Section 111 Updates: Thresholds for 2019, Proposed Changes

1.15.2019 Blog

On January 4, 2019, CMS released its updated Non-Group Health Plan User Guide Version 5.5 detailing changes made to Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007.  Section 111 of the MMSEA details the reporting requirements by Responsible Reporting Entities (RREs) to CMS regarding the potential recovery by Medicare to recoup payments made in cases where a primary payer existed.

The updated Guide also includes procedural updates necessary for uniform and improved resolution of cases.

TPOC reporting thresholds for 2019 remain the same

The total payment obligation to the claimant (TPOC) refers to payments made to a beneficiary intended to resolve, or partially resolve, a claim.  In the updated Guide, CMS described the 2019 thresholds for mandatory reporting.  There was no change from the 2018 reporting thresholds. In cases where a no-fault, workers’ compensation, or liability settlement in which the carrier does not have an ongoing responsibility of medical care (ORM), reporting is required if the total settlement amount exceeds $750.00.  For settlements below $750.00, no reporting is necessary and CMS will not pursue conditional payment recovery.  By reporting these cases to CMS, CMS is able to determine whether reimbursement is warranted for conditional payments made.

In considering the thresholds, CMS has taken into account the cost associated with recovery efforts offset by the recovery amount.  Pursuing recovery of claims below the $750.00 settlement threshold has been deemed financially inefficient for CMS, and therefore will not be required to be reported.

The updated Guide also included information regarding TPOC determinations.  If TPOC is determined after the settlement date, RREs are required to provide the actual or estimate data for TPOC funding.  Additionally, excluded ICD-9 and ICD-10 tables have been updated to match the excluded lists that are available through the Section 111 Mandatory Reporting Application (MRA) used for reporting data to CMS.  The update also explains that the Guide will only include version and revision histories from the last four releases, in an attempt to reduce the number of pages.

Notice of Proposed Rulemaking

Recently, CMS issued a Notice of Proposed Rulemaking with a priority level of “significant”, titled “Civil Money Penalties and Medicare Secondary Payer Reporting Requirements (CMS-6061-P)”.  The Notice states:

Section 516 of the Medicare Access and CHIP Reauthorization Act of 2015 amended the Social Security Act (the Act) by repealing certain duplicative Medicare Secondary Payer reporting requirements.  This rule would propose to remove obsolete Civil Money Penalty (CMP) regulations associated with this repeal.  The rule would also propose to replace those obsolete regulations by soliciting public comment on proposed criteria and practices for which CMPs would and would not be imposed under the Act, as amended by Section 203 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act).

This Notice indicates that CMS plans to solicit public comment on proposed criteria and practices for which civil money penalties would and would not be imposed under the Medicare Secondary Payer Act. Recall that the Act initially imposed a $1,000.00 per day, per claim penalty for non-compliance with reporting requirements under Section 111.  In January 2013, the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act) modified the previously-strict language of the penalties provisions and added a discretionary element to the imposition of those penalties.  The SMART Act required CMS to introduce regulations and guidance for when penalties would and would not be imposed soon after its enactment.  Shortly after, CMS issued a Notice of Proposed Rulemaking seeking public comments on the guidelines and criteria for penalties.  After comments were received, CMS paused action on the topic until now.  The Notice proposes a rule that would replace existing blanket reporting requirements with guidelines and criteria.

The Notice does not define any specific proposals or criteria.  Rather, it signals that CMS is gearing up to issue proposed rulings that will be open for public comment in anticipation of promulgating set criteria and rules later in the year.  As 2019 commences, we can expect significant changes and a focus on reporting requirements and penalties.  Our attorneys will be aware of any updates and changes to Section 111 issues and plan to disseminate any important information.


The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.