On February 19, 2021, the Centers for Medicare and Medicaid Services (CMS) released the final rule setting out the manner in which civil monetary penalties will be calculated and imposed on Responsible Reporting Entities (RREs) who do not fulfil their Medicare Secondary Payer (MSP) Section 111 reporting obligations.
This comes in response to provisions of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act), directing CMS to specify practices for which RREs may be subject to fines for non-compliance with MSP rules. The decision is of particular importance to Group Health Plan (GHP) and Non-Group Health Plan (NGHP) entities, who are primarily responsible for reporting information to CMS.
According to the final rule published by CMS, penalties will range from $1,000 to $1,500 for each day of non-compliance with MSP reporting requirements for each individual for which the RREs made the non-compliant submissions or non-submissions. This increases the maximum annual penalty from $365,000 to $547,500 per individual, which underlines the regulator’s intent to strictly enforce MSP reporting requirements.
The rule indicates that CMS strives to maintain a balance between ensuring submission of quality data and not significantly disrupting operations of the reporting entities. However, the increased penalties also reinforce the importance of collecting and properly reporting information on element payment responsibility between Medicare and other insurers. This avoids Medicare making mistaken payments, ensuring that when other entities have primary payment responsibility, Medicare remains the secondary payer as intended.
For legal professionals working at large corporations or law firms, this development highlights the importance of adherence to MSP reporting rules. It also emphasises the need for diligent oversight of their practices in order to avoid unnecessary monetary penalties, and maintain compliance with CMS regulations.