Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“Section 111”) contains mandatory reporting requirements for entities responsible for providing primary insurance to Medicare beneficiaries. These entities, referred to as responsible reporting entities (“RREs”) have an obligation to report information to the Centers for Medicare & Medicaid Services (“CMS”) about Medicare beneficiaries who receive monetary settlements or other payments. This reporting allows CMS to more effectively coordinate benefits, recover conditional payments and ensure that Medicare does not make payments for medical treatment when another entity is responsible for the claim.
Pursuant to the CMS Final Rule issued in October 2023, changes to Section 111 went into effect on October 11, 2025, that may result in the imposition of civil monetary penalties for RREs that fail to comply with Section 111’s reporting obligations. Although the obligation to report itself is not being modified, CMS will now have more teeth to impose penalties for noncompliance.
Updates in 2026
Beginning in 2026, CMS began implementing random quarterly claim audits applicable to any reporting failures for events occurring on or after one year prior. These audits include review of both Section 111 submissions and records from sources outside of the regulation to monitor for instances of total failures to report. RREs found to be noncompliant with Section 111 will be provided notice of any proposed penalties and given an opportunity to appeal the same through the CMS administrative process.
Specific reporting requirements (and penalties) under Section 111 are different depending on whether the RRE is a non-group health plan (such as liability insurers, self-insurers, no-fault insurers, and workers’ compensation insurers) or a group health plan (such as third-party administrators, plan administrators, or fiduciaries of self-insured and self-administered plans). For example, non-group health plans must timely report claim information on a quarterly basis, including events in which they assume an ongoing responsibility for an injured party’s medicals or make a total payment obligation, such as a settlement. Such reports must be made within one year of the payment event.
For these entities, CMS has authority to impose penalties of:
- $250 per day, per record, if a record is between one and two years late
- $500 per day, per record, if a record is between two and three years late
- $1,000 per day, per record, if a record is three or more years late
- $365,000 per record maximum
Comparatively, group health plans must also quarterly report coverage information for Medicare beneficiaries enrolled in their plans and provide reports of any changes in coverage. To be considered timely, the report must be made within one year of the coverage effective date or the date the individual became a Medicare beneficiary, whichever is later. These entities are then subject to monetary penalties of $1,000 per day, per record, for noncompliance, with the same maximum penalty of $365,000 per record.
Potential monetary penalties for noncompliance with Section 111 represent a new risk factor that insurers, self-insured entities, and third-party administrators must be cognizant of moving forward. These entities should review all current practices and protocols related to CMS reporting to ensure compliance with Section 111 rules.
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