5 Key Strategies to Strengthen Medicare Secondary Payer Compliance Through Effective Reporting Workflows

The Medicare Secondary Payer (“MSP”) statute plays a critical role in protecting the Medicare Trust Fund by ensuring that Medicare does not pay for medical expenses when another insurer or responsible entity has primary payment responsibility. Under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act, certain insurers and self-insured entities are required to report claim-related information to the Centers for Medicare & Medicaid Services (“CMS”) when they resolve claims involving Medicare beneficiaries. For non-group health plans (“NGHPs”), these reporting obligations apply in a wide range of contexts, including workers’ compensation claims, liability insurance settlements (including self-insurance), and no-fault insurance claims. CMS uses this reporting data to identify situations in which Medicare should be reimbursed for conditional payments or where future medical expenses may implicate Medicare’s interests.

Compliance with Section 111 reporting requirements is increasingly important as CMS continues to expand enforcement efforts and refine its reporting systems. NGHP responsible reporting entities (“RREs”) must timely and accurately submit required data regarding settlements, judgments, awards, and ongoing responsibility for medical payments involving Medicare beneficiaries. Failure to comply can expose insurers, third-party administrators, and self-insured organizations to significant financial risk. Under federal regulations, CMS may impose civil money penalties (“CMPs”) of up to $1,000 per day, per claim, for noncompliance with mandatory reporting obligations, particularly where an RRE fails to report, submits inaccurate information, or does not correct errors in a timely manner. As a result, organizations handling liability, no-fault, and workers’ compensation claims should maintain robust compliance procedures to minimize exposure and ensure adherence to MSP reporting requirements.

Data accuracy and well-defined processes are the foundation of effective Section 111 Reporting and CMP prevention. Sanderson Firm invests a significant amount of time supporting clients after compliance audits or during Section 111 Reporting implementation helping establish critical workflows that were previously overlooked.  Reliable reporting depends on structured processes that enable teams to consistently identify, review, and promptly resolve system issues, data mapping inconsistencies, validation errors, and other reporting red flags.

Below are the key areas we recommend reviewing:

1.      Implement Pre-Validation for CMS Hard-Level Errors

Organizations should ensure their reporting programs identify and pre-validate CMS hard-level errors before quarterly claim input files are submitted. This allows sufficient time to correct issues in advance, reducing the likelihood of file rejections, improving reporting accuracy, supporting timely submissions, and preventing avoidable reporting delays that could increase risk for CMPs.

2.      Claim System Functionality

Review the functionality of your claim system, including any filters used to identify claims for querying and reporting, to ensure they align with CMS reporting requirements. Poorly defined or improperly maintained filters can result in reportable claims being overlooked, leading to reporting gaps, missed submissions, and potential compliance risks. Effective filtering logic is essential to ensure claims are consistently identified, validated, and included in the appropriate reporting cycle.

3.      Operational Workflow

Review workflows to ensure claim-level query and validation errors are assigned to the appropriate users for correction. Organizations should evaluate whether users can dismiss notifications without resolving errors, as this can lead to missed reporting requirements. It is also important to confirm notifications are functioning properly and not repeatedly triggering after errors have been corrected, as excessive notifications can reduce user engagement with the process. Additionally, organizations should understand whether users have the ability to remove claims from querying or reporting and ensure appropriate controls are in place to prevent reporting gaps and mitigate compliance risks.

4.      Team Training

Organizations should conduct regular training to ensure users remain informed of MSP updates, evolving reporting requirements, and workflow expectations. Compliance teams should also be trained to make informed decisions regarding Ongoing Responsibility for Medical (ORM), ORM Termination, Total Payment Obligation to Claimant (TPOC), WCMSA fields, and diagnosis code reporting to ensure accurate reporting outcomes. Establishing documented Section 111 Best Practices can help promote consistency, improve reporting accuracy, and reduce compliance risks. It is also beneficial to partner with a vendor or compliance resource that can assist with training needs, answer reporting questions, and provide guidance as requirements continue to evolve.

5.      Regular Audits

Unfortunately, simply fixing validation errors is not enough to ensure you are accurately reporting to CMS. A key part of successful Section 111 reporting is regularly auditing your data, either internally or with the support of an outside vendor.

While obvious validation errors may be easy to identify, a deeper review should also be performed to identify reporting red flags, such as:

• Improper fields populated based on Plan Type and ORM Indicator

• ORM not being terminated when appropriate, leaving open CMS records unresolved

• Incorrect decimal placement on TPOC and MSA Amount fields

• WCMSA Amounts greater than TPOC Amounts and other data integrity issues with WCMSA fields

• Duration of unresolved query validation errors from the Created Date

• Duration of unresolved claim validation errors from the First Successful Query Match

• Claimants age 65+ returning a query “No-Match”

• Duplicate claim reporting

• No-Fault claims reported under Liability Plan Type

• Excessive ICD coding

These are common areas where discrepancies may not trigger a system error but can still indicate mapping issues, workflow gaps, and potential improper reporting.

At Sanderson Firm, we believe in full transparency and regular communication with our clients regarding the state of their data from implementation and throughout the life of the partnership. We partner with compliance teams to ensure reporting is regularly audited, training gaps are addressed, and action plans are implemented to correct data discrepancies and mapping issues, helping set our clients up for success.

If you have any questions about our Section 111 reporting solutions, audit services, or any other Section 111 compliance matters, please do not hesitate to contact us.