Flagship Services Group Blog

A Closer Look at Proposed Section 111 CMPs: Recovery Information Contradicts Reporting

Apr 14, 2020 1:27:56 PM / by Robert J. Finley

In this, our final of a three-part series taking a closer look at each of the key pillars in CMS’ new proposed rules for Civil Monetary Penalties (CMP).  Our first two parts looked at Failing to Register and Report, Registering and Reporting, and Poor Quality of Reported Data, Poor Quality of Reported Data.

On February 18, 2020, CMS published new proposed rules,  Medicare Secondary Payer and Certain Civil Money Penalties, for calculating and imposing CMPs, 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. The proposed rules result from CMS’ analysis and discussion of common issues raised by December 2013 ANPRM. Again, this is a proposed rule, CMS is soliciting comments which is scheduled to end April 20, 2020; therefore, these rules are not final yet.

Recovery Information Contradicts Reporting

  • Entity timely performs required Section 111 reporting which is of quality rank. Subsequently, however, the entity responds to MSP recovery efforts by providing information that contradicts the reported information.
  • Entity is subject to a CMP based on the number of calendar days that the entity failed to appropriately report updates to beneficiary records, as required for accurate and timely reporting.
  • Both GHP and NGHP penalties are subject to $1,000/day per individual. For NGHP entities, the penalty is “up to” $1,000/calendar day (adjusted annually), and the maximum penalty would be $365,000 (365 days) per individual.
  • CMS provides an example: if a responsible reporting entity reported and repeatedly affirmed ongoing primary payment responsibility for a given beneficiary, then responded to CMS repayment efforts asserting that coverage for that beneficiary terminated two (2) years prior to the issuance of the recovery demand letter.

There are no explicit safe harbors or good faith efforts identified in the proposed rule where CMS would not impose a CMP where an RRE contradicts its own reporting in the recovery process. “If an RRE submits a dispute or redetermination request in response to the recovery process that appears to directly contradict its own reporting, an informal written notice of non-compliance identifying the nature of the non-compliance and the determination of the potential amount of the CMP would be issued to the RRE.” The RRE would have 30 calendar days to respond with mitigating information before the issuance of written notice.

CMP stakes are high, while perfect knowledge is rare. Each type of claim—e.g. liability, no-fault, workers compensation—presents different issues and decisions. The investigation and discovery of facts or professional opinions may change over various stages of claim. Claims resolution comes in a variety of different ways such as avoidance, exhaustion, administrative decisions, court orders, jury verdicts, arbitration awards, mediation memorandums, and settlements agreements.

Merriam-Webster Dictionary defines contradict:  (1) to assert the contrary of: take issue with (e.g. She contradicted her brother’s account of what happened); and (2) to imply the opposite or a denial of (e.g. Your actions contradict your words). Is it permissible for an RRE to deny or refuse to accept earlier “facts” and opinions on medical diagnoses and causality? May an RRE concede to the “truth” if it’s discovered during the recovery process? Should an RRE contravene where it is not intentionally opposing but wishes to point out some inherent incompatibility in the reporting versus recovery processes? Will the CMS final CMP rule provide RREs a greater number and/or more specific illustrations on “contradictions”, rather than a single, vague and underinclusive example? Is the purpose of this CMP pillar to find the “truth” on repayment liabilities, or is it to help clear the path for quicker CMS’ repayment by effectively deterring and limiting disputes—regardless of the substantive validity—by punishing the timing of RRE assertions or implications—whether or not contradictory?

Plant the seeds. Be proactive. Create winning compliance strategies in line with best claims handling procedures and business judgment rule.


About Flagship Services Group

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.

Disclaimer: This publication is provided for informational purposes only.  It is not intended to constitute, and shall not be construed as, the rendering of legal, accounting, or business advice or opinion or professional services of any type.  Nothing herein constitutes the views of the firm or its clients or the endorsement of any particular case, principle, or proposition.  The contents of this publication should not be viewed as a substitute for the guidance, advice, or recommendations of a retained professional.

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