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Volume XIII, Number 158


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CMS Extends Timeline of Section 111 Civil Monetary Penalties Final Rule

On February 18, 2023, the Centers for Medicare and Medicaid Services (CMS) extended the timeline for publishing the Medicare Secondary Payer and Certain Civil Monetary Penalties final rule by one additional year, stating that it experienced “delays related to the need for additional, time-consuming data analysis.”


The Medicare Secondary Payer Act (MSPA), enacted in 1980, made Medicare a secondary payor to certain primary plans and created a statutory duty for liability insurers and self-insured entities to pay for Medicare beneficiaries’ healthcare services, where applicable, when Medicare is not the beneficiary’s primary health insurer. Along with the MSPA, Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements with respect to Medicare beneficiaries who have coverage under group health plan arrangements and Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance (including self-insurance), no-fault insurance or workers’ compensation, collectively referred to as non-group health plans. Section 111 also added provisions that allow CMS to impose civil monetary penalties against non-group health plans responsible reporting entities. Responsible reporting entities generally include non-group health plans and other insurers.

On February 18, 2020, CMS issued a proposed rule implementing civil monetary penalties for noncompliance with the MMSEA Section 111 reporting requirements. CMS was expected to complete and release its final rule within the standard three-year period for release, which ended in February 2023. However, on February 18, 2023, CMS extended the timeline for publishing the final rule by one additional year. CMS explained that it was unable to complete the time-consuming data analysis resulting from public inquiry because the public listening sessions raised additional concerns that required additional research prior to publishing a final rule. CMS would like to critically consider the economic impact of the proposed rule across different insurer types. CMS also noted that its focus on the COVID-19 public health emergency contributed to the delay in finalizing the proposed rule.

In the same vein, CMS withdrew a notice of proposed rulemaking related to the MSPA in October 2022. The proposed rule was expected to provide guidance on liability and obligations associated with future medical costs and Medicare Set-Asides (MSAs), including liability and no-fault MSAs. The notice of proposed rulemaking was initially announced in 2018, subsequently updated and later withdrawn. Given the complexities of liability/no-fault claims, many insurers anticipated CMS’s guidance on such MSA matters.


Despite the delayed rulemaking, there is no indication that the underlying civil monetary penalty statutory provisions will be amended. Therefore, civil monetary penalty final rules are anticipated in the future. Plans and responsible reporting entities should continue to implement systems and plans for compliance. CMS also continues to provide guidance on different components of the MSPA, including workers’ compensation MSAs; recovery thresholds for certain liability insurance; no-fault insurance; and workers’ compensation settlements, judgments, awards and other payments. Companies with reporting obligations should seek counsel on how to best meet the reporting guidelines and avoid potential future CMS liabilities.

© 2023 McDermott Will & EmeryNational Law Review, Volume XIII, Number 83

About this Author

Emily J. Cook, McDermott Will Emery Law Firm, Health Care Attorney

Emily J. Cook is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Los Angeles office.  She focuses her practice on Medicare provider certification, reimbursement and regulatory compliance.

Adetoro T. Olugbemi D.C. Health Care Attorney McDermott Will Emery

Adetoro T. Olugbemi is an Associate at McDermott Will Emery's D.C. office. Adetoro focuses her practice on regulatory compliance and due diligence for clients across the healthcare industry, including hospitals and health systems, pharmacies, ambulatory surgery centers, laboratories, digital health startups and others. Adetoro is particularly experienced helping clients navigate issues related to the Stark Law, the Anti-Kickback Statute, the Federal Civil Monetary penalty provisions and the False Claims Act. She is also well-versed in state-level regulatory compliance...