Flagship Services Group Blog

A Closer Look at Proposed Civil Monetary Penalties: Registering and Reporting

Mar 19, 2020 6:26:00 PM / by Robert J. Finley

In the first of a three (3) part series, we will take a closer look at each of the key pillars in the new proposed rules, starting with Failing to Register and Report.  The final two (2) parts will cover Poor Quality of Reported Data, and Recovery Information Contradicting Reporting.


On February 18, 2020, CMS published new proposed rules, Medicare Program: Medicare Secondary Payer and Certain Civil Money Penalties, for calculating and imposing certain civil monetary penalties (CMP), adjusted annually, against group and non-group health plans which fail to meet mandatory Section 111 reporting requirements by failing to register and report; reporting in a manner that exceeds error tolerances; and/or contradicting reported information during CMS repayment recovery processes.  CMS is currently accepting public comments on the Section 111 proposed rules which is scheduled to end on April 20, 2020.  The 60-day comment period would indicate this is a significant rule.


Failing to Register and Report



  • Group Health Plans (GHP) which fail to report within one year of the coverage effective date are subject to CMP of $1,000/day of noncompliance for each individual whose coverage information should have been reported, and up to a maximum of $365,000 per individual per year.




  • Non-group Health Plans (NGHP) which fail to report within one year of the date of a settlement, judgment, award or other payment are subject to CMP of $1,000/day of noncompliance for each individual whose information should have been reported, and up to a maximum of $365,000 per individual per year.



The CMS also proposed safe harbors based on technical errors or mistakes, and claims involving non-cooperative beneficiaries.  The proposed regulation includes a warning period to mitigate penalties prior to an administrative appeals process. Finally, the monetary penalty may only be imposed within 5-years from the date CMS identifies non-compliance, CMS proposes methods to calculate civil monetary penalties for group, non-group plans


Naturally, these proposed Registering and Reporting rules raise fundamental but high-level questions for self-insureds, insurers, underwriters, third-party administrators, and reporting entities such as “Who is a GHP, Who is an NGHP, and Who is Not?” (see also instructive cases involving legal malpractice liability insurance, Oregon State Bar Professional Liability Fund v. United States Department of Health and Human Services (D. Or. Mar. 29, 2012), and workers compensation insolvency insurance CAL. Ins. Guarantee Ass’n V. Azar  (9TH CIR. 2019) 940 F.3D 1061, as well as practical management and administrative matters like “What ‘coverage information’ must be reported? What ‘individual information’ must be reported? When is the ‘coverage effective date’?, and “What is the significance of timely ORM termination?”, and percolating legal issues to define and apply regulatory language, for example, imposition within 5-years, CMS identifying non-compliance, safe harbors, errors or mistakes, non-cooperation, good faith efforts, reporting failure, or determining and mitigating daily and yearly monetary penalties.


Afford time to watch, listen and think as the dramatic yet deliberate rulemaking process unfolds.


Flagship Services Group is the premier Medicare and Medicaid compliance services provider to the property & casualty insurance industry. Our focus and expertise have been the Medicare and Medicaid compliance needs of P&C self-insureds, insurance companies, and third-party administrators. We specialize in P&C mandatory reporting, conditional payment resolution, and set aside allocations. Whether auto, liability, no-fault, or work comp claims, we have assembled the expertise, experience and resources to deliver unparalleled MSP compliance and cost savings results to the P&C industry. To find out more about Flagship, our team, and our customized solutions, please visit us at www.flagshipservicesgroup.com. To speak with us about any of our P&C MSP compliance products and services, you may also contact us at 888.444.4125 or info@flagshipsgi.com.



Tags: MSA, civil monetary penalties, Robert Finley, Flagship Services, CMP, MSP, Medicare, Medicare Second Payers

Robert J. Finley

Written by Robert J. Finley

Robert J. Finley, a partner with Hinshaw & Culbertson LLP, has litigation and trial practice experience focused in tort, employment and healthcare. He also counsels firm clients under health plans, auto, property/casualty, no-fault, and workers compensation policies on Medicare repayment and Medicaid reimbursement compliance. Robert advises Flagship Services Group on high value matters, in administrative hearings, and with educational solutions involving Medicare Secondary Payer issues. For more information, visit: https://www.hinshawlaw.com