09/17/2025    Paul Kesselman, DPM

MMSEA 111

CMS in its infinite wisdom has announced a new
acronym MMSEA 111, Medicare, Medicaid, Schip,
Extension Act of 2007, Section 111. This new
policy should alert you to is that you must report
incidents where you can identify payments which
should not have been paid by Medicare but rather
by another carrier. That is Medicare should have
been the Secondary Carrier as the patient may have
been covered by another entity.

While this is not really a new policy, the heavy
handedness, and penalties soon to go into effect
are really incredible. One example, is that
effective January 1, 2026, CMS will be conducting
random audits going back to the first date of the
previous quarter (in this case October 1, 2026).
Any payments made incorrectly could be subject to
a False Claim Act penalty of $1,000. That is not
per claim line, but per date of service. Hence if
the payment was made in October 1, 2025 for a date
of service going back to October 2, 2024, the
potential penalty could be in excess of $365,000
for one service line going back to October 2,
2024.

Personally, more than 20 years ago, this was an
issue in my practice where Medicare contacted me
and requested thousands of dollars back for one
surgical patient whose younger husband was still
working and my practice was unaware, she was
covered primarily under his plan, as his group
plan had always been paying as the secondary
carrier. Fortunately, one phone call to this
patient’s husband resulted in the group plan
retroactively paying me as though they were
primary (thousands of dollars more than Medicare
did) and I gladly refunded a much lesser amount to
Medicare. The group plan continued to pay
primarily for many years until the husband retired
and both became Medicare primary beneficiaries.

The point of this story, had this been subject to
the new MMSEA 111 policy, my practice could have
been penalized and forced to pay hundreds of
dollars in False Claims penalties.

The take home message for your practice is to
identify, at every patient visit, whether the
reason for their visit should be reimbursed by
another entity other than Medicare. Hence Medicare
Secondary Payer. This includes,
No-Fault, third-party liability (slip and fall),
worker’s compensation, etc. If you do identify
those as the etiology for what you are going to
treat, DO NOT initially submit these claims to
Medicare. These claims must go to another entity
and only should be reported to Medicare once the
claim is processed by the primary payer and
then the claim may be submitted to Medicare as the
secondary payer to potentially cover any balance.

Medicare’s routine audit of these claims may
result from patient complaints, reports from
plaintiff’s attorneys, or even from another
provider who is treating the patient for that
incident and regularly file reports with CMS.

Whether patients on Medicare Part C plans also are
subject to these Civil Monetary Plans is unclear.

Further resources may be found at:
Sec111CMP@cms.hhs.gov or
https://www.cms.gov/medicare/coordination-
benefits-recovery/mandatory-insurer-reporting

Paul Kesselman, DPM, Oceanside NY

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