the lead insurer to act as the sole RRE is predicated on the assumption that the lead insurer will avail themselves of all rights, requirements, and responsibilities codified in statute and further set out in regulation and within this and any other sub-regulatory guidance provided by CMS, as is from time to time amended. In any such lead reporting situation, as it relates to subscription insurance policies, CMS will assume that the lead insurer, as the sole RRE, will be responsible for all applicable reporting, recovery, and benefits coordination requirements that presently exist, regardless of the existence of any other co-insurer that may enter into a subscription arrangement or similar contract with the lead insurer.

Practical Implications

With subscription insurance policies, risk is divided among two or more policies. It can be an equal split, or one company assumes more risk than another as long as the combined coverage equals 100% of the required limits.  In these arrangements, one insurer takes the lead as administrator.

Based on this policy announcement, only the lead insurer is required to complete Section 111 reporting as the sole RRE.  Other insurers are released from reporting responsibilities.

Please get in touch with Dan Anders, Chief Compliance Officer, at or 888.331.4941 with any questions.

CMS Extends Deadline for Publication of Final Section 111 Penalties Rule

February 20, 2023

picture of stamps reading rules, regulations, Section 111 Penalities

There was much expectation that the Centers for Medicare and Medicaid Services (CMS) would meet the February 18, 2023 deadline to release a final rule on Section 111 reporting civil money penalties (CMPs). However, it was not to be.  CMS extended its deadline for publishing the final rule by a year to February 18, 2024.

Recall that the purpose of the rule is to set out specific criteria for when CMS may impose penalties for what it considers a failure to report or improper reporting.  A summary of the proposed rule can be found here.

In the notice, CMS explains the reason for the extension:

. . . We are not able to meet the initial targeted 3-year timeline for publication due to delays related to the need for additional, time-consuming data analysis resulting from public inquiry. It was not possible to conclude this data analysis on the initial, targeted timeline for the proposed rule because public listening sessions raised additional concerns that CMS believed were important to properly and thoroughly research prior to publishing the final rule. We have decided that it is critical to conduct additional analysis about the economic impact of the rule. We are preparing additional data analysis and predictive modeling to better understand the economic impact of the proposed rule across different insurer types. This data analysis is designed to review the actual current reporting and model potential penalties that would be imposed were the final rule in place. Along with delays resulting from the agency’s focus on the COVID- 19 public health emergency, we determined that additional time is needed to address the complex policy and operational issues that were raised. We are extending the publication deadline so as to provide the most accurate, complete, and robust data possible to confirm the intent and economic impact of the final rule.

Practical Implications

Besides not having to worry about penalties for another year, we are pleased CMS is taking the time to complete a data analysis of the impact of its penalty regulation.  While in its initial regulatory announcement, CMS indicated its rule would not have a significant economic impact, we, as well as others, noted in our comments to the proposed regulation that the authority to impose penalties of up to $1,000 per day per claim could lead to millions of dollars of penalties on even one claim.  This is most definitely a significant economic impact.

As required by law, CMS will eventually make its penalties rule final and issue penalties.  Accordingly, while we await that final rule, you have been granted more time to ensure the accuracy and timeliness of your reporting.

Current Tower Section 111 reporting partners have access to our Section 111 Management Dashboard, which gives you complete visibility into your claims from a global level all the way down to specific claims.  This, along with our standard error reports and consultation on error correction, is the best path forward to eliminate the potential for CMS to impose penalties.

If you do not yet partner with Tower for Section 111 reporting, now is an excellent time to consider the benefits of a platform which seamlessly manages Section 111 reporting, conditional payments, Medicare Set-Aside triage, clinical and legal interventions, MSA preparation, and CMS submission activities.  Don’t hesitate to contact Tower’s Chief Compliance Officer, Dan Anders, at 888.331.4941 or, with any questions.

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