CMS Cracks Down: New Reporting Penalties and Requirements for Workers’ Compensation Claims
By: Jeff Stinson
Since 2010, the Centers for Medicare and Medicaid Services (CMS) has required non-group health insurance plans, such as workers’ compensation insurance carriers, to report all claims involving Medicare beneficiaries where the amount of benefits paid exceeded $750.00. CMS required carriers report both the acceptance of medical responsibility on a claim and end of such responsibility, including settlement, within one year of the triggering event with no enforcement mechanism or penalty for failing to comply with this requirement.
However, on October 11, 2024, CMS began enforcing civil monetary penalties for the failure to report. These penalties may start to accrue if these reporting requirements from Section 111 are not met, with payments becoming due as of October 11, 2025.
The newly enforced penalties for failure to comply with CMS’s reporting requirements are severe: $250.00 per day for reporting that is 1-2 years late; $500.00 per day if the reporting is 2-3 years late; and $1,000.00 per day for anything reported later than 3 years after the triggering event (acceptance of medical, closure of medical or settlement.) These fines are adjusted annually for inflation and can be imposed per violation. Thus, if a carrier failed to report both the acceptance of a claim and the settlement of the claim, this would be considered two separate violations which could lead to the daily penalties doubling.
While this change is seen as drastic in the Medicare world, even bigger changes loom in 2025. Beginning April 4, 2025, CMS will impose additional Section 111 reporting requirements on workers’ compensation carriers. As of this date, carriers must report Medicare Set-Aside (MSA) data and information on all workers’ compensation claims involving Medicare beneficiaries, regardless of the settlement amount. CMS has indicated publicly that when it says “all,” it means “all,” and the reporting requirement, including claims where a formal MSA was not obtained or if CMS approval of the MSA was not pursued or obtained, includes MSAs not submitted for approval by CMS.
As of April 4, 2025, CMS will require carriers to submit seven pieces of data with the settlement of a claim involving a Medicare beneficiary: 1) the MSA amount; 2) the MSA period; 3) whether the MSA was funded with a lump sum or through a structure; 4) the initial or “seed” money paid; 5) the annual amounts paid (if an annuity is used); 6) the case control number; and 7) the name of the person (including the injured worker, if applicable) administering the MSA.
As of the publication of this article, there is no indication the penalties outlined above which attach to failure to timely report acceptance or settlement of a claim will also attach to failing to report settlement data as of April 4, 2025. However, CMS has now shown a willingness to impose penalties for failing to provide the requested information. Therefore, carriers should get in the habit of ensuring compliance with these new reporting requirements in the event penalties are enacted in the future.
It is important to note this new requirement does not change the existing threshold requirements for CMS’s review of MSAs. CMS will still review MSAs in claims involving a Medicare beneficiary where the total settlement amount is $25,000.00 or more or in claims involving a claimant who has a reasonable expectation of becoming a Medicare beneficiary within 30 months of settlement and the total settlement amount is $250,000.00 or more.
Attorney Contact Info
Jeff Stinson
jeff.stinson@swiftcurrie.com
404.888.6207