In 2026, the professional administration of Medicare Set Asides (MSAs) will matter more than ever as the Centers for Medicare & Medicaid Services (CMS) now has unprecedented post-settlement visibility into workers’ compensation resolutions.
With the risk to a settling party’s Medicare benefits, potential for denials, increasing oversight by CMS, and sharing of data with Medicare Part C & D plans, post-settlement administration can’t be an afterthought, and self-administration just doesn’t cut it. The only viable option for settling parties is professional administration.
This article will explore recent changes and their likely effects in 2026 and beyond in the post-settlement world of MSAs. In this new environment, professional administration is no longer a convenience, it’s a risk-management and compliance imperative for all settling parties.
Effect of Sec. 111 WCMSA TPOC Reporting
Expanded Sec. 111 Total Payment of Obligation to Claimant (TPOC) reporting mandates detailed disclosure of information surrounding future medicals, regardless of whether the MSA was voluntarily submitted. As we’ve previously reported, since April 4, 2025 Medicare has required information around the MSA amount, length of time the MSA will provide coverage for, funding details, the case control number (if voluntarily submitted) and professional administrator information.
Medicare indicated, “[c]ollection of the information is necessary to assist Medicare in making appropriate determinations concerning coordination of benefits under [42] U.S.C. 1395y(b)(8)(ii), since Medicare should not be a primary payer for future medical services related to a WC injury as specified in the WC settlement as per 42 CFR 411.46.” See CMS’ Technical Change to Workers’ Compensation Reporting. Medicare will use the reported MSA Sec. 111 TPOC data to ensure it doesn’t pay when MSA funds are available. This is accomplished by flagging a beneficiary’s Medicare record, known as a Common Working File (CWF), with an MSA code. “A WCMSA ‘W’ record will be posted to the Common Working File (CWF) preventing payment of medical services related to injuries described by the diagnosis codes.” See CMS’ Sec. 111 Change to Workers’ Compensation Reporting Webinar #2, at Slide 5.
Medicare has unprecedented insight in all settlements involving an MSA, including whether one was done or submitted. Therefore, it is critical all MSAs are administered pursuant to CMS guidelines, which includes:
- Placement of funds in an interest-bearing account, separate from any other account (WCMSA Reference Guide, v4.4, Sec. 17.2)
- Use of the MSA account only to pay for medical treatment related to the associated workers’ compensation claim and only if the expense is for treatment or a prescription Medicare would cover (Id., at Sec. 17.3)
- Record keeping requirements related to each healthcare expenditure (See Self-Admin Toolkit, v1.7, Sec. 7)
- Annual Attestation: every year, within 30 days of the anniversary of the settlement date, the administrator must submit attestation to the BCRC attesting appropriate expenditure of the MSA funds for the preceding year. Attestation reporting must also occur in the event of a temporary exhaustion or final depletion of funds. Id., at Sec. 8
If the above compliance requirements are not met, or if an individual mismanages their funds, they risk denial or benefits. “If payments from the [MSA] account are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses for the [workers’ compensation] settled injury or illness, Medicare will deny all WC-injury-related claims until the [MSA] administrator can demonstrate appropriate use equal to the full amount of the [MSA].” See WCMSA Reference Guide, v4.4, Sec. 17.3. With Sec. 111 MSA TPOC reporting, we’re only going to see an increase in denials.
Part C & D Involvement
Sharing of MSA data between CMS and commercial plans is happening and will only increase. Injured individuals are simply not equipped to coordinate between plans and pharmacies relative to CMS data provided. Professional administration is the best solution to interface with providers, pharmacies, plans, CMS and other stakeholders, to ensure there is proper coordination of benefits and no disruption in care.
MSA data is no longer siloed within the confines of traditional Part A/B Medicare. CMS is seeking coordination across Medicare Part C/D as well, and directly informs Medicare Advantage and prescription drug plans, increasing the likelihood of downstream denials or recovery efforts if funds are mismanaged. CMS recently issued a memo announcing in February 2026, the agency would begin providing Medicare Part D plans with certain prescription drug information and ‘additional data elements’ which those plans may use to improve coordination of benefits in relation to MSAs.
Medicare directs Part D plans to continue to follow procedures outlined in Chapter 14, Sec. 50.12, of the Medicare Prescription Drug Benefit Manual (“pay and chase”) or “…adopt the alternative method of MSP adjudication…” Pursuant to this new alternative method, “…instead of making conditional primary payments while awaiting coordination with a [MSA] administrator, [plans with MSA data] may utilize the information provided to introduce prior authorization requirements and implement beneficiary-level point-of-sale edits for the drugs identified for that enrollee’s WCMSA.” A point-of-sale-edit is a real-time claims check that occurs while the pharmacist is processing a prescription. Part D plans who do not perform point-of-sale edits are directed to “pay and chase.” In other words, a beneficiary can have their prescription drugs denied when they go to fill them if certain data doesn’t match up.
The good news is Medicare directs Part D plans to “…accept an attestation by the WCMSA administrator or enrollee that the requested drug is not related to the workers’ compensation injury as sufficient evidence for Part D to serve as the primary payer and resolve the edit.” Moreover, the agency expects Part D plans to remove any point-of-sale edit when depletion or exhaustion of the MSA occurs. See memo entitled, “Coordination of Benefits-Other Health Insurance (COB-OHI) Companion File to Include Data on Workers’ Compensation Medicare Set-Aside (WCMSA) Arrangements” at this link.
Without a professional administrator supporting a beneficiary, risk of denial and disruption of care increases exponentially. There are now too many sophisticated entities, processes and data streams in the mix – along with multiple ways now for plans to deny benefits up front or seek recovery down the road – to risk having an individual try and navigate this post-settlement complexity.
Medicare is Watching… and Responding
Earlier last year Medicare added new correspondence called the Notice of Settlement Received Letter, advising an injured individual that CMS has receives notice of settlement that includes an MSA amount and outlines high-level post-settlement administration obligations. With this correspondence, the agency expanded its communication efforts to reach all beneficiaries involved in a settlement that included an MSA.
Over the past year, Medicare has taken notable steps to increase oversight and communication surrounding MSAs. One significant development is the introduction of a new beneficiary-facing correspondence: the Notice of Settlement Received Letter. This letter is issued when CMS receives notice of a settlement that includes an MSA amount, regardless of whether the MSA is professionally or self-administered.
The purpose of this correspondence is twofold. First, CMS aims to ensure that beneficiaries are aware that Medicare has been formally notified of their settlement and the associated MSA funds. Second, the letter outlines the beneficiary’s post-settlement obligations, including proper administration and spend of the MSA, accurate recordkeeping, and reporting requirements. This move reflects CMS’s broader effort to promote compliance and reduce improper billing to the Medicare program when future medicals are implicated.
By expanding its communication strategy, CMS is signaling a more proactive stance. The agency is not only monitoring settlements involving MSAs but also taking steps to directly educate and remind beneficiaries of their responsibilities. This added transparency underscores Medicare’s continued focus on protecting the Medicare Trust and ensuring the long-term integrity of the program. We expect more correspondence and outreach like this to issue in 2026 and beyond.
Professional Administration, Non-Submits & Liability MSAs
Professional administration is a must in all instances where future medicals are allocated, not just in voluntarily submitted workers’ compensation MSAs. As settlements grow increasingly complex, and as Medicare sharpens its oversight, ensuring proper administration has become a critical risk‑management tool for all parties involved.
This need extends far beyond the traditional CMS submitted MSA. Non‑submitted MSAs, which are growing in prevalence (as can be inferred by CMS’ recent WCMSA data set) as parties seek greater flexibility, still carry the same core obligation in that the funds must be spent properly, documented accurately, and reported in accordance with Medicare’s post‑settlement rules. Without professional support, injured individuals often struggle to navigate Medicare pricing, coverage guidelines, and the strict recordkeeping standards required to demonstrate that the MSA funds were exhausted appropriately. Moreover, parties mitigate exposure from CMS’ policy around non-submits as articulated in Sec. 4.3 of the WCMSA Reference Guide.
The same is true in liability cases, where future medical exposure may be less predictable but nonetheless exists. Professional administration provides guardrails, support and compliance safeguards in an environment where CMS guidance is less prescriptive but the expectations remain the same: spend the funds correctly, document every dollar, and avoid shifting costs to Medicare prematurely.
Ultimately, professional administration offers protection for everyone:
- Beneficiaries gain support, compliance, and peace of mind
- Payers and carriers reduce the risk of future Medicare disputes or re-opening
- Attorneys ensure their clients are positioned for long‑term success and compliance
Conclusion
As Medicare continues expanding its communication and oversight efforts, professional administration is no longer merely a “best practice,” it is rapidly becoming an essential component of responsible settlement planning across workers’ compensation, liability, and all future-medical allocations, in 2026 and beyond.
For more information how Ametros can help, please contact referral@ametros.com or give us a call 877-590-4467.
