Phil TEST Blog

July 14, 2026 / 7 min read

In a new Section 111 development, the maximum daily civil monetary penalties (CMPs) amount regarding non-group health plan (NGHP) Section 111 reporting has been increased as announced in a Final Rule issued by the Department of Health and Human Services.^[1] This inflation increase to NGHP Section 111 CMPs amounts is part of wide-scale general annual CMPs inflation adjustments applied to numerous other federal statutes as announced in the Federal Register at 91 Fed. Reg. 3665 (January 28, 2026) titled as “Annual Civil Monetary Penalties Inflation Adjustment.” These newly released inflation adjustments update 45 CFR Part 102 (Adjustment of Civil Monetary Penalties for Inflation).

CMS S111 Daily CMP Rate $1512

As discussed below, the daily maximum CMPs amount pertaining to NGHP Section 111 reporting has now increased from $1,474 to $1,512 (a $38 increase). This updated figure of $1,512 is referenced as the “2025 maximum adjusted penalty.”^[2]

This update is particularly noteworthy as CMS just started its Section 111 audits in January with RREs now facing the real prospect of monetary fines since the start of CMS’s Section 111 reporting process over a decade ago. In this regard, CMS recently announced on its Section 111 webinar that it expects to complete its first audits in February and may start to issue CMPs notices to no-fault and liability RREs as early as March. CMS will start its audits of workers’ compensation submissions in July.

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The authors outline this new update, and related matters, as follows:

Summary

The daily maximum CMPs amount pertaining to Section 111 NGHP reporting has been increased from $1,474 to $1,512 (a $38 increase) as announced in the Federal Register (January 28, 2026).^[3] The now replaced $1,474 figure had been in place since August 8, 2024.^[4]The newly adjusted maximum daily CMPs are now effective.^[5] From the authors’ research, CMS has not issued any information regarding this increase as of the time this article was drafted, nor had it published any information regarding the last inflation update made in August 2024 (which has now been replaced as noted above).

Background

Under the Medicare Secondary Payer (MSP) statute, Section 111 NGHP RREs are subject to CMPs, in pertinent part, “of up to $1,000 for each day of noncompliance with respect to each claimant.” (42 U.S.C. § 1395y(b)(8)(E)(i)).^[6]This amount is subject to an annual inflation adjustment.^[7]At the time CMS’s final rule was released in October 2023, the annually adjusted maximum daily CMPs amount was $1,428.^[8]This amount, as noted above, was then increased from $1,428 to $1,474 in August 2024.^[9]The new adjusted maximum daily CMPs rate, as noted above, is now $1,512 (Federal Register January 28, 2026).

As a refresher, NGHP RREs are subject to CMPs for untimely TPOC and ORM reporting under CMS’s CMPs final rule.^[10]In general, per 42 CFR § 402.1(22)(i), CMS may impose CMPs when the NGHP RRE “[f]ails to report any beneficiary record within 1 year from the date of the settlement, judgment, award, or other payment [TPOC], or the effective date where on-going payment responsibility for medical care [ORM] has been assumed by the entity” as more specifically defined in CMS’s final rule. Id. See our Section 111 FAQs for more information.

CMS will apply CMPs against NGHP RREs using a “three-tiered" approach based on the length of time an NGHP RRE is late in successfully submitting a required TPOC and/or ORM report.^[11] In this regard, as part of its October 2023 final rule, CMS, applying the statutory “base” figure of “up to $1,000,” calculated the “daily penalty” amount per each tier as follows: Under Tier 1, $250 (or 25% of the base max $1,000 figure) for each calendar day of non-compliance where the record is reported 1 year or more, but less than 2 years after, the required date.^[12]Under Tier 2, $500 (or 50% of the base max rate) for each calendar day of non-compliance where the record is reported 2 years or more, but less than 3 years after, the required reporting date.^[13] Finally, under Tier 3, $1,000 (100% of statutory base max rate) for each calendar day of non-compliance where the record is reported 3 years or more after the required reporting date. In addition, as part of the final rule, CMS noted that the total penalty for any one instance of noncompliance (at that time) would be no greater than $365,000.^[14]Importantly, CMS alerts the public that each of these starter “base” amounts, as well as the total maximum penalty amount are subject to annual inflation adjustments under 45 CFR part 102.^[15]

Updated CMPs rates based on the new inflation increase

Applying the inflation adjusted maximum daily CMPs amount of $1,512 utilizing CMS’s “tiered” CMPs calculation approach discussed above, the current CMPs rates are as follows:

Tier 1: $378 for each calendar day of non-compliance where the record is reported 1 year or more, but less than 2 years after, the required date.
Tier 2: $756 for each calendar day of non-compliance where the record is reported 2 years or more, but less than 3 years after, the required reporting date.
Tier 3: $1,512 (max rate) for each calendar day of non-compliance where the record is reported 3 years or more after the required reporting date.

For those interested, the new inflation adjusted rates contained in the Federal Register (January 28, 2026) result in the following “increases” from the prior and now replaced August 2024 rates: Tier 1 – an increase of $9.50; Tier 2 – an increase of $19; and Tier 3 – an increase of $38.

The current total maximum penalty amount for any single instance of noncompliance is $551,880 applying the adjusted inflation rate contained in the Federal Register (January 28, 2026), up from $538,010 which was the max rate per the now replaced August 2024 update.

To the authors’ knowledge, CMS has not yet officially released recalculated CMPs amounts based on the new inflation updates contained in the Federal Register (January 28, 2026). On this point, the authors note that CMS, to their knowledge, did not update their CMPs calculation following the August 2024 increase and instead they have continued to use the old max daily rate of $1,428 released back in October 2023 in their materials. Using this old rate, CMS’s materials reflect the following CMPs rates: (Tier 1 -$357); (Tier 2 -$714); and (Tier 3 - $1,428).^[16]

Of note, as part of its recent Section 111 webinar, CMS advised that, in terms of the monetary CMPs amount the RRE must pay, this will be based on the effective CMPs inflation adjusted amount at the time CMS’s initial audit occurs. On this point, CMS explained that if there is a subsequent inflationary adjustment to the CMPs rates before the RRE makes payment, the amount the RRE will pay will be based on the adjusted CMPs amount in place at the time of CMS’s initial audit, and not the subsequently increased rate. Similarly, CMS also explained that, while there would be time which would pass between the occurrence of the initial audit and when a CMP would be formally assessed, the clock would stop ticking in terms of the daily penalty calculation as of the date the non-compliance was identified via the initial audit. In addition, as part of this webinar, CMS also confirmed that it will only accept CMPs payment via Pay.gov eBill.

Going Forward

With CMS audits underway, NGHP RREs may wish to note this updated maximum daily CMPs amount as part of their Section 111 compliance protocols. In the interim, we will continue to monitor any future releases from CMS related to this CMPs inflation adjustment.

Of course, please do not hesitate to contact the authors if you have any questions or to learn how Verisk’s MSP Navigator reporting tool can help you improve you Section 111 reporting practices to avoid CMPs.

Phil Test Blog

Summary

Background

Updated CMPs rates based on the new inflation increase

Going Forward