What It Means for Workers’ Compensation and Medicare Set-Asides
Effective April 4, 2025, the Centers for Medicare & Medicaid Services (CMS) is expanding its Section 111 reporting to include Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs). This change enhances CMS’s ability to easily identify MSA amount, improve on coordination of benefits and enforce compliance with secondary payer rules.
For workers’ compensation insurers, employers, and settlement professionals, understanding these updates is critical to avoiding penalties and ensuring proper claim handling. Let’s break down what this means and how stakeholders can prepare.
Key Changes
- Sec.111 TPOC to Include MSA Data - CMS will now require the submission of certain WCMSA data fields when claims are settled involving a Medicare beneficiary. This expansion aims to ensure Medicare can collect important information needed for appropriate coordination of benefits, as mandated under 42 U.S.C. 1395y(b)(8)(ii). The data collected will assist Medicare in making informed determinations regarding the coordination of benefits, ensuring that Medicare does not become the primary payer for future medical services related to workers’ compensation injuries if the MSA funds didn’t exhaust CMS will now be able to identify non-submit MSA’s and post the Common Working File to avoid making payment.
- New Policy for Unfunded ($0) WCMSA Requests- CMS introduced a policy stating that $0 WCMSA proposals will no longer be accepted starting July 17, 2025. If such proposals are considered, they must have strong documentation showing the injured worker doesn’t require Medicare-covered treatment for the work-related injury. The WC carrier denied responsibility for benefits under the state workers’ compensation law and has made no payments for medical treatment or indemnity This policy is designed to prevent situations where Medicare could accidentally cover costs that should have been addressed by the settlement. While review of $0 proposals is being phased out, CMS will continue to attempt recovery of conditional payments for services provided before the settlement date. For additional criteria please refer to WC Reference Guide Sec. 4.2
- Amended Review Update – Effective April 7, 2025, requests for Amended Reviews will be permitted at any time after a decision from CMS is made. Previously, the requirement was to wait 12 months following the CMS decision. To qualify, specific criteria must be fulfilled. This information will be reflected in Section 16.3. This change is significant for injured workers, as it eliminates the need to wait an entire year to settle their claims
Key Points to Note
- Prospective Change: The expansion will be prospective, with records submitted on or after April 4, 2025, subject to the new reporting requirements.
- Enhanced Insight for Coordination of Benefits: CMS' expanded data collection efforts will provide greater insight into non-submitted medical allocations for injured workers receiving Medicare benefits, thus improving coordination and compliance within the Workers’ Compensation system.
- New MSA Fields: The new fields to be collected include: MSA Amount, MSA Period, Lump Sum or Structured/Annuity Payout Indicator, Initial Deposit Amount, Anniversary (Annual) Deposit Amount, Case Control Number, and Professional Administrator EIN.
What This Means for Workers’ Compensation Stakeholders
- Enhanced Reporting Responsibilities: Ensure all settlements and WCMSAs are reporting correctly under Section 111
- Risk of Penalties: Non-compliance could result in the loss of coverage and the potential for penalties from CMS
- Educate Clients on MSA Administration: Injured workers must understand their obligations to prevent Medicare denial
- Increased Examination from CMS: Improper use of MSA funds may lead to coverage denials
- Impact on Medical Billing: Following the implementation of these changes, the Medicare Administrative Contractor (MAC) will play a crucial role in reviewing medical bills submitted by providers on both submitted and non-submitted MSA’s to CMS. If a code “W” indicating a WCMSA is present in the Common Working File (CWF), the MAC will deny the bill, as the MSA funds are considered primary.
Conclusion
The expansion of Workers' Compensation Section 111 reporting represents a significant step towards improving the coordination of benefits and ensuring compliance with MSP Mandatory Reporting Provisions. By collecting essential WCMSA data fields, CMS aims to protect the integrity of the Medicare program while providing clarity and transparency for all stakeholders involved in Workers’ Compensation claims settlements.
If you have any questions regarding CMS’ recent update, please feel free to contact us at 877-983-9564 or email us at marketing@ametros.com.
