CMS hosted a live webinar on January 18^th at 1pm EST.  This webinar provided valuable information for responsible reporting entities (RREs) as the industry prepares for CMS to begin quarterly compliance audits and the imposition of civil monetary penalties.  Please find the highlights of the webinar below and if you have further questions about your Section 111 reporting program and what you can do now to get ready for CMS audits, please reach out to info@allankoba.com and we can assist.  Our Section 111 Reporting audit team is ready to help RREs ensure proper reporting and avoid civil monetary penalties. 

Highlights and Key Takeaways:

• Key Dates:
  • October 11, 2025: Compliance review period begins.
  • April 1, 2026: CMS will begin compliance audits.
• CMS confirmed that the civil monetary penalty (CMP) rulemaking is prospective in nature. There will be no retroactive enforcement per CMS. 
• The CMP rulemaking does not change any existing reporting requirements and RREs are reminded to ensure full compliance today and in the future.
• All technical reporting questions should be submitted to your EDI representative. This information can be found on the RRE Profile Report.
• A random sample of 250 new records per quarter will be audited/reviewed by CMS beginning in the first quarter of 2026.
  • Records will include self-reported records outside of the Section 111 reporting data. CMS will cross-reference other data that they have access to in order to ensure they are also auditing RREs that have failed to report claims via Section 111 rules.
• Definitions provided by CMS of Key Terms:
  • Audit: The process by which CMS will randomly select 250 records for review to determine if they were submitted timely and, if not, if they are ripe for a CMP.
  • Record: Any individual occurrence of a TPOC or ORM for a Medicare beneficiary that must be reported to CMS.  If a particular case has both an ORM and a TPOC component, this will constitute two records.
  • Instance: When referring to instances of noncompliance, any situation, discovered through the audit process, that could result in a CMP as a result of untimely submission of a record.
  • ORM: Ongoing Responsibility of Medicals; RRE’s responsibility to pay, on an ongoing basis, for a Medicare beneficiary’s medical case associated with a claim.
  • Other Operative Dates: When referring to prospectivity of the rule, other operative dates would be things like “funding delayed beyond TPOC” date.
  • TPOC: Total Payment Obligation to Claimant; Dollar amount of a settlement, judgment, award, or other payment in addition to, or distinct from, ORM; generally, a one-time lump-sum amount to an injured party to resolve a payment obligation. 
• TPOC Compliant Reporting MUST occur within 1 year (365 calendar days) of the settlement date reported in Field 80 or the Funding Beyond TPOC Date reported in Field 82, whichever is later.
• ORM Compliant Reporting MUST occur within 1 year (365 calendar days) of the MSP effective Date and ORM selected as Yes.
• Note: A record must be reported AND accepted for it to meet the requirement for timeliness. 
• Audit Process:
  • CMS will make all substantive decisions on CMPs.
  • Informal Notice Process:
    • Notice letter is emailed to Authorized Representative and cc to Account Manager
    • 30 calendar days to provide mitigating factors
  • Formal Notice Process:
    • Sent via Certified Mail to the Authorized Representative
    • Formal regulatory appeals process applies
• Safe Harbors per CMS’s Presentation:

  A CMP will NOT be imposed when:

  Noncompliance is beyond the RRE's control. (Ex.- Existing policy timeframes for a claimant to report an incident.)

  ORM is in dispute (with evidence supporting a late report).

  CMS changes the reporting requirements and/or process without adequate notice (minimum 6• month advance notice).

   
  • • Documented Evidence of a Beneficiary’s failure to provide SSN/HICN must include the following:
      • Once in writing (email is acceptable)
      • Once by mail (Email is not acceptable; Certified Mail is acceptable)
      • Once by phone or any other reasonable method
• Tiered Calculation Approach for CMPs:

  Timeframe	Penalty Amount per Day per NGHP Record
  > 1 year but < 2 years	$250
  > 2 years but < 3 years	$500
  > 3 years	$1,000
  Total Penalty for any 1 instance of noncompliance = NTE $365,000

• Maximum Penalty Clarified:
  • There is a maximum penalty of $365,000 per instance/record and this is subject to inflation adjustments by regulation annually.
  • This is not a per RRE cap.
  • Current 2024 Inflation Adjusted Rates:
    • $1,000/day = $1,428/day or a max penalty of $521,220
    • $500/day = $714/day
    • $250/day = $357/day
• Statute of Limitations:
  • • 5 years, as codified in 28 USC 2462
• What’s Next:
  • • CMS indicated that they will be promulgating an updated user guide in the near future which will contain specifics related to the CMP process.
    • Questions and comments specific to CMPs can be provided to sec111cmp@cms.hhs.gov