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 * 
 * Medicare
 * Coordination of benefits & recovery
 * Mandatory insurer reporting (NGHP)
 * NGHP Civil Money Penalties


PAGES IN THIS SECTION

 * * * Mandatory insurer reporting (NGHP)
     * * What's New
       * NGHP User Guide
       * NGHP Alerts
       * NGHP Civil Money Penalties
       * NGHP Training Material
       * NGHP Transcripts
       * Archive


NGHP CIVIL MONEY PENALTIES




 Section 111 Reporting and Civil Money Penalties  

 

CMS published regulations regarding Civil Money Penalties (CMPs) in the Federal
Register on October 11, 2023. The regulations have been incorporated into the
Code of Federal Regulations, and a copy can be found in the Downloads section
below. These regulations are applicable as of October 11, 2024, and will be
enforced as of October 11, 2025. While this section discusses compliance and
CMPs, RREs are reminded to always refer to the NGHP User Guide for information
and instructions pertaining to the specifics of mandatory insurer reporting
requirements. Any examples provided herein are intended to be illustrative only
and should not be relied upon for policy guidance purposes. Where there appears
to be a contradiction, the published User Guides take precedence over this
information and should be referenced. 

 

CMPs will only be issued by CMS on a prospective basis, and there will be no
instances of retroactive enforcement related to noncompliant reporting. More
details regarding what is considered timely reporting and when enforcement will
begin can be found below. 

 

Questions regarding CMPs should be directed to CMS via the dedicated resource
mailbox at Sec111CMP@cms.hhs.gov. Technical reporting questions should continue
to go to the assigned EDI Representative.  

 

Non-Compliance 

 

For the purposes of compliance with mandatory insurer reporting obligations, a
“record” is defined as any individual occurrence of a Total Payment Obligation
to Claimant (TPOC) or Ongoing Responsibility for Medicals (ORM) for a Medicare
beneficiary that must be submitted via the Section 111 reporting process. Note:
If a particular case has both an ORM and a TPOC component, this will constitute
two records. 

 

Records are required to be submitted in a timely manner. An RRE is considered to
be in compliance with the timeliness requirement if a record is reported within
1 year (365 days) of the latter of either the Settlement Date reported in “Field
80” or the Funding Delayed Beyond TPOC Date reported in “Field 82” AND the MSP
Effective Date and ORM are selected as “Y”. It is ultimately the RRE’s
responsibility, and not the reporting agent’s responsibility, to ensure that
Section 111 records are submitted to CMS in a timely manner, if such a service
is being used. 

The date the 365-day “compliance clock” begins to run, or is applicable, is
October 11, 2024. Applicable means every reportable MSP occurrence that occurs
on or after October 11, 2024, is eligible for review of compliance. Compliance
with reporting obligations is defined by the rule as the successful submission
and acceptance of the report of NGHP coverage, acceptance of ORM, or TPOC.  

 

NGHP RREs are eligible to receive a CMP up to $1,000 (as adjusted), per instance
of noncompliance, for each calendar day a record is late with a maximum penalty
of $365,000. CMS has the statutory authority under 45 CFR § 102 to adjust NGHP
penalty amounts; more details regarding the calculation of CMP penalty amounts,
specific to NGHP RREs, can be found below. 

 

A note of caution: While CMPs will be issued on a prospective basis for new
coverage records, accurate reporting overall is still statutorily required, in
addition to being an important tool the Medicare program uses to ensure proper
payment of claims. RREs who fail to meet their full reporting obligations may
face other recovery actions including, but not limited to, False Claims Act
suits or administrative recovery efforts.  

 

Review of Records to Identify Non-Compliance  

 

Beginning January 2026, and continuing on a quarterly basis, CMS will randomly
select 250 MSP records to audit for Section 111 reporting compliance. This
sample of 250 will be selected across the entire universe of accepted new
Section 111 records received during the specific review period, as well as
records Medicare received from non-Section 111 sources such as providers or
beneficiaries. The 250 records are not selected per each RRE. While
statistically unlikely, there is always a chance that an RRE may have more than
one (1) record selected in the sample. The 250 randomly selected records will
proportionately represent the GHP and NGHP records accepted in a given quarter.
For example, if during a given quarter 60% of the newly accepted records were
NGHP and 40% of the newly accepted records were GHP, the 250 sampled records
will reflect this distribution.   

 

Note: The 250 randomly selected records will include both Section 111 and
non-Section 111 records. A non-Section 111 record is defined as a TPOC and/or
ORM record that has been reported via other coordination of benefits and data
collection methods. For the purposes of CMS’ audit, any non-Section 111 records
captured are those that were reported the same quarter CMS is reviewing, but
from the prior year, since RREs are required to report within 1 year (365 days)
of the latter of either the Settlement Date reported in “Field 80” or the
Funding Delayed Beyond TPOC Date reported in “Field 82” AND the MSP Effective
Date and ORM are selected as “Y”. 

 

CMS will audit the sampled records to identify potential instances of
non-compliance. Records reviewed and identified as “compliant” will not trigger
any notification to the RRE. An RRE will only receive CMS correspondence if one
of its records has been identified as potentially noncompliant. Additional
information regarding CMP letters and the process RREs can anticipate if a
potentially noncompliant record is identified can be found in the following
section. 

 

Penalty Amounts 

 

If, in its review, CMS identifies any record where a NGHP RRE has failed to meet
the timeliness requirements, that RRE is subject to a CMP (as adjusted for
inflation) for each calendar day that record is considered to be out of
compliance pursuant to the following chart of penalty amounts.  

 

 

Late Record Timeframe 

Penalty Amount per Day per NGHP Record 

> 1 year but < 2 years 

$250 

> 2 years but < 3 years 

$500 

> 3 years 

$1,000 

Note: Annual inflation rates will apply, and the total penalty for any one (1)
instance of NGHP noncompliance is not to exceed $365,000.  

 

NGHP Section 111 records that fail to meet the timeliness requirement will be
identified through the date the record was reported and accepted, being 365 days
greater than the of the latter of either the Settlement Date reported in “Field
80” or the Funding Delayed Beyond TPOC Date reported in “Field 82” AND the MSP
Effective Date and ORM are selected as “Y”.   

 * Example: An RRE’s record is randomly selected for a CMS quarterly audit. The
   RRE reported the TPOC on May 1, 2026, but the Medicare beneficiary settled
   their liability case on February 5, 2025.  
   
   * The record should have been reported no later than February 5, 2026, but
     was actually reported 85 days later. 
   
   * The RRE would be subject to a CMP for the period between February 5, 2026,
     and May 1, 2026. A penalty amount of $250 per day of noncompliance, 85
     days, would be applied. An Informal Notice identifying the noncompliant
     record would be issued with a potential CMP amount of $21,250 (as adjusted
     for inflation). 

 

Non-Section 111 records are also a factor in the determination of timely
reporting. A non-Section 111 record that is reported and accepted but does not
have a corresponding Section 111 record that was reported and accepted within
365 days as described above, will fail to meet the timeliness requirement. 

 * Example: A Medicare beneficiary is involved in a car accident on November 1,
   2024, and self-reports a TPOC on June 15, 2025. This non-Section 111
   self-report record was randomly selected and as of October 1, 2026, date of
   the CMS audit, the RRE never reported the TPOC via Section 111. 
   
   * The non-Section 111 record should have been reported via Section 111 no
     later than June 15, 2026. 
   
   * The RRE would be subject to a CMP for the period of June 15, 2026, through
     October 1, 2026. A penalty amount of $250 per day of noncompliance, 108
     days, would be applied. An Informal Notice identifying the noncompliant
     record would be issued with a potential CMP amount of $27,000 (as adjusted
     for inflation). 

 

As required by law, the $250, $500, and $1,000 daily CMP amounts will be
adjusted annually to account for inflation; upon publication of the adjustment
notice in the Federal Register, an Alert will be posted on the What’s New page
notifying RREs of the adjusted CMP amounts. The 2024 inflation-adjusted rates
are $357, $714, and $1,428, respectively. 

 

Letters 

 

CMS will communicate with the RRE only when a potential instance of
non-compliance is identified. The RRE’s Authorized Representative will receive
all CMP correspondence, with a copy issued to the Account Manager.  

 

Reminder: RREs must ensure the Profile Report recertification has been completed
and all contact information is current to ensure that your organization does not
miss any CMP-related correspondence. Failure to ensure all contact information
is accurate is not an acceptable defense against a CMP. 
 
For a visual representation of the CMP process and when RREs can anticipate
receiving letters, please refer to the CMP Workflow available in the Downloads
section below.  

 

Informal Notice- Intention to Impose a Civil Money Penalty  

 * First letter (Notice) issued when a noncompliant record was identified on
   CMS’ quarterly audit.  

 * A CMP is not being assessed at this point, rather, the RRE’s noncompliant
   record is identified along with the associated information so that an RRE may
   investigate the record. 

 * The process to submit mitigating information, in an attempt to explain or
   defend technical or administrative issues resulting in the noncompliance is
   outlined in this letter. Mitigating evidence must be submitted to CMS within
   30 days of receipt of the Informal Notice. This is the opportunity for RREs
   to explain why a CMP should not be imposed. 

 

Decision Regarding Mitigating Evidence Submission 

 * If an RRE believes that there were circumstances beyond its control that
   prevented it from reporting on time, responding to the informal notice can
   help reduce the amount of a CMP or even avoid a CMP altogether. CMS reviews
   all reasonable evidence submitted timely by the RRE. 
   
   * Extensions to the RRE’s required 30-day response time will not be
     granted.  
     
     * Note: CMS may request clarification on, or further explanation of, an
       RRE’s submitted evidence, but this step of the process only affords the
       RRE one (1) submission opportunity.   

 * If CMS determines the submitted evidence was sufficient and supports the
   RRE’s defense against CMS’ finding of noncompliance, a CMP will not be
   issued. No additional action is required by the RRE. 
   
   * Each decision regarding the mitigating evidence submitted only pertains to
     that specific record referenced in the Informal Notice. 

 * If CMS determines the submitted evidence was insufficient or the RRE’s
   submission of mitigating evidence was not submitted within the required
   timeframe, CMS’ original finding of noncompliance will be upheld and a
   Proposed Determination to impose a CMP will be issued. 

 

Notice of Proposed Determination to Impose a Civil Money Penalty  

 * If there is no response to the informal notice, or the RRE has not provided
   sufficient mitigating evidence, the process progresses to the first step of
   the formal process, with the issuance of the Notice of Proposed
   Determination. This letter (notice), sent via Certified Mail, provides the
   RRE with the CMP amount that CMS intends to impose, and how to further
   appeal. 

 * RREs are afforded the right to request a hearing as set forth under 42 CFR §
   405 and in accordance with 42 CFR Part 1005 and must do so within 60 calendar
   days of receipt of the Notice of Proposed Determination. 
   
   The process to request a hearing with an Administrative Law Judge (ALJ) is
   outlined in this letter and must be completed within the required timeframes,
   must be filed electronically with the Departmental Appeals Board (DAB), Civil
   Remedies Division, using the DAB E-File System available at
   https://dab.efile.hhs.gov, and must be completed within the required
   timeframes. The RRE may appeal the ALJ’s initial decision to the DAB’s
   Appellate Division (the “Board”) within 30 calendar days of the ALJ decision.
   Appeals to the Board must also be submitted through DAB E-File. The Board’s
   decision becomes binding 60 calendar days following service of the Board’s
   decision, absent petition for judicial review. 

 * The RRE will be precluded from appealing a final determination to impose a
   CMP, pursuant to 42 CFR § 402.9(c), if the hearing is not requested within
   the required timeframe.  

 

Notice of Final Determination to Impose a Civil Money Penalty  

 * If the RRE does not request a hearing or appeal, elects to terminate the
   appeals process, or otherwise exhausts all available administrative appeal
   rights and the CMP is upheld, the Notice of Final Determination will be
   issued. This letter (notice), sent via Certified Mail, confirms the that the
   imposition of the RRE’s CMP is final. 

 * Instructions on how the RRE should remit payment, and its due date, are
   included in the Notice of Final Determination.  

 



DOWNLOADS

 * Civil Money Penalties Final Rule (PDF)
 * CMP Work Flow (PDF)

Page Last Modified:
09/23/2024 05:10 PM
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