CMS Retains its $750 “Low Dollar” Threshold for 2026

By Mark Popolizio, J.D., Jeremy Farquhar

November 19, 2025 / 3 min read

The Centers for Medicare and Medicaid Services (CMS) has released its 2026 low dollar reporting and recovery thresholds via a new alert dated November 18, 2025.

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In this new alert, CMS has announced that it is retaining its current $750 low dollar reporting and recovery threshold for certain cases in 2026 as more fully described below as follows:

Background

By way of brief background, CMS is required to publish an annual low dollar threshold amount according to Section 202 of the Strengthening Medicare and Repaying Taxpayers (SMART) Act of 2012.^[1]In general, under this section, CMS is required to publish an annual single threshold amount below which Section 111 reporting and conditional payment recovery is inapplicable for certain settlements, judgments, awards, or other payments, along with supporting information on how CMS calculated this threshold.^[2]CMS is required to publish its low dollar threshold “not later than November 15^th before each year.”^[3]

CMS retains its $750 low dollar threshold for certain claims in 2026

CMS’s newly published alert is titled Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments. Of note, as of the time the authors drafted this article, CMS had not released any information regarding how it calculated its $750 threshold and made its decision to retain this low dollar threshold amount for 2026.

CMS outlines its “low dollar” threshold as follows:

As required by section 1862(b) of the Social Security Act, the Centers for Medicare and Medicaid Services (CMS) is required to review the costs related to collecting Medicare’s conditional payments and compared this to recovery amounts. Until further notice, the threshold for physical trauma-based liability insurance settlements will remain at $750. Until further notice, CMS will also maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibly for medicals.

This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation, or exposure claims.

It is noted that this is approximately the 10th year that CMS has retained its “low dollar” threshold at $750. Interestingly, this year, as noted above, CMS indicates that CMS plans to maintain this threshold amount “until further notice.”

Authors’ Comments

In reviewing the language above, careful attention should be paid to which cases CMS’s “low dollar” threshold applies, and to which cases the threshold does not apply. For example, CMS states this threshold does not apply to “liability insurance (including self-insurance) … settlements for alleged ingestion, implantation, or exposure cases.”^[4] Further, based on the above, this threshold would not apply in relation to no-fault or workers’ compensation claims in situations where the no-fault or workers’ compensation insurer has on-going responsibility for medicals (ORM).^[5]

Questions?

Please do not hesitate to contact the authors if you have any questions, or to learn how Verisk can help you address Section 111 reporting issues.

[1] Section 202 of the SMART Act is codified at 42 U.S.C. 1395y(b)(9).

In pertinent part, this section states:

(A) In general

Clause (ii) of paragraph (2)(B) and any reporting required by paragraph (8) shall not apply with respect to any settlement, judgment, award, or other payment by an applicable plan arising from liability insurance (including self-insurance) and from alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) constituting a total payment obligation to a claimant of not more than the single threshold amount calculated by the Secretary under subparagraph (B) for the year involved.

(B) Annual computation of threshold

(i) In general

Not later than November 15 before each year, the Secretary shall calculate and publish a single threshold amount for settlements, judgments, awards, or other payments for obligations arising from liability insurance (including self-insurance) and for alleged physical trauma-based incidents (excluding alleged ingestion, implantation, or exposure cases) subject to this section for that year. The annual single threshold amount for a year shall be set such that the estimated average amount to be credited to the Medicare trust funds of collections of conditional payments from such settlements, judgments, awards, or other payments arising from liability insurance (including self-insurance) and for such alleged incidents subject to this section shall equal the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and for such alleged incidents subject to this section for the year. At the time of calculating, but before publishing, the single threshold amount for 2014, the Secretary shall inform, and seek review of, the Comptroller General of the United States with regard to such amount.

(ii) Publication

The Secretary shall include, as part of such publication for a year--

(I) the estimated cost of collection incurred by the United States (including payments made to contractors) for a conditional payment arising from liability insurance (including self-insurance) and for such alleged incidents; and

(II) a summary of the methodology and data used by the Secretary in computing such threshold amount and such cost of collection.

For purposes of this paragraph and with respect to a settlement, judgment, award, or other payment not otherwise addressed in clause (ii) of paragraph (2)(B) that includes ongoing responsibility for medical payments (excluding settlements, judgments, awards, or other payments made by a workers’ compensation law or plan or no fault insurance), the amount utilized for calculation of the threshold described in subparagraph (A) shall include only the cumulative value of the medical payments made under this subchapter.

(D) Report to Congress

Not later than November 15 before each year, the Secretary shall submit to the Congress a report on the single threshold amount for settlements, judgments, awards, or other payments for conditional payment obligations arising from liability insurance (including self-insurance) and alleged incidents described in subparagraph (A) for that year and on the establishment and application of similar thresholds for such payments for conditional payment obligations arising from worker compensation cases and from no fault insurance cases subject to this section for the year. For each such report, the Secretary shall--

(i) calculate the threshold amount by using the methodology applicable to certain liability claims described in subparagraph (B); and

(ii) include a summary of the methodology and data used in calculating each threshold amount and the amount of estimated savings under this subchapter achieved by the Secretary implementing each such threshold.

[2] Id.

[3] 42 U.S.C. 1395y(b)(9)(B)(i).

[4] CMS Alert, Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments (November 18, 2025).

[5] CMS Alert, Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments (November 18, 2025).