As of October 11, 2024, entities responsible for reporting settlements, judgments or awards for Medicare beneficiaries face new monetary penalties if they fail to timely report these resolutions, activating a new final rule from December 2023.
The Medicare, Medicaid and SCHIP Extension Act of 2007 set forth mandatory reporting requirements, stating that responsible reporting entities (RREs) must provide information on a quarterly basis of settlements, judgments, and awards to Medicare beneficiaries. This new final rule provides guidelines for imposing civil money penalties when resolutions are not timely reported.
The Centers for Medicare & Medicaid Services (CMS) will randomly audit 250 RRE submissions per quarter to determine if the submission complies with reporting requirements. For any submission not timely reported – defined as 1 year from the date a settlement, judgment or award was made or funded, if delayed – penalties apply. There are three tiers of penalties, each of which is adjusted annually under 45 CFR part 102:
- $250 for each calendar day of noncompliance, where the record was reported more than 1 year, but less than 2 years, after the required reporting date;
- $500 for each calendar day of noncompliance, where the record was reported more than 2 years, but less than 3 years, after the required reporting date; or
- $1000 for each calendar day of noncompliance, where the record was reported 3 years or more after the required reporting date.
There is, however, a cap to the penalties imposed for each individual instance of noncompliant reporting by an RRE of $365,000, which is also to be adjusted annually under 45 CFR part 102.
The rule has a limited provision that could allow the RRE to avoid penalties, specifically in the situation where the RRE documents its good faith efforts to obtain the necessary information for reporting but is unable to do so. The RRE must demonstrate that it has made a total of three attempts to obtain the required information either from the Medicare beneficiary or their counsel. Two of these attempts must be made either by mail or by e-mail. The third attempt may be made via telephone, e-mail or some other reasonable method, which is undefined. Additionally, if the Medicare beneficiary or their counsel is contacted but refuses to provide the information, no further attempts are needed, but the RRE must document and maintain a record of that refusal for a minimum of 5 years.
With the potential for steep penalties to be imposed for noncompliance, it is critical for RREs to quickly identify claimants who are Medicare beneficiaries; obtain the necessary reporting information; document all attempts to obtain this information, and retain evidence of any refusals to provide it; and timely finalize and report all resolutions.
Federal Register: Medicare Program; Medicare Secondary Payer and Certain Civil Money Penalties