Highlights from CMS’ NGHP Civil Money Penalties Webinar

Webinar Desktop

by J. Shymanski

Updated: 1/29/24

– CMS provided a link to slides from their January 18 webinar on the What’s New page of the Mandatory Insurer Reporting for NGHP section on CMS.gov.


On January 18, 2024, CMS hosted a Non-Group Health Plan (NGHP) Webinar entitled Medicare Secondary Payer and Certain Civil Money Penalties. CMS noted that this is part of their on ongoing commitment to keep Responsible Reporting Entities (RREs) informed as the applicable date for CMPs approaches in October 2024.

Highlights from the webinar include:

  • CMS confirmed that the Civil Money Penalties (CMP) Final Rule will be prospective only: there will be no retroactive enforcement related to non-compliance.
  • CMS also confirmed that there is no change to the reporting requirements: RREs will keep the same reporting period and all requirements remain the same.
  • CMS reiterated that technical reporting questions should continue to go to the EDI representative assigned to the RRE.
  • CMS reiterated the main components of the final rule:
    • Rule is focused on timeliness of reporting: timely reporting of the acceptance of Ongoing Responsibilities for Medical (ORM) and Total Payment Obligation to Claimant (TPOC).
    • An audit system will be used: 1,000 records per year (250 per quarter) will be reviewed. A proportionate sample will be taken from GHP and NGHP records.
    • A tiered approach to penalties will apply to NGHP submitters.
  • CMS provided definitions of key terms:
    • Audit: the process by which CMS will randomly select the 250 records (per quarter) 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 for 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 the 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.
    • Compliant vs. Noncompliant Record: determined by comparing the date a TPOC record is accepted against the date CMS should have received the record.
  • CMS outlined important dates:
    • October 11, 2023 – CMP Final Rule was posted to the Federal Register.
    • December 11, 2023 – CMP Final Rule effective date.
    • October 11, 2024 – CMP Final Rule applicable date. The date after which the 365day clock begins to run for when records must be timely submitted.
    • October 11, 2025 – Compliance review period begins for RREs.
    • April 1, 2025 – CMS will begin quarterly compliance audits, reviewing a random sample of new RRE records added the prior calendar quarter.
  • CMS discussed audit process details:
    • There will be a random selection of the 250 new and accepted records per quarter.
    • It will be a pro-rata selection from the newly submitted and accepted GHP and NGJP records.
    • Both Section 111 and self-reported submissions will be included.
    • Noted that failure to report may be discovered through other reporting methods.
    • Stated that errors in reporting can result in a delay of timely reporting – and it is the timeliness of the reporting that is being reviewed and potentially penalized.
    • CMS will make all substantive decisions on CMPs – although their contractors may assist them with administrative tasks (i.e., gathering data).
    • TPOC and ORM are considered separate reporting obligations.
  • CMS also discussed safe harbors and mitigating factors:
    • RREs will be given a chance to provide mitigating evidence as to why a CMP should not be imposed. CMS indicates that all reasonable evidence will be reviewed.
    • Safe Harbor: RREs must document evidence of a beneficiary’s failure to provide information:
      • Once in writing
      • Once by mail
      • Once by phone or any other reasonable method
      • If a beneficiary unambiguously indicates a refusal to provide the information, no further action is needed.
  • CMS and CMP Correspondence:
    • CMS began by asking RREs to ensure that their Profile Report is updated. They stated it is imperative that CMS has the most up to date contact information.
    • Informal Notice to Impose a CMP
      • Letter (notice) will be emailed to RRE’s Authorized Representative and the Account Manager will be copied.
      • Letter will identify the noncompliant record (will not yet impose a CMP).
      • 30 days (within receipt) will be given to submit mitigating factors.
    • Formal Notice to Impose a CMP
      • Sent via certified mail.
      • State that RRE is receiving a CMP.
      • An appeals process is available.
  • Tiered Approach – Calculating the CMP
    • Reporting is late over 1 year but under 2 years: penalty amount per day is $250 (plus inflation adjustment – so, $357 in 2024)
    • Reporting is late over 2 years but under 3 years: penalty amount per day is $500 (plus inflation adjustment – so, $714 in 2024)
    • Reporting is late over 3 years: penalty amount per day is $1,000 (plus inflation adjustment – so, $1,428 in 2024)
    • Total penalty for any one instance of noncompliance is capped at $365,000 (plus inflation adjustment)
  • CMS reiterated that the Statute of Limitations will be 5 years. That time begins when the record is actually reported or when CMS obtains information that could reasonably lead to discovery of noncompliance (like a self-report).
  • CMS noted that CMPs will only be contemplated for untimely reporting of “add” records but noted that accurate reporting is still necessary information and statutorily required. There may be other consequences such as False Claims Act allegations.

During the webinar, CMS also walked through several scenarios where reporting would be considered compliant and some where it would be considered noncompliant. CMS noted that an updated NGHP User Guide would be posted soon and reiterated that questions and comments specific to the CMPs should be sent to: [email protected].

IMPAXX will continue to keep you updated on any information received from CMS regarding Section 111 Reporting and Civil Money Penalties.  If you have any CMP or reporting-related questions, or if you would like more information on IMPAXX’s System Reviews, which can help you stay compliant and reduce your risk of upcoming penalties, contact our Settlement Consulting team at [email protected].