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Article | Insider

CMS issues final rules for assessing MSP reporting penalties

By Anu Gogna and Benjamin Lupin | October 26, 2023

Employer sponsors of group health plans should make sure Medicare Secondary Payer reports are being submitted on time to avoid potential penalties.
Benefits Administration and Outsourcing Solutions|Health and Benefits

CMS has finalized regulations on when civil money penalties will be imposed on group health plans for late Medicare Secondary Payer (MSP) reporting. The final rules take effect on December 11, 2023, but are not applicable until October 10, 2024.

Responsible reporting entities (RREs) — typically insurers or third-party administrators — must report information to the Centers for Medicare & Medicaid Services (CMS) about individuals who are both 1) entitled to Medicare and 2) covered under a group health plan. An employer that sponsors a self-insured, self-administered group health plan may also qualify as an RRE.[1]

The final regulations differ from the proposed regulations on several topics:

  • Reason for imposing penalties. Penalties will only be imposed for late reporting (and not also for inaccurate or contradictory reporting as had been proposed). For group health plans, the deadline is generally defined as reporting within one year after the date coverage becomes effective.
  • Audit methodology. Instead of automatically monitoring all submissions for compliance, CMS will randomly select and audit 250 RRE submissions each calendar quarter.
  • Penalty amount. The penalty for a late submission by a group health plan RRE is currently $1,325 per day of noncompliance (as of June 8, 2023). This amount is adjusted annually. Note: CMS has adopted a tiered penalty approach for non-group health plan RREs that could significantly lower the penalty amount, but it lacks statutory authority to extend that approach to group health plan RREs.

Employers sponsoring group health plans will have a year to review procedures with their RREs to make sure timely reports are being submitted to CMS and that RREs have procedures in place to avoid potential penalties. RREs will likely need to obtain from employers the information necessary to complete the reporting (e.g., employee and dependent social security numbers).


  1. For more background on MSP reporting, see “CMS issues proposed regulations for assessing MSP reporting penalties,” Insider, February 2020. Return to article

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