CMS Section 111 Reporting: Requirements, Penalties, and Compliance Guide 2026

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This guide breaks down all core requirements, penalties for non-compliance, and actionable best practices for Responsible Reporting Entities (RREs) including insurance carriers, self-insured businesses, and third-party administrators (TPAs).#

Table of Contents#

1. What Is CMS Section 111, and Who Must Comply?
2. Core Section 111 Reporting Requirements
3. Common Section 111 Reporting Exemptions
4. Non-Compliance Penalties for Section 111 Violations
5. Section 111 Compliance Best Practices
6. Frequently Asked Questions
7. References

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What Is CMS Section 111, and Who Must Comply?#

Section 111 mandates that non-group health payers report data on claims involving Medicare-eligible individuals to CMS, to support the agency's Coordination of Benefits (COB) program. The rule prevents Medicare from paying for medical services that should be covered by a liable third party, protecting the solvency of the Medicare Trust Fund.

RREs Required to Report:#

• All workers' compensation carriers and self-insured workers' comp programs
• Liability insurance carriers (including general liability, auto liability, and medical malpractice providers)
• No-fault insurance carriers (including personal injury protection (PIP) and medical pay (MedPay) providers)
• Self-insured businesses that pay claims directly rather than through an insurance carrier
• TPAs acting on behalf of any of the above entities

Reporting is required for all claims involving a claimant who is or may be eligible for Medicare, even if the claimant is under 65 (e.g., individuals with permanent disabilities, end-stage renal disease, or ALS).#

Core Section 111 Reporting Requirements#

RREs must submit all required data via CMS's secure COB Portal, following strict eligibility, timing, and data accuracy rules:

1. Claimant Eligibility Verification#

RREs must verify Medicare eligibility for every claimant using CMS's official Common Working File (CWF) database, regardless of the claimant's stated eligibility status. Self-reported eligibility from claimants is not accepted as proof of exemption, as many individuals under 65 qualify for Medicare but are unaware of their coverage.

2. Mandatory Reporting Categories#

There are two core report types required under Section 111:

Note: Effective April 4, 2025, CMS expanded TPOC reporting to include Workers' Compensation Medicare Set-Aside (WCMSA) data — including zero-dollar allocations — for all workers' compensation settlements involving Medicare beneficiaries. RREs must report seven additional data fields as part of TPOC submissions.

3. Required Data Points#

All submissions must include:

• Claimant full legal name, date of birth, Social Security Number, and Medicare Beneficiary Identifier (MBI)
• Date of injury/illness related to the claim
• Unique internal claim number
• ORM start/end dates (if applicable)
• Total TPOC amount and breakdown of medical vs. non-medical damages
• Policy number and coverage details
• WCMSA amount and coverage period (for workers' compensation TPOCs dated on or after April 4, 2025)

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Common Section 111 Reporting Exemptions#

CMS allows narrow exemptions from reporting for the following scenarios:

1. TPOC payments for no-fault claims below the annual CMS threshold (currently $750, updated every January)
2. Payments for non-medical damages only (e.g., pain and suffering, lost wages) with no allocated funds for current or future medical costs
3. Payments made by individual private payers who are not acting as a self-insured business or registered carrier (e.g., a driver paying out of pocket for a minor fender bender with no insurance involvement)
4. State-mandated first-party benefits explicitly excluded from reporting per CMS annual guidelines

Note: Exemptions are strictly interpreted. When in doubt, submit a report or consult a Section 111 compliance expert to avoid penalties.#

Non-Compliance Penalties for Section 111 Violations#

CMS published final CMP regulations in October 2023, effective October 11, 2024, with enforcement beginning October 11, 2025. Beginning January 2026, CMS conducts quarterly audits of 250 randomly selected records to identify non-compliance. Penalties are tiered based on the duration of non-compliance:

1. Civil Monetary Penalties (CMPs) for Late/Missing Reports#

RREs are subject to tiered penalties per instance of non-compliance, capped at $365,000 annually per instance:

For Group Health Plan (GHP) RREs, the penalty is $1,000 per day (2025 inflation-adjusted rate:$1,512) with no tiered structure, and CMS cannot adjust or limit GHP penalty amounts.

Example: An RRE's TPOC record is randomly selected for audit. The settlement occurred on February 5, 2025, but the RRE reported it on May 1, 2026 — 85 days past the 365-day deadline. The RRE would face a penalty of $250 per day x 85 days =$21,250 (as adjusted for inflation).

2. Safe Harbor for Unavailable Claimant Information#

RREs may qualify for a safe harbor defense against penalties when a claimant fails to provide information necessary to identify them as a Medicare beneficiary (e.g., Social Security Number). To qualify, RREs must:

• Make two attempts to obtain information from both the claimant and their attorney (by mail or email)
• Make one additional attempt to either party by phone, mail, or email
• Document all attempts with dates, methods, and responses

3. Secondary Financial Liabilities#

• CMS may recover the full amount of conditional payments Medicare made for the claimant directly from the RRE, even if that amount exceeds the total settlement paid to the claimant.
• RREs may face civil lawsuits from claimants if non-compliance leads to the claimant's Medicare benefits being reduced or denied.
• RREs who fail to meet reporting obligations may also face False Claims Act suits or administrative recovery efforts.

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Section 111 Compliance Best Practices#

Follow these steps to eliminate risk of non-compliance:

1. Formalize RRE accountability: If you work with a TPA, include explicit Section 111 compliance guarantees and indemnification clauses in your contract, as the RRE (your organization) is ultimately liable to CMS for errors.
2. Automate eligibility checks: Integrate CMS CWF query tools into your claims management system to automatically verify eligibility for every new claimant, regardless of age.
3. Build buffer time for reporting: Set internal deadlines 30 days before CMS's 365-day requirement to allow time to resolve data errors or missing claimant information.
4. Assign a dedicated compliance lead: Designate one staff member to oversee all Section 111 reporting, track CMS annual updates, and resolve portal error notices within 10 business days.
5. Conduct quarterly training: Train claims adjusters, legal teams, and finance staff on Section 111 rules, with annual refreshers to align with new CMS guidance.
6. Audit submissions quarterly: Cross-check all submitted reports against your active claims file to identify missing or inaccurate entries before CMS conducts its own audits.

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Frequently Asked Questions#

Q: Can I rely on a claimant's statement that they are not eligible for Medicare?#

A: No. CMS requires RREs to verify eligibility via the official CWF database, as self-reported status is often incomplete or incorrect.

Q: What happens if I submit a report with accidental errors?#

A: CMS does not impose penalties for good-faith errors corrected promptly. Submit a corrected report via the COB portal as soon as you identify the mistake.

Q: Do I need to report a claim that is still being disputed?#

A: You are only required to report once a final settlement, judgment, or ORM agreement is formalized. Pending disputed claims do not need to be submitted.#

References#

1. Centers for Medicare & Medicaid Services. (2026). Mandatory Insurer Reporting for Non-Group Health Plans (NGHP). Retrieved from https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting
2. Centers for Medicare & Medicaid Services. (2026). NGHP Civil Money Penalties. Retrieved from https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting-nghp/nghp-civil-money-penalties
3. Centers for Medicare & Medicaid Services. (2026). NGHP User Guide Version 8.4. Retrieved from https://www.cms.gov/medicare/coordination-benefits-recovery/mandatory-insurer-reporting/user-guide
4. Medicare, Medicaid, and SCHIP Extension Act of 2007, Pub. L. No. 110-173, Section 111, 42 U.S.C. Section 1395y(b).
5. Centers for Medicare & Medicaid Services. (2023). Medicare Program; Medicare Secondary Payer and Certain Civil Money Penalties. 88 Fed. Reg. 70494. Retrieved from https://www.federalregister.gov/documents/2023/10/11/2023-22282/medicare-program-medicare-secondary-payer-and-certain-civil-money-penalties