In a May 11, 2011, memorandum, the Centers for Medicare and Medicaid Services (CMS) reiterated its guidance regarding CMS’ Workers’ Compensation Medicare Set-Aside Agreements (WCMSA). The May 11, 2011, memorandum confirmed submission of a WCMSA proposal to CMS for review and approval is a recommended process
. Historically, there have been no statutory, or regulatory, provisions requiring a WCMSA proposal be submitted to CMS, regardless of the claimant’s status as a Medicare beneficiary or the settlement amount. However, as of April 4, 2025, that position, long held by CMS, is changing. Through a November 13, 2023, webinar, Medicare announced its plans for new mandatory workers’ compensation reporting requirements for Responsible Reporting Entities (RREs). Responsible Reporting Entities are defined as non-group health plan carriers and self-insureds. Beginning April 4, 2025, CMS will require MSA data (including zero-dollar MSAs) to be reported in all full and final settlements of a Medicare beneficiary’s Worker’s Compensation claim falling within the parameters set forth below. CMS’ new policy language is as follows:
All MSA funding for WC settlements shall be reported regardless of whether or not an approval was previously sought from the CMS. This change will be prospective for TPOCs [total settlement amounts] on or after the implementation date. For example, records submitted on a production file with a TPOC [total settlement amount] date on or after April 4, 2025, will be subject to the new edits.
Pursuant to the most recent version of the NGHP User Guide, Chapter III v. 7.5, Section 6.5.1.1., beginning April 4, 2025, Medicare will require RREs to report, what, if any, Workers’ Compensation MSA amount is included in a Medicare beneficiary’s total settlement (which CMS characterizes as Total Payment Obligation to Claimant (TPOC)). As of April 4, 2025, WCMSA data for all worker’s compensation claims involving a Medicare beneficiary settling their claim on a full and final basis must be reported to the Center for Medicare and Medicaid Services. The reporting obligations include:
- Settlements involving Medicare approved WCMSAs;
- Settlements involving a WCMSA where the total settlement value does not exceed the applicable Medicare workload review threshold for voluntary participation in Medicare’s review process;
- Settlements where the parties put no money towards future medical (i.e., Zero Dollar WCMSAs);
- Settlements where the parties obtained an MSA or otherwise allocated money for future care but did not submit it to Medicare (Evidence based MSAs).
CMS is hopeful these reporting requirements will illustrate how many settlements below the $25,000 workload review threshold are actually allocating money for future medical care. CMS will likely scrutinize settlements where the MSA allocation is zero-dollar, or small, in comparison to the total settlement amount. Fortunately, the requirement is prospective. For settlements approved prior to April 4, 2025, RREs are not required to report WCMSA information to CMS.
What does this mean and what are the consequences of noncompliance? On and after April 4, 2025, failure to report WCMSA information to CMS following settlement of a claim involving a Medicare beneficiary may result in civil money penalties, CMS declining to recognize the underlying settlement, pursuing recovery for post-settlement conditional payments, and/or pursuing treble damages under the False Claims Act.
Medicare’s new mandatory reporting requirements are clearly an about face from its previous position that submission of a WCMSA proposal to CMS was a recommended process, and there was no requirement of submission, and no review of settlements valued less than $25,000.
Please feel free to contact any of the attorneys at BGAM Law if you have any questions regarding CMS’ recent updates, WCMSA issues, any issue involving workers’ compensation, or any of our other practice areas.
