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Friday, March 13, 2026

CMS Section 111 Reporting Changes, Enforcement, and Audits for Workers’ Compensation Settlements - Dentons

Last year, the Centers for Medicare & Medicaid Services (CMS) made changes to its reporting rules, Section 111, specifically as it relates to Medicare Set-Asides (MSAs). Section 111 audits will begin next month, related to the rule change that is being enforced as of October 11, 2025, for applicable settlements from October 11, 2024, and forward. Here is what employers and insurance companies need to know.

Section 111 Rule Changes – October 2024

Effective October 11, 2024, all workers’ compensation settlements that involved 1) an injured worker who is or was on Medicare, and 2) settled out/closed future medical, must be reported to CMS, even if there is a zero MSA, non-submit MSA, or it is below the review threshold. CMS makes it mandatory for self-insured employers and insurance companies to report when these two conditions are satisfied.

Section 111 Reporting Form Changes – April 2025

Effective April 4, 2025, the Section 111 Report to CMS must include the MSA amount in addition to the date of settlement and total settlement amount.

Section 111 Penalties Enforced – October 2025

The effective enforcement date for penalties for failure to report/noncompliance was October 11, 2025, for settlements reached on or after October 11, 2024. There is a one-year lookback; in other words, failure to report a settlement reached on or after October 11, 2024, within one year of the settlement date, can result in penalties of $250 or more per day, adjusted for inflation to $357 per...



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