Pension & Benefits News CMS proposes criteria, calculation for Medicare secondary payer reporting penalties
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Tuesday, February 25, 2020

CMS proposes criteria, calculation for Medicare secondary payer reporting penalties

By Pension and Benefits Editorial Staff

The Centers for Medicare and Medicaid Services (CMS) has issued a proposed rule that would specify how and when CMS must calculate and impose civil money penalties when group health plan and non-group health plan responsible reporting entities (RREs) fail to meet their Medicare secondary payer (MSP) reporting obligations in any of the following ways: (1) when RREs fail to register and report as required by MSP reporting requirements; (2) when RREs report as required, but report in a manner that exceeds error tolerances established by HHS; (3) when RREs contradict the information the RREs have reported when CMS attempts to recover its payments from these RREs. The proposed rule also would establish civil money penalty amounts and circumstances under which civil money penalties would and would not be imposed.

CMP imposition and amounts. The proposed regulations would identify circumstances where group health plan entities and non-group health plan entities with RREs would be subject to civil money penalties for violation of sections 1862(b)(7) and (b)(8) of the Soc. Sec. Act. The proposed regulation would establish the amount of penalties imposed against group health plans and non-group health plans. Further, CMS would identify situations where group health plan and non-group health plan RREs would not be subject to civil money penalties for violation of section 1862(b)(7) and (b)(8) of the Soc. Sec. Act.

Under section 1862(b)(7) of the Soc. Sec. Act, a group health plan RRE is subject to a civil money penalty of $1,000, as adjusted annually for each calendar day of noncompliance for each individual for which the required information should have been submitted. Under section 1862(b)(8) of the Soc. Sec. Act, an non-group health plan RRE may be subject to a civil money penalty of up to $1,000, as adjusted annually for each calendar day of noncompliance for each individual for which the required information should have been submitted. These civil money penalties would be in addition to any other penalties prescribed by law, and in addition to any MSP claim under section 1862(b) of the Soc. Sec. Act with respect to an individual.

CMP imposed. CMS would impose a civil money penalty in the following situations: (1) if an RRE fails to report any group health plan beneficiary record within the required timeframe (no more than one calendar year after group health plan coverage effective date or the Medicare beneficiary’s entitlement date, whichever is later); (2) if an RRE fails to report any non-group health plan beneficiary record within the required timeframe (no more than  one year of the date of the settlement, judgment, award, or other payment (also referred to as the Total Payment Obligation to Claimant); (3) if a group health plan’s or non-group health plan’s response to CMS recovery efforts contradicts the entity’s section 111 of MMSEA reporting; (4) if a group health plan or non-group health plan entity has reported, and exceeds any error tolerance(s) threshold established by HHS in any four out of eight consecutive reporting periods.

CMP not imposed. CMS would not impose a civil money penalty in the following situations, where all of the applicable conditions are met: (1) if a RRE reports any group health plan beneficiary record that is reported on a quarterly submission timeframe within the required timeframe (not to exceed one year after the group health plan effective date), or any non-group health plan beneficiary record that is submitted within the required timeframe (not to exceed one year after the Total Payment Obligation to Claimant date); (2) if an RRE complies with any Total Payment Obligation to Claimant reporting thresholds or any other reporting exclusions published in CMS’s MMSEA Section 111 User Guides or otherwise granted by CMS; (3) if a group health plan entity or non-group health plan entity does not exceed any error tolerance(s) in any four out of eight consecutive reporting periods; (4) if an non-group health plan entity fails to report required information because the non-group health plan entity was unable to obtain information necessary for reporting from the reportable individual, including an individual’s last name, first name, date of birth, gender, or SSN, and the responsible applicable plan has made and maintained records of its good faith effort to obtain this information by taking particular steps.

SOURCE: 85 FR 8793, February 18, 2020.

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