CMS Extends Timeline for Publication of Final Rule for Section 111 Civil Monetary Penalties by One Year

Gavel on a desk in the forefront with a person holding a law book and legal scales in the background

by B. Smith

On the three year anniversary of the Section 111 Proposed Rule for Civil Monetary Penalties (CMPs) the Centers for Medicare & Medicaid Services (CMS) filed a notice of extension for a final rule for CMPs. CMS indicated that more time is needed for a review of the economic impact of the final rule, extending the timeframe to February 18, 2024.

In March 2022, CMS sent a final rule to the Office of Management and Budget for review. Although CMPs could be greater than $1,000 per day, per claim for each day of Section 111 non-compliance, CMS characterized the rule as being non “economically significant”. IMPAXX, in our response to the proposed rule, contended that the amount of the proposed penalties was not in proportion to what CMS would be entitled to as part of any conditional lien recovery and was clearly excessive. Further, as members of the Medicare Advocacy Recovery Coalition (MARC), we were able to discuss the need for an economic analysis, prior to the release of the final rule, with the Office of Management and Budget (OMB). OMB agreed with MARC’s recommendation and CMS is now moving forward with this economic analysis.

Specifically, the notice of extension states in pertinent parts as follows:

…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 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.

This document extends the timeline for publication of the final rule for one year until February 18, 2024.

The most important takeaways from the release of the notice include the following:

      • CMS has not withdrawn the final rule for CMPs and is only extending the time for publication.
      • If the economic analysis is completed prior to February 2024, we could see the final rule earlier than this deadline.
      • If you are considering changing Section 111 Reporting platforms, now is a good time to do so.
      • You have additional time to address whether you are reporting correctly and/or have gaps or mistakes in your reporting process. Consider a Section 111 Review audit to identify and address any process or program deficiencies prior to the implementation of the final rule.
      • Remember that although the final rule has been delayed, improper reporting to Medicare continues to result in conditional lien exposure today.
      • If your mandatory reporting system is not configured with the latest CMS updates, including the software update needed to receive PAID Act query information, you could be exposing yourself to additional risk.

For questions regarding CMPs and Mandatory Insurer Reporting, or for further information regarding our Section 111 Reviews and Reporting services, please contact the Settlement Consulting team at [email protected].