CMS Delays Final Regulations on Civil Penalties for Violations of MSP Reporting Requirements

The Centers for Medicare & Medicaid Services (CMS) has pushed back the deadline by one year for issuing final regulations concerning the imposition of civil penalties for violations of Medicare Secondary Payer (MSP) reporting requirements.

Responsible reporting entities (RREs) for group health plans, typically insurers or third-party administrators, must report certain information to CMS about individuals with Medicare and group health care plan coverage. This information helps CMS determine whether the individuals’ group healthcare plan coverage is primary or secondary to Medicare. Under the Medicare statute, RREs can face civil monetary penalties of $1,000 per day for failure to comply with these MSP reporting requirements.

Although few employers are RREs, employers that sponsor group health plans may need to assist RREs in MSP reporting. As a result, employers and RREs should be aware of MSP reporting requirements and the potential penalties for failing to meet those requirements. To that end, CMS recently issued a chart highlighting the most common MSP reporting errors for the latter half of 2022.

In February 2020, CMS issued proposed regulations concerning what MSP reporting requirement violations would warrant civil penalties and how it would calculate the amount of those penalties. CMS had three years to finalize the proposed regulations under its self-imposed timeline.

CMS cites delays resulting from the COVID-19 public health emergency as one reason for extending the deadline to February 18, 2024, for issuing the final regulations. CMS has stated that the extension is necessary because public listening sessions concerning the proposed rule have raised additional concerns that merit further research. CMS wishes to better understand the economic impact of the proposed rule by engaging in additional analysis and predictive modeling based on current reporting data and the penalties that the final rule would impose.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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