Section 111 Reporting Archives

Key Takeaways from CMS Webinar on Civil Money Penalties

January 21, 2026

On January 15, 2026, CMS held a webinar on Civil Money Penalties (CMPs) for Non-Group Health Plan (NGHP) Section 111 Reporting. This was CMS’s final update before the first audits and penalty notices in the first quarter of 2026. Given that penalties can be substantial and impact an organization’s compliance record, understanding these requirements and deadlines is essential for all Responsible Reporting Entities (RREs).

CMS provides a full explanation of its CMP policy on its website here.

Quick Reference: Critical Dates

February 2026: First CMS audits begin
March 2026: First penalty notices expected
July 2026: Workers’ compensation penalty assessments begin

Audits

CMS will conduct its first audits in February 2026. The audit will randomly select 250 records from all accepted Section 111 records and non-Section 111 records obtained through CMS’s coordination of benefits and data collection methods. The 250 records will proportionally represent both NGHP and Group Health Plan (GHP) records from the prior quarter.

For the February 2026 audit, CMS will evaluate records accepted between October 11, 2025, and December 31, 2025. CMS will look forOngoing Responsibility for Meedicals (ORM) assumptions or Total Payment Obligation to the Claimant (TPOC)(TPOC) reported more than 365 days after the reportable event. This applies to ORM assumptions and TPOC dates of October 11, 2024, or later.

What Triggers Penalties

Penalties are assessed when RREs fail to report required information within mandated timeframes. Specifically, CMS looks for:

ORM assumptions reported more than 365 days after the reportable event
TPOCs reported more than 365 days after the reportable event

Special Consideration for Workers’ Compensation

As a result of the implementation of WCMSA reporting in April 2025, CMS announced that it will not assess penalties for late-reported workers’ compensation TPOCs until July 2026, with a lookback period to July 2025 instead of October 11, 2024. This grace period allows RREs to adjust to the new WCMSA reporting requirements.

Safe Harbor Protection

CMS provides a safe harbor when an RRE cannot report a TPOC because the claimant failed to provide information necessary to identify them as a Medicare beneficiary (such as their Social Security number).

Requirements to qualify for safe harbor:

Make two attempts to obtain the information from both the beneficiary and their attorney by mail or email
Make one additional attempt to either the beneficiary or their attorney by phone, mail, or email
Document all attempts with dates, methods, and responses
If either the claimant or their attorney provides a written refusal to cooperate, no further attempts are needed

Important notes:

Federal law does not prohibit the RRE from contacting the claimant directly, even when the claimant is represented by an attorney
Contact must be made with both the attorney and the claimant until one of them either provides the information or provides a written refusal

All documentation of these attempts must be retained and provided to CMS if a penalty arises.

Acceptable documentation includes copies of emails, certified mail receipts, phone logs with dates and summaries of conversations, and written refusals.

Penalty Notice Process

Informal Notice

CMS expects the first penalty notices to be sent in March 2026. These informal notices will be mailed to the RRE’s Authorized Representative, with a copy to the Account Manager. Importantly, the reporting agent (such as Tower or other third-party administrators) will not be copied on the notice.

Action required:

Given the importance of receiving these notices, RREs should immediately verify that their Profile Report contains up-to-date contact information for both the Authorized Representative and Account Manager.

Upon receipt of an informal notice, the RRE has 30 days to provide a response, including a reasonable explanation as to why either the TPOC report or the ORM assumption report was untimely.

Possible defenses include:

The claimant refused to provide their Social Security number (safe harbor applies)
Delayed acceptance of a claim due to litigation or investigation
Administrative errors with documented corrective measures
Technical issues with CMS submission systems

If CMS accepts the explanation, there will be no further action.

WC Reporting Penalties

Formal Notice

If CMS does not accept the explanation or there is no response to their informal notice, a formal notice, called a Notice of Proposed Determination to Impose a Civil Money Penalty, will be mailed to the Authorized Representative and copied to the Account Manager for the RRE.

Appeals Process

The appeals process provides multiple levels of review:

Level 1 – Administrative Law Judge (ALJ): The RRE has 60 days from receipt of the Proposed Determination to appeal to an ALJ.

Level 2 – Departmental Appeals Board: If the ALJ’s decision is unfavorable, the RRE has 30 days to file an appeal with the Departmental Appeals Board Appellate Division.

Level 3 – Federal Court: If the Departmental Appeals Board appeal results in an unfavorable decision, the RRE has 60 days to petition for judicial review in federal court.

Payment

Once the appeals process has concluded, or if no appeal is filed, a Notice of Final Determination will be sent to the RRE. The RRE has 60 days from receipt to make payment electronically through pay.gov.

Best Practices and Final Thoughts

The timeliness and accuracy of Section 111 reporting will mitigate and, ideally, eliminate any possibility of a penalty. To protect your organization:

Proactive measures:

Implement robust processes to capture Medicare beneficiary information at first contact
Establish clear procedures for the three-attempt safe harbor requirement with documentation templates
Maintain detailed records of all attempts to obtain beneficiary information
Review and update your CMS Profile Report contact information immediately
Develop internal timelines that build in buffer time before the 365-day reporting deadline

If you receive a penalty notice:

Respond immediately within the 30-day window
Coordinate with your Section 111 reporting agent, if applicable, to identify all possible defenses
Gather all documentation supporting your explanation

Please contact Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com with any questions.

CMS to Host Webinar on CMPs on January 15

December 10, 2025

The Centers for Medicare and Medicaid Services (CMS) will host a webinar regarding Civil Money Penalties for NGHP Responsible Reporting Entities (RREs) on Thursday, January 15, 2026, at 2:00 p.m. ET. Per CMS:

The presentation by CMS will include reminders about the Final Rule and auditing process, anticipated correspondence, and a question-and-answer session.

Note, this is a different CMS webinar topic than the October 1, 2025, session on WCMSA reporting that was scheduled and canceled due to the government shutdown.

There is no pre-registration for the webinar. Full details, including instructions on submitting questions before the webinar, can be found here and in the “What’s New” section of the CMS website.

WCMSA Reporting and MSP Compliance for 2025: Premier Webinar

December 18, 2024

Topic: WCMSA Reporting & MSP Compliance for 2025
Date: Thursday, January 16
Time: 2 PM ET

Are you prepared for the upcoming changes in workers’ compensation settlements? Starting April 4, 2025, all settlements involving Medicare beneficiaries will require a WCMSA amount to be reported—even if it’s $0—through Section 111 reporting process.

Join Dan Anders, Tower’s Chief Compliance Officer, and Jesse Shade, Chief Technology Officer, for an engaging and insightful webinar designed to help you navigate these significant changes.

In this one hour session, you’ll learn:

The key criteria and timeline for WCMSA reporting.
How to handle the technical implementation and testing process.
What these changes mean for claims professionals, attorneys, and settling parties.
Insights into MSAs and Conditional Payments in 2025.
Updates on Medicare Secondary Payer compliance under the new administration.

Bring your questions! A live Q&A session will follow the presentation, and you can submit questions during registration.

Don’t Wait—Get a Head Start on 2025!

Click below to reserve your spot and get the insights you need to stay ahead.

[Register Now]

Get ready, get informed, and stay compliant—see you on January 16!

Navigating Medicare Secondary Payer Compliance in Denied Workers’ Comp Claims

November 13, 2024

compass representing navigating MSP compliance

We’re excited to share that our Chief Compliance Officer, Dan Anders, is featured in WorkCompWire in an insightful article titled “Handling Medicare Secondary Payer Compliance in Denied Workers’ Compensation Claims.”

In this article, Dan explores:

The complexities of managing Medicare Secondary Payer (MSP) compliance when a workers’ compensation claim is denied.
Best practices to ensure compliance, minimize risks, and keep claim processes moving smoothly.

This is a must-read for anyone involved in claims management, compliance, or risk mitigation.

Read the full article on WorkCompWire: Handling Medicare Secondary Payer Compliance in Denied WC Claims.

At Tower MSA Partners, we’re committed to sharing valuable insights that help our clients navigate the intricacies of MSP compliance. Dan’s expertise provides practical advice on handling denied claims while remaining compliant with Medicare guidelines, and we’re thrilled to bring this knowledge to the broader industry.

For more insights and resources on MSA compliance, check out our blog regularly and follow us on LinkedIn.

October CMS Updates: Section 111 Reporting User Guide and Civil Money Penalties Webinar Highlights

October 31, 2024

CMS Webinar Highlights | Section 111 Reporting User Guide & Civil Money Penalties

Section 111 Reporting User Guide and Civil Money Penalties Webinar Highlights

Stay up-to-date with the latest CMS developments! This month, we’re covering the release of the NGHP Section 111 Reporting User Guide Version 7.7, the annual update to the ICD exclusion list, and key insights from the CMS Section 111 Civil Money Penalties webinar.

NGHP User Guide Version 7.7 Released

On October 7, 2024, CMS published Version 7.7 of the NGHP (Non-Group Health Plan) Section 111 Reporting User Guide. Here are notable updates:

Reporting of Wrongful Death Claims

In Chapter III; Policy Guidance, Section 6.5.1.4, CMS provided the following clarification:

“Note: Settlements, judgments, awards, or other payments obtained entirely under the wrongful death theory of liability, which do not claim and release medicals, or have the effect of releasing medicals, are not required to be reported because Medicare would have no recovery claim against such a payment.”

This statement is consistent with CMS’s previous guidance that Total Payment Obligation to Claimant (TPOC) amounts are reported only when medicals are claimed and/or released, or the settlement has the effect of releasing medicals.

Compliance Flags are now Warning Flags

In Chapter IV: Technical Information, CMS has renamed “Compliance Flags” in Section 7.4 to “Warning Flags.” Additionally, a new “04” warning flag has been introduced. This flag applies to claim response files with open Ongoing Responsibility for Medicals (ORM) records when the later date of either the CMS Date of Incident or the Part A Add Date is more than 135 calendar days after the Start Date of the Responsible Reporting Entity’s (RRE’s) submission period.

Understanding Warning Flags and Penalties

It’s important to note that warning flags do not necessarily equate to a potential civil monetary penalty for late Section 111 reporting. Here’s the key difference:

Warning Flags: Triggered if ORM or TPOC is reported more than 135 days after it should have been reported, as defined in the user guide.
Penalties: Potential penalties don’t come into play until 365 days have passed since the date the information should have been reported.

Why the different timeframes? We assume it is to encourage RREs to report promptly, ensuring CMS has the necessary information to coordinate benefits properly. Warning flags act as a reminder to the RRE that repeated reporting delays could lead to more significant issues, including potential penalties.

Updated ICD Code Excluded List

CMS published its annual update of valid and excluded liability and no-fault ICD-9 and ICD-10 codes for Section 111 reporting purposes. The list can be found here.

CMS Webinar Highlights: Section 111 Civil Money Penalties

On October 17, 2024, CMS hosted a webinar on Section 111 Civil Money Penalties. The webinar slides can be found here. Key takeaways:

Civil Money Penalty Correspondence: Notices will be mailed to the RRE’s Authorized Representative and the Account Manager. Reporting agents, such as Tower MSA Partners, will not receive a copy of the notice. Therefore, it is important for the RRE to ensure address information is up-to-date.

Compliance Clock Started: The compliance clock began ticking on October 11, 2024. Eligible MSP occurrences occurring on or after this date must be reported within 365 days.

Obtaining Beneficiary Information: When trying to gather beneficiary details, such as a Social Security Number, the RRE must reach out to both the beneficiary and, if applicable, their attorney. Contacting only the attorney isn’t sufficient. Additionally, you must make at least three attempts to obtain the information, with at least two attempts made via mail or email.

If you have any questions about these updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at daniel.anders@towermsa.com.

CMS Sets October 17 for Webinar on Section 111 Reporting Penalties

October 9, 2024

Upcoming CMS Webinar on Section 111 Reporting Penalties

The Centers for Medicare and Medicaid Services (CMS) has scheduled an important webinar on October 17, 2024, at 1:00 PM ET, specifically covering Section 111 reporting Civil Money Penalties (CMPs) and their implications for all relevant stakeholders involved in compliance and reporting.

Webinar Format and Focus From CMS

CMS will be hosting a comprehensive webinar regarding Certain Civil Money Penalties for NGHP Responsible Reporting Entities (RREs). This informative session aims to clarify the implications of these penalties and ensure that all RREs are well-informed. The format will include opening remarks from CMS officials, followed by a detailed presentation that will cover essential topics. Attendees can expect reminders about the Final Rule, insights into the auditing process, and critical dates that RREs need to remember. After the presentation, there will be a dedicated question-and-answer session, allowing participants to seek clarification and address specific concerns related to the Civil Money Penalties. This interactive component is designed to enhance understanding and foster engagement among all attendees.

RREs who would like to submit questions in advance of the webinar are encouraged to do so using the dedicated resource mailbox at Sec111CMP@cms.hhs.gov.

There is no pre-registration for the webinar. Full details can be found here.

Previous Webinar Insights

The upcoming webinar focuses on Section 111 penalties, while a previous webinar covered Section 111 reporting best practices and upcoming changes. A copy of the slides and notes of the prior session are here.

CMS recently added a new page to its website, which provides NGHP Civil Money Penalties information, including a flow chart. CMPs are applicable starting October 11, 2024, and audits begin in January 2026. We encourage a review of CMS’ website and articles Tower has published on the topic, including Section 111 Reporting for WCMSAs & Avoiding Civil Penalties.

Tower MSA Partners’ Chief Compliance Officer Dan Anders Featured on Ametros Podcast “It’s Settled”

September 25, 2024

Dan Anders, Chief Compliance Officer at Tower MSA Partners, was recently featured on Ametros’ podcast, “It’s Settled.

We are excited to share that Dan Anders, Chief Compliance Officer at Tower MSA Partners, was recently featured on Ametros’ podcast, “It’s Settled.” In this engaging episode, Dan sat down with Andrea Mills, Ametros’ Chief Client Officer, and John Kane, Senior Vice President of Strategy, to dive deep into the latest news and developments surrounding Medicare Set-Asides (MSAs). This discussion covered essential topics that impact the workers’ compensation and liability settlement space, including upcoming changes to Section 111 reporting, best practices for preparing MSAs, and the value of professional administration.

Upcoming Section 111 Reporting Changes

One of the key topics covered was the upcoming changes to Section 111 reporting and their implications for insurers and self-insured entities. Dan provided insightful commentary on what these changes mean and how they will affect the reporting process. With new compliance requirements on the horizon, now is the time for stakeholders to review their reporting strategies and ensure they are prepared for these regulatory shifts.

When to Prepare an MSA

Another critical topic discussed was when to prepare an MSA. Dan highlighted the importance of evaluating the need for an MSA early in the settlement process to avoid costly delays. He also provided insights into how Tower MSA Partners helps clients navigate complex cases by offering expert guidance on when and how to prepare MSAs effectively.

The Value of Professional Administration

The conversation also touched on the value of professional administration for MSAs, emphasizing how Ametros helps individuals manage their settlement funds to ensure compliance with Medicare’s requirements. Dan, Andrea, and John discussed how professional administration not only ensures the longevity of settlement funds but also helps alleviate the administrative burden on injured individuals.

Tips for Preparing an MSA

During the episode, Dan shared several tips and tricks for preparing an MSA, helping listeners understand the importance of accuracy and thoroughness when it comes to documentation. He also explained how Tower MSA Partners’ streamlined approach helps clients minimize risks and expedite settlements.

Upcoming Webinars and Conferences

As the discussion wrapped up, the group previewed upcoming educational opportunities, including a webinar, A Claims Professional’s Guide to Successful Settlements with MSAs, hosted by Tower MSA Partners on October 2^nd. Dan encouraged attendees to sign up for this and other webinars to stay informed on compliance topics and best practices in the MSA industry.

Listen Now

You can catch this insightful episode of “It’s Settled” featuring Dan Anders by clicking here.

Stay tuned for more updates from Tower MSA Partners as we continue to provide our clients with the latest compliance and settlement strategies. Be sure to sign up for our upcoming October 2nd webinar to stay informed on these important issues.

CMS Sets September 12 for Webinar on Section 111 Reporting

August 28, 2024

Webinar on Section 111 Reporting of WCMSAs

Don’t Miss the CMS Webinar on Section 111 Reporting

The Centers for Medicare and Medicaid Services has scheduled a September 12, 2024 webinar on Section 111 reporting. Per the announcement:

The format will be opening remarks by CMS, a presentation that will include NGHP reporting best practices and reminders, followed by a question and answer session. For questions regarding Section 111 reporting, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110-173SEC111-comments@cms.hhs.gov.

There is no pre-registration for the webinar. Full details can be found here.

While CMS does not indicate the webinar is specific to Section 111 Civil Money Penalties, given that CMPs become applicable as of October 11, 2024, this presents an opportunity to have any questions addressed before that date. Questions around the April 4, 2025 implementation of Section 111 Reporting of WCMSAs would also be encouraged.

New Updates to CMS’s WCMSA Reference Guide and Self Administration Tool Kit

August 7, 2024

The Centers for Medicare and Medicaid Services (CMS) recently updated its Workers Compensation Medicare Set-Aside (WCMSA) Reference Guide and WCMSA Self Administration Toolkit. These updates guide MSA administration when the beneficiary is enrolled in a Part C Medicare Advantage Plan or a Part D Prescription Drug Plan.

WCMSA Reference Guide Update

In its Version 4.1 of the WCMSA Reference Guide, CMS added an “Other Health Coverage,” section. Section 4.1.3 says:

… a WCMSA is still recommended when you have coverage through other private health insurance, the Veterans Administration, Medicare Advantage (Part C) or Medicare Prescription Drug Program (Part D)

CMS added the following as an explanation:

Other coverage could be canceled or you could elect not to use such a plan.

This makes sense for private health insurance, which a person may drop after becoming eligible for Medicare. Likewise, a veteran could treat at the VA initially and later seek treatment outside the VA.

However, CMS’s placement of Medicare Part C and D under “Other Health Coverage” is confusing. These are alternative delivery systems for Medicare benefits; a person must be Medicare-covered to use them. And there is no distinction between original Medicare and Parts C and D when it comes to the need for a WCMSA.

The guide makes clear distinctions regarding the coordination of benefits.

CMS notifies Part C and D plan sponsors that a WCMSA has been approved and instructs plan sponsors to conduct Medicare Secondary Payer (MSP) investigations. However, CMS does not relay WCMSA details to plan sponsors. Instead, CMS instructs plan sponsors to seek WCMSA coverage details from the WCMSA administrator as part of the plan sponsor’s investigation. When possible, Part C and D plan sponsors are required to avoid paying for expenses that should be covered by a WCMSA. (Emphasis added.)

It’s unclear why CMS does not provide WCMSA details to C and D plan sponsors as it does with original Medicare. Perhaps it’s a technology issue. From an MSP compliance standpoint, doing so would be beneficial to the plans and the injured worker as well as the taxpayers who pay for these plans.

A Quick Detour to Conditional Payments

After this section, CMS shifts from its WCMSA discussion to this statement on liens:

When a settlement is reached, the settlement details dictate who is responsible for ensuring Medicare (Parts A, B, C, and/or D) is repaid for any conditional payments associated with the WC illness or injury. If the settlement does not identify funds for past debt, CMS considers those debts up to the date of settlement to belong to the WC insurer.

Recovery may be sought from any party receiving inappropriate payment on behalf of the beneficiary.

This highlights the importance of including in the settlement terms which party is responsible for the resolution of Medicare conditional payments, whether from original Medicare or a Part C or D plan.

The Administrator Provides Treatment Details

Then the text returns to WCMSAs with this:

The administrator must provide details concerning treatments and medications used exclusively to treat a related illness or injury to the plan sponsor so the sponsor may avoid making primary payment in the future.

The MSA must either be self-administered by the injured worker or professionally administered by a third party, such as Ametros.

This last sentence in Section 4.1.3 is explained in more detail in the updated Self-Administration Toolkit, Version 1.6:

CMS will tell your Medicare Advantage or prescription drug plan that a WCMSA has been approved. Insurance plans are not given specific information about treatment and medications that should be covered by the WCMSA. You must tell your insurance plan sponsor any details concerning treatments and medications used exclusively to treat a related illness or injury, so they can avoid making primary payment in the future. CMS requires your plan to contact you or the administrator of your WCMSA to find out which expenses are covered by your WCMSA. The plan must avoid paying for expenses that are included in the WCMSA. The plan has a responsibility to recover any payments it made that should have been paid by the WCMSA. If you do not respond to your plan’s investigation efforts, your coverage may be delayed or cancelled.

If you are enrolled in a Medicare Advantage or prescription drug plan, please contact your plan to discuss your WCMSA, if you have not already done so.

Since CMS does not “relay WCMSA details to plan sponsors,” this appears to be how the Part C and D plans learn which diagnoses, treatments, and medications are included in the MSA.

WC Payers and CMS have made tremendous investments into Section 111 reporting and the WCMSA submission and approval processes. Therefore, it is disappointing that the MSA administrator is responsible for communicating with the Part C or D plan.

It remains unclear exactly how the MSA administrator will communicate with the Part C and D plans. Will the plan provide the administrator with a form or other instructions on how to notify the plans? How often should such communication occur?

All in all, this makes MSA self-administration even more difficult.

Tower does its best to help clients and partners navigate CMS changes. Our Chief Compliance Officer, Dan Anders, is available to answer questions and discuss how these updates affect you. Contact him at daniel.anders@towermsa.com.

CMS Section 111 Reference Guide Update Clarifies Date of Incident Reporting

July 15, 2024

New DOI Reporting Rules for Cumulative Injuries in Section 111 NGHP Guide

The new update of the Section 111 NGHP User Guide, Version 7.6, clarifies how to report the Date of Incident (DOI) in a Cumulative Injury. The Centers for Medicare and Medicaid Services added the following to Chapter III Policy Guidance, Chapter 2: Introduction and Important Terms:

Note: Cumulative injury refers to those categories of injuries that may persist or grow in severity, intensity, or pain but for which a formal diagnosis may not occur until a later date. Examples of cumulative injuries include, but are not limited to, carpal tunnel syndrome, or back pain that is not the result of an acute trauma. Exposure, ingestion, and inhalation injuries are not considered cumulative injuries for purposes of calculating DOI or any other reporting requirements.

Differentiating DOI Reporting for Cumulative Trauma vs. Exposure, Ingestion, or Inhalation Claims

We assume CMS added this note to ensure that RREs do not use the definition for DOI in cumulative trauma claims when they report an exposure, ingestion or inhalation claim, as there is indeed a difference.

Cumulative Trauma Claim DOI is defined as: The earlier of the date that treatment for any manifestation of the cumulative injury began, when such treatment preceded formal diagnosis, or the first date that formal diagnosis was made by a medical practitioner (for claims involving cumulative injury).

The guide defines the exposure, ingestion or implant DOI as:

The date of first exposure (for claims involving exposure, including; occupational disease)
The date of first ingestion (for claims involving ingestion)
The date of the implant or date of first implant, if there are multiple implants (for claims involving implant(s)

The NHGP update to Chapter IV Technical Information, Section 6.3.3 also included this addition regarding TIN/TN errors:

If your address fails validation with USPS, you must visit your local USPS office to correct this issue. Please make the correction immediately, as TN errors delay MSP records posting.

Per Section 6.6.5 of the guide:

RRE Address Validation

• RREs are encouraged to pre-validate insurer and recovery agent addresses using postal verification software or online tools available on the USPS website pages such as https://tools.usps.com/go/ZipLookupAction_input. RREs should try to use standard abbreviations and attempt to limit data submitted in these fields and adhere to USPS standards. The address validation enhancements in place will “scrub” addresses submitted on the TIN Reference File using USPS standards, and we recommend that RREs also attempt to meet these standards, to improve results. Although NGHP DDE reporters do not submit TIN Reference Files, they do submit the same TIN information online. It is recommended that DDE reporters also pre-validate RRE addresses.

CMS stressed:

Please address errors immediately, as TIN errors delay MSP record posting.

In short, make sure your TIN Reference File has a USPS-accepted address. If you are a Tower Section 111 reporting client, we will advise you if the file contains an error and recommend a correction and resubmission.

If you have any questions, please contact Dan Anders at daniel.anders@towermsa.com.