The industry has been waiting for this NPRM because under the Strengthening Medicare and Repaying Taxpayers Act of 2012
(SMART Act), CMS was required to establish criteria and practices in which CMPs would be imposed under the Act. Through the
SMART Act, specifically Section 42 USC 1395y(b)(8), the imposition of CMPs of $1000 per day per claim for noncompliant RREs
was modified to provide that such CMPs would be “up to $1000 each day of noncompliance with respect to each claimant.”
In other words, the SMART Act allowed for CMPs to be discretionary rather than mandatory and capped penalties at $1000
per day per claim. To set parameters around CMS’ discretion for imposing a range of penalties CMS must develop safe harbors and
standards for RREs to determine when CMPs should be issued and the monetary amount of such CMP. Back in 2013, CMS issued
an Advanced Notice of Proposed Rulemaking (ANPRM) regarding these safe harbors, but for the past five years has taken no further
regulatory action until now.
It is anticipated that the NPRM will provide for safe harbors for RREs which can evidence
good faith efforts to report or report properly. However, in scenarios where RREs have failed
to either register as an RRE or report reportable claims, or scenarios in which there is improper
termination of Ongoing Responsibility for Medical (ORM), it is anticipated that the RRE will
likely be subject to CMPs. There is no indication at this time whether the CMPs will be issued
retroactively versus prospectively.
The NPRM is going to require a great deal of consideration
by the industry and by CMS to determine reasonable standards
for penalty scenarios. There are a large number of variables for
an RRE to successfully report: cooperation by the injured party,
a successful query result with CMS, and then the RRE has to
successfully populate 164 data fields regarding the claim in its
claim input file to CMS.
Essentially, the burden upon the RRE is great, and CMS
should consider all of these factors before sanctioning an RRE
with a CMP. However, as the standards for issuing Section 111
CMPs are unknown at this time, RREs should take proactive
steps now to effectuate compliance with Section 111 Reporting,
before CMPs are issued.