CMS to Require Section 111 Reporting of WCMSA Amounts

November 16, 2023

Picture of Medicare billing statement for Section 111 WCMSA reporting

In its November 13, 2023 webinar, the Centers for Medicare and Medicaid Services (CMS) announced plans to require the report of a Workers’ Compensation Medicare Set-Aside (WCMSA) amount concurrently with the report of Total Payment Obligation to the Claimant (TPOC) as part of Section 111 Mandatory Insurer Reporting.  CMS’s purpose in adding this requirement is to better identify when a Medicare beneficiary claimant has primary payer responsibility for future injury-related medical services.

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

Below is a breakdown of the critical questions and answers provided by CMS:

Can CMS require reporting of WCMSAs through Section 111?

CMS cites Section 111 as its authority to specify the information to be reported to them to make an appropriate determination about coordination of benefits.

Does this requirement affect CMS-approved WCMSAs, non-CMS-approved WCMSAs, or both?

It is required for all WCMSAs, whether approved or non-CMS approved.  In short, if a claim is reportable for TPOC, then the WCMSA fields must be completed, even if it is to indicate a $0 MSA.  CMS advised that there are no low-dollar thresholds for reporting the WCMSA amount except those already incorporated into mandatory reporting, i.e., the $750 threshold for reporting physical trauma-based injuries.

What fields will be added to Section 111 reporting?

  • MSA Amount
  • MSA Period: If the MSA is more than $0, report the period of years the MSA amount is to cover.
  • Lump/Annuity Indicator: If the MSA is more than $0, report whether the MSA is set up as a lump sum or structured annuity.
  • Initial Deposit Amount: If the MSA is set-up as a structured annuity, provide the initial deposit amount.
  • Anniversary (Annual) Deposit Amount: If annuity, the annual deposit amount.
  • Case Control Number: If a CMS-approved MSA, the assigned Case Control Number (Optional field).
  • Professional Administrator EIN: If there is a professional administrator for MSA

CMS stated there will be no changes to the Section 111 Response File Layout.  Further, errors about the WCMSA reported information will be returned as new soft or hard edits on the Section 111 NGHP Claim Response File according to current processing standards.  CMS advised additional details on this will be provided in the future.

What will CMS do with the WCMSA information it receives?

Regarding CMS-approved MSAs, CMS stated that while it has the approved amount on file, it can only move ahead with coordination of benefits (denial of payment for injury-related treatment) once it has been notified of a settlement, which includes amounts for future medical.

The final settlement documents must be uploaded to CMS after CMS MSA approval per the current rules.  However, this is sometimes not done post-settlement.  Consequently, requiring the reporting of the WCMSA amount through Section 111 reporting will act as another method by which CMS can initiate coordination of benefits based on the WCMSA.

Concerning non-CMS-approved MSAs, once notified, CMS will send the Medicare beneficiary claimant the same documentation a claimant currently receives for a CMS-approved MSA, which provides guidance and rules around MSA attestation and exhaustion.

When is the start date for reporting WCMSA information?

CMS has tentatively set the start date for reporting WCMSAs as January 2025.  The planned timeframe is for an updated file layout and error codes to be released in early 2024, with testing in the fall of 2024.

Will the WCMSA reporting requirement be retroactive?

CMS has not decided if the requirement will be retroactive.  We hope and will advocate that CMS implements this only on a prospective basis.

What if the MSA is for a non-Medicare beneficiary?

In some cases, MSAs are incorporated into settlements on individuals who are not yet Medicare beneficiaries but, for example, may be close to becoming Medicare eligible.  There is no Section 111 reporting requirement in these cases, thus no obligation to report a WCMSA amount.

How should RREs plan for this reporting change?

The addition of WCMSA fields for Section 111 reporting represents a technical and training challenge for RREs.  If claims adjusters currently enter data into Section 111 reporting fields on their claims systems, these new fields will need to be added, and adjusters will need to be trained on the procedures for entering information into these fields.

As we receive more information from CMS on the update to the reporting fields, we will provide guidance and recommendations to our Section 111 reporting clients.

Note, for Tower Section 111 reporting clients, we have your CMS-approved MSAs in our system to ensure these are reported appropriately at the time of TPOC reporting. We can also flag non-submit MSAs for reporting, but we will need certain additional information, such as whether a professional administrator is assigned to the MSA, to fully report.

If you have any comments or concerns, CMS asked that you email them to Also, please feel free to contact Tower’s Chief Compliance Officer, Dan Anders, at


Recap–Special Webinar: Your Need-to-Know Guide on Section 111 Reporting Penalties

October 31, 2023

blocks spelling RECAP regarding the recap of Section 111 Penalties webinar

On October 18 Tower’s Chief Compliance Officer Dan Anders and Chief Technology Officer Jesse Shade presented an informative webinar on Section 111 reporting and the final rule on Civil Monetary Penalties for untimely reporting. As shared in our post, these range from $250 per calendar day to $1,000 for each calendar day of non-compliance. Dan defined Section 111 reporting and covered the history of the penalty regulation before digging into the details and effects on payers. Here are some highlights:

Key dates

Penalties only apply to claims on and after December 11, 2023. Additionally, only 1,000 claims a year – from Group Health as well as Non-Group Health Plans – will be audited. The Centers for Medicare and Medicaid (CMS) will not issue penalties before October 11, 2024.

Dan advised that RREs should ensure that Ongoing Responsibility for Medicals (ORM) and Total Payment Obligation to the Claimant (TPOC) are reported in a timely fashion (within 135 days) in the quarterly file submission closest to the dates.

 Triggers for reporting

  • Acceptance of ORM
  • Termination of ORM
  • Total Payment Obligation to the Claimant (TPOC)

Although all three milestones require reporting, there is no penalty for untimely reporting of termination of ORM. (However, if termination is not reported, an RRE could receive repayment demands after it is no longer liable to pay for medical treatment.)

Penalty process

The first penalty notification is informal and gives the Responsible Reporting Entity (RRE) 30 days to respond with any mitigating evidence.  If CMS doesn’t receive a response or accept the explanation, a formal notice will be issued.  RREs can pay the penalty or appeal it to an Administrative Law Judge.

Dan suggested examples of mitigating information and outlined the appeal process.  He also provided hypothetical cases that illustrate what could and would not risk one of these penalties.


While the chance of receiving a penalty is relatively small, why risk it at all?  Compliance steps:

  • Query for Medicare-eligible claimants every month
  • Document attempts to obtain missing data (CMS prescribes the number and type of attempts.)
  • Report ORM and TPOC within the next quarterly file submission

How Tower Helps

Jesse Shade demonstrated several powerful tools in Tower’s Section 111 portal that make it easier for RREs to comply with all aspects of Section 111 reporting.  Through the portal, RREs gain insight into individual claims or groups of claims and can:

  • See errors that must be fixed before CMS can accept a file
  • Drill down into specific error codes in order to correct them in the claims software
  • Identify claims that could require ORM or TPOC reporting
  • Find Medicare-eligible claims with open ORM that could be closed.
  • Run and download reports to share with colleagues.

Your organization does not use Tower’s Section 111 reporting platform? Consider having Tower audit your Section 111 reporting program. This will identify the potential for penalties and reveal other issues that could lead to unwarranted conditional payment demands.

Finally, some Q&As

Who receives the notice of penalty?

 The RRE, of course.  We will also advocate that the reporting agent, Tower, receive a copy of the penalty notice, both informal and formal.

Are defense attorneys or other attorneys required to report Medicare beneficiaries?

There are no duties under the regulation for the attorney. This is specific to the RRE and claims handler. An attorney could be involved in tracking social security numbers or other claimant data for the RRE.

We have been advised that those enrolled in Medicaid are exempt from Section 111 reporting requirements. Is that correct?

That is correct; this only applies to Medicare.  However, if a claimant is a dual beneficiary enrolled in Medicare and Medicaid, then there would be a reporting obligation based on the Medicare enrollment.

What happens if the claimant doesn’t report the incident in a timely manner?

Interesting question.  In this case, the RRE could be reporting ORM for an injury that happened over a year earlier.  Or if a claim was initially denied but later accepted, perhaps due to a judicial decision, there could be an ORM reported more than a year after the date of injury. This seems like an explanation that CMS would accept and why the informal notice and response process is so important.

Do you still have questions about Section 111 reporting or a specific claim?  We are happy to help and like a challenge.  Please contact

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.

Special Webinar: Your Need-to-Know Guide on Section 111 Reporting Penalties

October 16, 2023

Pctures with details regarding the October 18th Webinar on Section 111 Penalties

CMS recently published its final rule on the imposition of Section 111 Mandatory Insurer Reporting penalties.  While we addressed the specifics of the rule in our article, CMS Section 111 Penalties Rule Focuses on Untimely Reporting, we know that many questions remain.

In a special webinar on October 18 at 2 p.m. ET, Tower’s Chief Compliance Officer, Dan Anders, and Chief Technology Officer, Jesse Shade, will provide your need-to-know guide to these penalties.  Topics will include:

  • Complete analysis of the rule, including criteria, penalty amounts and appeals
  • Examples of reporting situations which will and will not run afoul of the rule
  • Safe harbors from penalties
  • Best practices to mitigate and eliminate the potential for penalties
  • Resources available to Tower Section 111 reporting clients to ensure proper reporting

A Q&A session will follow the presentation, and we encourage you to submit questions when you register. Please click the link below and register today!

Please note there is no CEU credit offered for this webinar.

Register Here



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