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CMS delays final rule of Civil Money Penalties

February 24, 2023 · Medicare Insights Team

On February 17, 2023, CMS announced a delay in the deadline for the final rule on Civil Money Penalties (CMP) from February 18, 2023 to February 18, 2024.

What is the final rule on CMP?

After a prolonged period of development, CMS proposed a CMP rule in 2020 that ties penalties to Medicare Secondary Payer reporting failures by responsible reporting entities (RREs). These penalties can cost RREs up to $1,000 per day.

The categories of errors that CMS intends to penalize include:

  • When RREs fail to register and report
  • When RREs report, but their errors exceed set tolerances
  • When RREs report data that conflicts with information previously communicated to CMS

Optum has previously covered this rule here and here for additional details.

Why did CMS delay the final rule?

Per the announcement on February 17, 2023, CMS indicated they needed an extension:

“We are not able to meet the initial targeted 3-year timeline for publication due to delays related to the need for additional, time-consuming data analysis resulting from public inquiry. It was not possible to conclude this data analysis on the initial, targeted timeline for the proposed rule because public listening sessions raised additional concerns that CMS believed were important to properly and thoroughly research prior to publishing the final rule. We have decided that it is critical to conduct additional analysis about the economic impact of the rule. We are preparing additional data analysis and predictive modeling to better understand the economic impact of the proposed rule across different insurer types. This data analysis is designed to review the actual current reporting and model potential penalties that would be imposed were the final rule in place.”

What does this mean for insurers/RREs with reporting requirements?

Before CMS publishes the final rule on CMPs, insurers and RREs should make sure their Section 111 reporting is accurate in order to avoid penalties. For now, the best way to guarantee compliance is to assume that the same principles noted in the proposed rule will end up in the final rule. This includes checking that claims are reported, correcting any reporting with errors, and updating claims as needed (for example, TPOC, ORM termination, and ICD codes).

It is possible that CMS will change elements of the proposed rule as it is unclear if the delay will result in substantive changes of the proposed rule with respect to the penalty amounts, categories of penalties, or other additions or edits. However, the best way to prepare is to act as though the final rule will reflect all or some of the core issues identified in the proposed rule.

Optum compliance solutions can help you avoid CMPs

Potential costly penalties and risks from these rules include:

  • Just one error on one claim could result in a CMP of $1,000 per day, up to $365,000 per year. Ten claims out of compliance for a year could result in CMP exposure of $3,650,000.
  • The potential risk of non-compliance with CMS’ Final Rule could be even higher.

Optum’s cost-effective Medicare Claim Management product holistically assesses and addresses MSP compliance needs at the individual claim level. This product will:

  • Help you comply with Section 111 reporting requirements, such as ICD codes, ORM, and TPOC
  • Provide recommendations to address conditional payments with Medicare, as well as Part C and D Plans
  • Identify and recommend additional opportunities for cost savings for future medical expenses
  • Provide documentation for the claim prior to settlement that includes the recommendation for an MSA and a review of proposed settlement language

Contact Optum for more information on Medicare Claim Management or to discuss how we can help with your Medicare Secondary Payer compliance needs to minimize risk.

For additional information on how Optum can help you with your Medicare Secondary Payer compliance needs and put you in the best situation to minimize your risk, please contact Michael Flower at or call at 813-627-2406.

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