Clock Nears Midnight For Civil Monetary Penalties

The industry has speculated for years whether and when the Centers for Medicare & Medicaid Services (CMS) would seek to enforce civil monetary penalties (CMPs) that were provided for the in Medicare Secondary Payer Act (MSP). Now, we are almost there.

On Feb. 18, 2020, CMS published the proposed rule “Medicare Secondary Payer and Certain Civil Monetary Penalties.” It specifies how and when CMS would calculate and impose CMPs where group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their MSP reporting obligations.

The deadline to offer public comments to the rule was April 20, 2020. For our purposes here, let’s only discuss the proposed rule’s application to NGHP entities.

According to the Section 111 NGHP User Guide, Section 6.1, “Who Must Report,” as well as 42 USC 1395y(b)(8), the “applicable plan” is the NGHP RRE, and it defines “applicable plan” as the following laws, plans, or other arrangements: liability insurance (including self-insurance), no-fault insurance, and workers’ compensation law or plans.

In other words, all liability, no-fault, and workers’ compensation insurers/carriers and self-insured entities are subject to CMPs under this proposed rule.