New proposed regulation by the Centers for Medicare & Medicaid Services (CMS) pose significant financial risk for responsible reporting entities that fail to comply with reporting obligations under Medicare Secondary Payer (MSP) laws. As proposed, the new rule would impose steep penalties on MSP reporting violations that occur following the new rule’s effective date.
Background
In general, MSP laws (1) prevent Medicare from making primary payments to providers when a group health plan or non-group health plan is responsible to pay primary, and (2) find and recover payments that Medicare was not responsible to pay. Responsible reporting entities (RRE) are required to make a quarterly report to CMS on group health plan and non-group health plan coverage of Medicare beneficiaries.
Under current law, group health plans failing to comply with reporting requirements “shall” be subject to penalties of $1,000 per day for each day of non-compliance per person whose information should have been reported. Non-group health plans “may” be subject to financial penalties of up to $1,000 per day.
Proposed Rule
The proposed regulation by CMS implements the statutory penalties authorized by Congress; highlights of the proposed rulemaking include the following:
Basis for imposing civil monetary penalties. With limited exceptions, the proposed rule identifies three circumstances that can lead to the imposition of a civil monetary penalty:
- Failure to timely report any Medicare beneficiary record. For group health plans, the deadline to report is one year from the date of plan coverage or Medicare entitlement date, whichever is later. For non-group health plans, the deadline is within one year of an award, settlement, judgment, or other payment.
- Submission of quarterly MSP reports that exceed specific error tolerance thresholds in any four of eight reporting periods.
- Contradiction of prior reporting during the recovery process.
Amount of civil monetary penalties. The proposed rule provides for the following civil monetary penalties for noncompliance:
- Group health plans: $1,000 per day per person, up to a maximum penalty of $365,000 (adjusted over time for inflation).
- Non-group health plans: the per-day penalty is discretionary but would be capped at $1,000 per day per person, up to a maximum penalty of $365,000 (adjusted over time for inflation).
Statute of limitations. The proposed rule sets a statute of limitations of five years from the date that CMS discovers noncompliance.
Having a team like the experienced benefits counsel at Hall Benefits Law on your side means having someone you can call for clarification when human or data errors occur. We can help confirm what to do when these errors occur and make sure the problem and solution are clearly documented in case it is ever questioned. Call our team today at 678-439-6236.
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