CMS Continues Slow-Motion Section 111 Reform

May 17, 2021

As we have outlined a number of times over the last several months, the Centers for Medicare & Medicaid Services (CMS) is conducting a slow-motion reform of Section 111 processes in plain sight. The drip, drip, drip of updates continued last week with the announcement that CMS will be modifying its Common Working File (CWF) logic to allow for pre-reporting of Medicare Secondary Payer situations. As we outline below, this is another welcome change that will facilitate more accurate, timely, and complete reporting.

What is the Change?

The change request (Change Request 12176 for those scoring at home), will provide an update to Medicare’s CWF to allow for “MSP effective dates” up to three months into the future. The CWF is a Medicare beneficiary’s master record and it includes critical coordination of benefits information for the beneficiary, allowing Medicare and providers to more accurately bill the appropriate payer. The CWF’s MSP effective date helps providers and Medicare identify whether or not payment for medical treatment should be made by Medicare, or whether another insurer is required or responsible for making that payment.

Section 111 reporting is a major source of information for the CWF, with the MSP effective date being populated whenever a claim is successfully reported on an enrolled Medicare beneficiary.  The issue – and the reason for the change – is that Medicare’s electronic query process currently only identifies individuals as Medicare beneficiaries whenever a CWF record is established, which is months prior to enrollment in Medicare. The query process identifies past, present, and future Medicare beneficiaries with the same disposition code – ‘01’.  At present there is no way for a claims payer to identify which of those individuals is actually enrolled in Medicare, although an adjustment to that logic is anticipated later this year with the implementation of PAID Act changes.

Because a claims payer cannot identify those actually enrolled in Medicare, anyone with a ‘01’ query response is reported to CMS.  When claims are reported for individuals who are not yet beneficiaries, Medicare will report a ‘03’ disposition code.  When such a code is returned, in many cases the claims payer should re-report the claim the following quarter.  Depending upon the claims payer, the volume of quarterly claim input reports can often include a substantial portion of follow up reports that were re-reported in response to a ‘03’ disposition.

Why is the Change Important?

Change Request 12176 will allow for more accurate, complete, and timely reporting in two important ways.  Allowing for MSP effective dates up to three months into the future will reduce the volume of ‘03’ responses received in Section 111 reporting, eliminating the need for subsequent claim reporting to clear the ‘03’ code that was previously received.  This updated guidance should help to reduce the ‘noise’ in Section 111 reporting and allow claims payers to focus on accurately, completely and timely reporting the claims that truly matter.


The larger context of course is that CMS has made a number of similar announcements over the previous twelve months as it prepares to unveil the final rule on Section 111 civil money penalties.  Since the spring of last year we have seen clarifications on reporting (or not reporting) workers’ compensation indemnity-only settlements, the conversion of the ‘SP 31’ response into the updated ‘03’ code described above, a new ‘CP13’ code for no fault claims reported with a policy limit of under $1,000, and ‘soft edits’ to ensure that claim reports are not rejected merely due to minor or inconsequential data quality errors.

Medicare is gearing up for penalties by eliminating any excuses or obstacles to accurate, complete, and timely Section 111 reporting.  Expect more changes to come this summer as Medicare prepares not only for civil money penalties, but also updates triggered by the December 2020 passage of the PAID Act.

ECS’ powerful Section 111 reporting platform, MIR Service, seamlessly integrates all of these changes with aplomb.  As we are seeing, Section 111 reporting is merely the beginning of the process that leads (potentially) to civil money penalties and exposure to conditional payments. This comprehensive MSP compliance platform not only ensures compliance with Federal law, but also utilizes business intelligence and automated workflows to eliminate the threat of civil money penalties and Treasury offsets.  Should you have any questions about any of these topics, or if you want to learn more about our tailored MSP compliance solutions contact us at 678-222-5454 or

Marty Cassavoy

Marty Cassavoy

Marty Cassavoy is the Sr. Vice President of MSP Compliance and Business Development at ExamWorks Compliance Solutions. Marty and his team develop solutions for challenges in all areas of Medicare Secondary Payer compliance and across all insurance types. An attorney licensed to practice law in Massachusetts, Marty works out of ExamWorks’ Woburn, Massachusetts office and can be reached at 781-517-8085 or