CMS’ Civil Monetary Penalty Webinar: Highlights and Takeaways
CMS opened 2026 with additional clarity on the Civil Money Penalty (CMP) enforcement timeline during its January 15th webinar, offering important operational details for Responsible Reporting Entities (RREs) preparing for the first audits under the Section 111 Final Rule. While much of the rule’s framework has already been published, CMS used this session to reinforce expectations, outline milestone dates, and highlight critical administrative steps that RREs should take now.
The agency confirmed that the first CMP audit cycle is imminent and clarified timing nuances between NGHP, GHP, and Workers’ Compensation (WC) reporting—particularly given last year’s addition of the WCMSA‑related fields. CMS also reiterated the importance of accurate profile information to ensure notices reach the correct parties and encouraged the use of the safe harbor provision when SSNs cannot be obtained despite good‑faith attempts.
Highlights and Takeaways:
First CMP audit starts in February 2026
CMS will begin its initial review of 250 randomly selected accepted records from NGHP and GHP submissions for Q4 2025, limited to post–October 11, 2025 records.
Penalty pre‑notices coming in March 2026
If suspected non‑compliance is identified, CMS expects to issue the first informal notices (pre‑determinations) beginning in March.
Workers’ Compensation claims exempt from audit until July 2026
To accommodate the significant WCMSA reporting updates implemented in April 2025, CMS will not review WC records for CMP applicability until July 2026—the earliest date a WC record could be considered late.
Update your Section 111 profile report now
The Authorized Representative will receive all CMP correspondence, with a copy to the Account Manager. Reporting agents do not receive CMP notices. RREs should verify contacts and addresses via the EDI Representative or secure site to avoid missing critical communications.
GHP vs. NGHP audit ratios will vary widely
CMS emphasized that because reporting volumes fluctuate significantly quarter‑to‑quarter, it will not provide advance estimates of the proportional split between GHP and NGHP records in each audit cycle.
Use the Social Security Number safe harbor when applicable
When an SSN cannot be obtained, RREs should rely on the safe harbor provisions: three documented attempts (two in writing) made to both the beneficiary and their attorney unless written refusal is received. Proper documentation preserves compliance and protects against CMP exposure.
Bottom Line
The CMP enforcement era is now officially underway. With the first audit beginning in February and informal notices expected as early as March, RREs should use this window to validate reporting processes, tighten internal timelines, confirm beneficiary‑information workflows, and ensure all contact details in your profile report are accurate.
Contact us today for more information on how Allan Koba Compliance Solutions can help you avoid penalty as well as our new indemnification suite for Section 111 Mandatory Insurer Reporting services.
CMS Releases Updated Section 111 NGHP User Guide ahead of CMP Webinar
To start 2026, CMS released Version 8.3 of the MMSEA Section 111 NGHP User Guide just five days into the year. Although not a voluminous overhaul, this update delivers several key clarifications and reminders that Responsible Reporting Entities should review carefully.
What’s New in Version 8.3?
Medicare Query Result Clarification (Chapters I, II & IV)
CMS added explicit language emphasizing that the most current Medicare ID will be returned in both Query Response and Claim Response files when a beneficiary match is found.
$750 Threshold Retained (Chapter III)
CMS is continuing the $750 threshold for no-fault claims without ongoing responsibility for medicals. This marks the tenth consecutive year the threshold remains unchanged.
File Submission and Response Updates (Chapter IV)
Additional verbiage has been added in the technical chapter – Chapters IV (subsections 3, 7, and 8.1) to help clarify how updated beneficiary information is provided via response files, aiming to reduce confusion and ensure consistent reporting.
Why This Matters
Precision in Medicare ID: Ensuring most current Medicare IDs helps prevent record mismatches and improves the accuracy of your Section 111 reporting. Determining whether a claim triggers a Section 11 reporting obligation begins with a determination of Medicare eligibility.
Threshold consistency: Maintaining the $750 benchmark helps RREs avoid surprises and supports stable internal processes.
CMS has announced a webinar on CMPs related to NGHP reporting on January 15, 2026 at 1 PM EST. It’s a valuable opportunity to hear directly from CMS about enforcement expectations. While the webinar announcement (here – https://www.cms.gov/files/document/december-8-2025-nghp-cmp-webinar-announcement.pdf) indicates the subject matter will include reminders about the Final Rule governing Civil Monetary Penalties and the auditing process, there will also be a Q&A session which always proves to beneficial for attendees.
Takeaway:
The updated User Guide and the webinar announcement serve as a reminder that the period in which claims may be audited for Civil Monetary Penalties has begun and that now is the best time to review your Section 111 Reporting program and ensure total compliance. Make your 2026 resolution to stay CMP free.
Contact us today for more information on how Allan Koba Compliance Solutions can help you avoid penalty as well as our new indemnification suite for Section 111 Mandatory Insurer Reporting services.
Important NGHP Section 111 Guide Updates & How to Ensure Full Compliance
CMS has released an updated version of the NGHP Section 111 User Guide, introducing critical clarifications and new requirements that impact reporting. Staying ahead of these changes is essential to avoid compliance risks and potential penalties.
Below is a summary of the most significant updates that require your immediate attention.
Key Highlights from the Latest NGHP User Guide:
Complex Settlement Reporting (Ch. 3): New, detailed guidance clarifies how to report a single settlement (TPOC) or Medicare Set-Aside (MSA) that resolves multiple claims with different Dates of Incident (DOI). You must now report the earliest DOI and include all diagnosis codes, a significant shift in reporting practice.
New Data Requirement (Ch. 5): Submitting a Recovery Agent Tax Identification Number (TIN) is now mandatory if a Recovery Agent Name is provided. This requires immediate action to collect TINs from all relevant partners.
Technical Changes: Updates include corrected response file timelines and new unsolicited response reason codes coming in April 2026.
Navigate These Changes with Confidence Using KAboodle
These updates add new layers of complexity to an already challenging compliance process. Manual tracking and reporting increase the risk of errors that could lead to Civil Monetary Penalties (CMPs) from CMS.
This is where KAboodle, our proprietary SaaS compliance platform, becomes your most valuable asset. KAboodle is engineered to automatically adapt to these regulatory changes, ensuring your reporting is always accurate and up-to-date.
Guided Workflows: KAboodle simplifies complex scenarios, like multi-incident settlements, ensuring you apply the new CMS rules correctly every time.
Data Integrity Checks: Our system enforces new requirements, like the Recovery Agent TIN field, preventing errors before submission.
Audit-Ready Trail: Maintain a complete and organized record of all your reporting activities.
Go Beyond Software: Gain Full Indemnification
Technology is powerful, but peace of mind is priceless. That’s why Allan Koba Compliance Solutions offers full indemnification from Civil Monetary Penalties for any settlement reported through our KAboodle platform and managed by our team.
When you partner with us, you’re not just buying software—you’re transferring your compliance risk. We stand behind our work with a guarantee that protects your organization.
Next Steps
Don’t let evolving regulations become a liability.
Review the new CMS guide using the link above.
Schedule a brief 15-minute call with our experts to discuss how these changes specifically impact your operations.
Discover KAboodle and learn how our technology and indemnification guarantee can safeguard your organization.
Thank you for your trust in Allan Koba Compliance Solutions.
Updates Abound in 2025 With New WCMSA Reference Guide Version 4.3
Already off to a hot year in WCMSA updates, CMS kicks off Q2 with another round of new information for the Medicare Secondary Payer community. Workers’ Compensation Medicare Set-Aside Reference Guide Version 4.3 published April 7, 2025 serves up the awaited language associated with the Amended Review timeframe elimination, as well as a Change of Submitter of Record process and a Notice of Settlement Received letter template. A summary of the changes are as follows:
Section 16.3: Amended Review
Eligibility: Allows a one-time request for re-review if CMS has issued a conditional approval/approved amount, the case has not settled, and projected care changes result in at least a 10% or $10,000 difference in the approved amount.
Submission Requirements: New cover letter, all medical documentation since the last submission, most recent six months of pharmacy records, consent to release information, and summary of expected future care.
Justification: Identify care already provided or no longer required, and add new required care items.
Update: One year wait period eliminated.
Section 19.4: Change of Submitter
Process: If the submitter changes, the new submitter must provide a signed statement from the previous submitter authorizing the change. This ensures continuity and proper handling of the WCMSA proposal.
Requirements: The new submitter must comply with all CMS guidelines and provide necessary documentation to support the change.
Update: A change of submitter as a standalone change does not warrant Amended Review.
Appendix 5: Notice of Settlement Received Letter
Purpose: This letter is sent to notify the Beneficiary that CMS has received the settlement information. It includes details about the settlement and instructions for any further actions required.
Content: The letter outlines the settlement terms, the WCMSA amount, and administration information.
Update: New letter supports WCMSA data field inclusion in Section 111 reporting, providing the Beneficiary with information relevant to obligations and coordination of benefits, including a Case Control Number, if an MSA was not previously submitted to CMS for approval.
The Centers for Medicare & Medicaid Services (CMS) has released the latest version of the WCMSA Reference Guide. Effective July 17, 2025, CMS will no longer accept or review WCMSA proposals with a zero-dollar ($0) allocation. Entities must now consider specific parameters to determine if a $0 WCMSA allocation is appropriate and maintain documentation to support that allocation.
Key Criteria Outlined in Section 4.2
Section 4.2 of the Reference Guide now specifies when submission of WCMSA is not necessary because Medicare’s interests are already protected. In the past, these situations required the submission of a $0 MSA to CMS for approval, whenever said claim had met submission thresholds. This update now establishes the requirements for when a $0 MSA is appropriate, or more directly when no future medical set-aside amount is needed. These conditions include:
No Future Treatments Required: The treating physician documents that the individual will no longer require any treatments or medications related to the WC injury or illness.
Claim Denial: The workers’ compensation insurer or self-insured employer denied responsibility for benefits, made no payments for medical treatment or indemnity (except for investigational purposes), and the settlement does not allocate amounts for specific future or past medical services.
Court Ruling: A competent court or commission has ruled that the insurer or employer does not owe any additional medical or indemnity benefits, and the settlement does not allocate amounts for specific future medical services.
Statutory Denial: The workers’ compensation claim was denied within the state statutory timeframe allowed for investigation, and the settlement does not allocate amounts for specific future medical services.
Additional Changes to the Reference Guide
The updated WCMSA Reference Guide also includes changes to the instructions and criteria for evaluating WCMSA proposals, aiming to enhance the consistency and transparency of the decision-making process (Section 9.4.3). Additionally, CMS has corrected the example calculations for Intrathecal Pump, Spinal Cord Stimulator, and Peripheral Nerve Stimulator replacements to more accurately reflect how reviewers will establish related cost projections (Section 9.4.5).
Key Takeaways Moving Forward
At Allan Koba Compliance Solutions, we see several benefits from these changes:
Streamlined Process: The removal of CMS review of $0 WCMSAs simplifies and accelerates the settlement process, reducing the time and steps needed to ensure Medicare’s interests are properly taken into account. Providing the settling parties greater overall control of the settlement process.
Enhanced Documentation: An emphasis on thorough medical and claim-related documentation will be needed to ensure that all necessary records are accurate and detailed. This will provide comprehensive evidence to support the decision that no future set-aside is needed and that a $0 MSA is appropriate.
How We Can Help
Navigating the latest CMS updates on $0 MSAs can be complex, but Allan Koba Compliance Solutions is here to simplify the process. Our expertise ensures the accuracy of WCMSA submissions when needed and the compliance of your settlements, to ensure peace of mind for the future. Trust us to guide you through these changes with confidence and precision. Stay tuned for more updates related to the WCMSA submission process and feel free to reach out at any time with your MSP compliance questions.
Updated NGHP User Guide Outlines New Warning Flag for Open ORM Claims
On October 7th, CMS released Version 7.7 of the MMSEA NGHP User Guide with a few key updates. This iteration adds additional information regarding the steps needed and the emails that are issued during RRE registration, specifically Ch. 1 Table 7-1, Ch. 2 Table 6-4, and Ch. 4 Table 12-1. In general, these tables provide an easy-to-read overview of the registration process from TIN input, to PIN verification, and RRE vetting. Version 7.7 also adds some clarity to the reporting of wrongful death claims. Ch. 3 has added a note indicating –
“Settlements, judgments, awards, or other payments obtained entirely under the wrongful death theory of liability, which do not claim and release medicals, or have the effect of releasing medicals, are not required to be reported because Medicare would have no recovery claim against such a payment.”
However, the headline for this update is that CMS has added a warning flag for late reporting of claims reflecting open ORM. Chapters 4 and 5 both note that waring flag 04 has been added. This warning flag will be applied to claim response files with open ORM records, when the later date of either the CMS Date of Incident on the claim record, or the Part A Add Date is greater than 135 calendar days from the Start Date of the RRE’s submission period. Said differently, warning flag 04 will be applied to claims with open ORM that are reported more than 135 days after the DOI (or after the first date of entitlement for claims in which ORM was open prior to Medicare eligibility).
Prior to this release, CMS did not have a mechanism for providing RREs with a response warning indicating potential late reporting for claims with open ORM. In the past, RREs would receive a compliance flag (now called “warning flags”) for reporting a TPOC Date or an ORM termination date more than 135 days after its occurrence. This new warning flag provides RREs with an indication that the report, while accepted and reflecting ORM, was submitted more than 135 days after its occurrence.
As a reminder, the period for claims that may be assessed a civil monetary penalty begins in just a few days, and while an NGHP record must be more than 365 days late in order to be possibly subject to penalty, these warning flags serve as a reminder that if reporting is delayed, you put yourself at risk for CMP. As a best practice, RREs should ensure that they are reporting all claims that meet all applicable reporting thresholds error free and in a timely manner. In order to help ensure that you mitigate risk, and identify problem areas, an internal diagnostic review can be an invaluable tool. Through a review of your policies and procedures, your reporting system logic, and through a selection of claims, RREs are able to identify problem areas that may expose them to penalties or downstream liabilities if not addressed. This could include, but is certainly not limited to, late collection of query information or false negative query results, inaccurate diagnostic coding, late or improper entry of ORM, ORM term, and/or TPOC information, as well as system issues preventing proper reporting or failing to alert your team members to issues that need to be resolved.
For question, concerns, and comments about the recent User Guide updates, designing a diagnostic review, as well as general inquiries about Section 111 Reporting compliance please contact us at info@allankoba.com.
CMS Announces Updates to Section 111 COBSW Portal
On August 8th, CMS issued an alert confirming that COBSW system updates are coming soon. The Section 111 Coordination of Benefits Secure Website (COBSW) provides general information on Section 111 reporting, links and instructions, reference materials including various user guides, as well as a secure portal which provides the ability to manage your RREs, run Medicare entitlement queries, perform DDE reporting, and obtain query and claim response files. The upgrades, scheduled for September 7th, do not include any material changes to the COBSW. However, CMS states that these upgrades aim to enhance the end user experience across the site. This alert indicates that the layout and overall look of the portal will be updated. Further, an updated NGHP User Guide is anticipated to be released along with this upgrade.
This update serves as a reminder to ensure that you are familiar with the use of the COBSW and the assistance that it can offer in ensuring that your Section 111 Mandatory Insurer Reporting program is in compliance with all available guidance. As a reminder, the period for possible assessment of Civil Monetary Penalties for noncompliance begins this October.
For question, concerns, and comments about the COBSW and the coming upgrades, as well as general inquiries about Section 111 Reporting compliance please contact us at info@allankoba.com.
CMS Releases NGHP Section 111 User Guide Version 7.4
CMS has released its first version of the Non-Group Health Plan Section 111 Reporting User Guide of 2024. Not long after a recent informational webinar regarding Civil Monetary Penalties held on January 18, CMS released version 7.4 of the User Guide, in which the primary update is the addition of Ch. III, sect. 5.1 – Civil Monetary Penalties. This addition does not contain any surprise details that were not a part of the informational webinar, or prior communications regarding CMPs, but rather provides a general overview of what may subject an RRE to penalties, when, and how, as well as a description of CMS’ audit methodology. The full update can be found here – https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting/user-guide. However, a brief summary of the additions outlined in section 5.1 are:
RREs that fail to comply with the Section 111 reporting requirements may be subject to a CMP of up to $1000 (adjusted for inflation) for each day of noncompliance.
The regulations outlining this authority are effective as of 12/11/2023 and will be applied to RREs beginning 10/11/2024.
CMS will select a randomized sample of 250 new MSP ‘occurrences’ each quarter and audit these occurrences to determine whether RREs have complied with the reporting requirements.
RREs must report within one year of the date of incident, when ongoing responsibility for medicals (ORM) is assumed; or within one year of the TPOC date to be considered compliant.
The occurrences to be audited will include both Section 111 submissions and records from sources outside of the Section 111 reporting process, to ensure that CMS does not miss those situations where an RRE has entirely failed to report the occurrence.
RREs will only be informed when there is a potential instance of non-compliance.
RREs will be notified of potential non-compliance by CMS and afforded the opportunity to present information that demonstrates that the RRE was actually compliant.
Of note, CMS indicates that the information relevant to respond to, or otherwise defend against, a potential CMP will vary, but may not include situations where the RRE submitted records that CMS was unable to process due to errors in the claim input file. Directly in line with this, last week, CMS also released the top ten reporting errors received by NHGP RREs between July 2023 – December 2023. A snapshot of the top ten is:
The top three errors here include reporting under an invalid TIN or office code, reporting an invalid ICD code 1, and reporting erroneous ‘delete’ records. While RREs should ensure that their entire claim input file is accurate and error-free to ensure the record is accepted and you avoid CMPs, fields including ICD codes, ORM, and TPOC information are also of particular interest as they can have a direct impact on your conditional payment resolution process.
Given the information that we know about future CMPs and the start date of October 2024, now is as good of a time as any to ensure that your Section 111 Reporting program is fully compliant and ORM and TPOC occurrences are being reported in a timely manner. An internal review of your current reporting processes to diagnose any shortcomings is a great place to start. For questions about these updates, as well as general inquiries about Section 111 Reporting please contact us at info@allankoba.com.
NGHP Section 111 Reporting CMS Webinar on Civil Monetary Penalties
CMS hosted a live webinar on January 18th at 1pm EST. This webinar provided valuable information for responsible reporting entities (RREs) as the industry prepares for CMS to begin quarterly compliance audits and the imposition of civil monetary penalties. Please find the highlights of the webinar below and if you have further questions about your Section 111 reporting program and what you can do now to get ready for CMS audits, please reach out to info@allankoba.com and we can assist. Our Section 111 Reporting audit team is ready to help RREs ensure proper reporting and avoid civil monetary penalties.
Highlights and Key Takeaways:
Key Dates:
October 11, 2025: Compliance review period begins.
April 1, 2026: CMS will begin compliance audits.
CMS confirmed that the civil monetary penalty (CMP) rulemaking is prospective in nature. There will be no retroactive enforcement per CMS.
The CMP rulemaking does not change any existing reporting requirements and RREs are reminded to ensure full compliance today and in the future.
All technical reporting questions should be submitted to your EDI representative. This information can be found on the RRE Profile Report.
A random sample of 250 new records per quarter will be audited/reviewed by CMS beginning in the first quarter of 2026.
Records will include self-reported records outside of the Section 111 reporting data. CMS will cross-reference other data that they have access to in order to ensure they are also auditing RREs that have failed to report claims via Section 111 rules.
Definitions provided by CMS of Key Terms:
Audit: The process by which CMS will randomly select 250 records for review to determine if they were submitted timely and, if not, if they are ripe for a CMP.
Record: Any individual occurrence of a TPOC or ORM for a Medicare beneficiary that must be reported to CMS. If a particular case has both an ORM and a TPOC component, this will constitute two records.
Instance: When referring to instances of noncompliance, any situation, discovered through the audit process, that could result in a CMP as a result of untimely submission of a record.
ORM: Ongoing Responsibility of Medicals; RRE’s responsibility to pay, on an ongoing basis, for a Medicare beneficiary’s medical case associated with a claim.
Other Operative Dates: When referring to prospectivity of the rule, other operative dates would be things like “funding delayed beyond TPOC” date.
TPOC: Total Payment Obligation to Claimant; Dollar amount of a settlement, judgment, award, or other payment in addition to, or distinct from, ORM; generally, a one-time lump-sum amount to an injured party to resolve a payment obligation.
TPOC Compliant Reporting MUST occur within 1 year (365 calendar days) of the settlement date reported in Field 80 or the Funding Beyond TPOC Date reported in Field 82, whichever is later.
ORM Compliant Reporting MUST occur within 1 year (365 calendar days) of the MSP effective Date and ORM selected as Yes.
Note: A record must be reported AND accepted for it to meet the requirement for timeliness.
Audit Process:
CMS will make all substantive decisions on CMPs.
Informal Notice Process:
Notice letter is emailed to Authorized Representative and cc to Account Manager
30 calendar days to provide mitigating factors
Formal Notice Process:
Sent via Certified Mail to the Authorized Representative
Formal regulatory appeals process applies
Safe Harbors per CMS’s Presentation:
A CMP will NOT be imposed when:
Noncompliance is beyond the RRE’s control.
(Ex.- Existing policy timeframes for a claimant to report an incident.)
ORM is in dispute (with evidence supporting a late report).
CMS changes the reporting requirements and/or process without adequate notice (minimum 6• month advance notice).
Documented Evidence of a Beneficiary’s failure to provide SSN/HICN must include the following:
Once in writing (email is acceptable)
Once by mail (Email is not acceptable; Certified Mail is acceptable)
Once by phone or any other reasonable method
Tiered Calculation Approach for CMPs:
Timeframe
Penalty Amount per Day per NGHP Record
> 1 year but < 2 years
$250
> 2 years but < 3 years
$500
> 3 years
$1,000
Total Penalty for any 1 instance of noncompliance = NTE $365,000
Maximum Penalty Clarified:
There is a maximum penalty of $365,000 per instance/record and this is subject to inflation adjustments by regulation annually.
This is not a per RRE cap.
Current 2024 Inflation Adjusted Rates:
$1,000/day = $1,428/day or a max penalty of $521,220
$500/day = $714/day
$250/day = $357/day
Statute of Limitations:
5 years, as codified in 28 USC 2462
What’s Next:
CMS indicated that they will be promulgating an updated user guide in the near future which will contain specifics related to the CMP process.
CMS Announces Webinar Regarding Changes to Section 111 Reporting
CMS has announced that it will be hosting a webinar on November 13th, 2023, regarding a coming expansion to Section 111 reporting. Specifically, the announcement indicates that expansion will involve expanding TPOC reporting to include WCMSA information. The webinar will include a presentation by CMS providing general information and timelines, and should also permit for Q&A.
Separately, on Tuesday, October 17th CMS published the annual list of valid ICD-10 and ICD-9 codes for Section 111 reporting, including the excluded liability and no-fault codes for 2024. The full lists of codes, broken down by valid and excluded, can be found here – ICD Code Lists | CMS. For clarity, not all ICD-10 and ICD-9 codes are accepted for Section 111 reporting purposes. Some codes have been determined by CMS to be either not descriptive of injury (i.e., they describe a cause of an injury and not the injury itself), or they have been determined to not provide enough detail related to the nature of an injury in order to be complete, useful, and adequate for Section 111. These annual lists are crucial to ensure that you are only reporting accepted codes via your Section 111 reporting program.
For questions about these updates, as well as general inquiries about Section 111 reporting and all things Medicare Secondary Payer, please contact us at info@allankoba.com.
