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Where are we with CMS’s Section 111 penalty and future medicals proposals?

By Mark Popolizio  |  January 7, 2020

With 2020 quickly settling in, attention will likely focus back on the Centers for Medicare and Medicaid Services’ (CMS) widely anticipated release of its Section 111 civil money penalties (CMPs) and future medicals (LMSA) proposals. Both sets of proposals were originally slated for release at various points in 2019 but delayed each time.

As we enter 2020, the author provides the following overview of where we are regarding CMS’s forthcoming proposals:

Section 111 Civil Money Penalties

Projected release date: December 2019

Status: Not released in December 2019 (still pending)

CMS’s Notice of Proposed Rulemaking (NPRM) for Section 111 CMPs was scheduled for release in December 2019 according to a recent notice from the Office of Information and Regulatory Affairs (OIRA). However, as of the date of this article, these proposals have not been issued. Of note, OIRA’s notice indicates that this matter is “pending review” which means that CMS has completed drafting its proposed CMPs and they are now being reviewed by the Office of Management and Budget (OMB) per standard protocol.[1]

At this point, it is unknown when CMS’s CMP proposals will be released, or if their projected release date will be extended again. Likewise, it is unknown exactly which areas CMS intends to focus on concerning the imposing potential CMPs and how the penalties will be enforced, as well as what the agency will propose in terms of establishing required compliance “safe harbors.”[2]

Future Medicals (LMSA) Proposals

Projected release date: February 2020

Status: Pending

CMS’s projected release of its “future medicals” Notice of Proposed Rulemaking (NPRM) proposals is now February 2020 per a recent update notice issued by the OIRA. 

It is widely anticipated that CMS’s forthcoming proposals will focus heavily on the “future medicals” issue concerning liability claims (i.e. liability Medicare set-asides). Our recent article Liability Medicare Set-Asides – Bracing for the Storm provides an informative overview of the LMSA issue over the past several years to its current state, including a review of three key areas of focus regarding the “future medicals” issue in relation to liability claims.

Going Forward

ISO Claims Partners continues to closely monitor developments on both the Section 111 CMP and future medicals fronts and will provide future updates as warranted. In the interim, please do not hesitate to contact the author if you have any questions or would like to set up a more general call to discuss these issues.

Did you miss our “Medicare in Review” webinar?

No worries if you missed our Medicare Year in Review webinar – listen on-demand here!

In this session, Sid Wong and I wrapped up all the key developments (including things that may have slipped under your radar) and discuss how they affect your business going into 2020.

Covered topics include:

  • Section 111 updates
  • impact of new WCRC and CRC policies
  • increasing conditional payment and U.S Treasury Department demands
  • navigating new WCMSA policies
  • sorting out the latest on LMSAs
  • “double damage” rights for MAPs
  • key 2019 court decisions
  • keeping an eye on the other “M”—Medicaid 
  • looking ahead to 2020

[1] This information was provided to the author by the Office of Management and Budget (OMB) per his call with the agency on 9/24/19 about the OIRA September notice.

[2] In terms of Section 111’s penalty itself, the statutory authority establishing CMS’s right to impose CMPs is codified at 42 U.S.C. 1395y(b)(8)(E)(i) which states as follows:

An applicable plan that fails to comply with the [Section 111 reporting] requirements … may be subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant … A civil money penalty under this clause shall be in addition to any other penalties prescribed by law and in addition to any Medicare secondary payer claim under this subchapter with respect to an individual. (Emphasis Added).

To effectuate this provision, CMS is tasked with “specifying practices for which sanctions will and will not be imposed under subparagraph (E), including not imposing sanctions for good faith efforts to identify a beneficiary pursuant to this paragraph under an applicable entity responsible for reporting information.” 42 U.S.C. 1395y(b)(8)(I).  

Mark Popolizio, J.D., is vice president of MSP compliance and policy at ISO Claims Partners, a Verisk business. You can contact Mark at