CMS Releases Updated User Guide – Formalizing Guidance on Mandatory MSA Reporting

As expected the Centers for Medicare and Medicaid Services (CMS) published version 7.5 of the Non-Group Health Plan (NGHP) User Guide incorporating the February 23, 2024 Alert.

The Alert requires the need to report Workers’ Compensation Medicare Set Asides (WCMSAs) via Section 111, and the updated user guide provides the technical details to incorporate this information.

Background

The Medicare & Medicaid SCHIP Extension Act (MMSEA), signed into law by President George W. Bush in December 2008, was enacted to establish four (4) primary pillars of Medicare compliance for the NGHP industry. The first three (3) pillars have been in place for the past 10 or more years of the 14 year existence of the MMSEA.

• Identify instances where a primary payer exists. This was accomplished by the implementation of reporting itself in 2010, as the Responsible Reporting Entity (RRE) is required to report certain claims to Medicare.
• Cease making payments when a primary payer exists. As claims are reported to Medicare, CMS uses the data to determine conditions and treatments that may be the responsibility of the primary payer (aka RRE), and then decline reimbursement to the treating physician.
• Recover millions of dollars in conditional payments. When CMS processes the RRE’s claims data, they compare it to payments they have already made and then request reimbursement through the conditional payment reimbursement process. Prior to Section 111 reporting, conditional payment recovery relied upon voluntary reports.

Until now, CMS has never spent much energy on evaluating how settlements are actually constructed. As we have discussed a number of times over the last several months, CMS will soon mandate the reporting of WCMSA amounts on all workers’ compensation settlements (a/k/a total payment obligation to the claimant – or TPOC).   User Guide version 7.5 formalizes this equirement by adding seven (7) new fields to the claim input layout and creating corresponding error codes for those fields. With these changes, which are effective April 4, 2025, Medicare will be able to establish and corroborate that funds have been set aside for the treatment of the claimant’s future medicals, deny payment for related treatment when an MSA has not been exhausted, and potentially evaluate the sufficiency of funds set aside.

What does it mean to me?

If you only work in the world of Liability and No-Fault claims, then this does not apply to you.

However, if you handle workers’ compensation claims, then when you settle a workers’ compensation claim and report a TPOC, you will also be required to populate, at a minimum, the following five (5) fields regarding any applicable WCMSA:

Medicare Set Aside Amount. This should be the total amount of money set aside, including $0.00. If there is a structured settlement funding the WCMSA, the MSA Amount must be calculated using the total payout amount. If a settlement provides for the purchase of an annuity, it is the total payout from the annuity. For annuities, base the total amount upon the time period used in calculating the purchase price of the annuity or the minimum payout amount (if there is a minimum payout), whichever calculation results in the larger amount.

MSA Period. The amount of time in years that the MSA is expected to cover the beneficiary, if applicable

Lump Sum or Structured/ Annuity Payout Indicator. A value to indicate if the WCMSA is established as either a Lump Sum (L) or a Structure/Annuity (S).

Initial Deposit Amount. If the WCMSA is a Structure/Annuity, then populate the amount of the initial deposit to establish the account.

Anniversary (Annual) Deposit Amount. If the WCMSA is a Structure/Annuity, then populate the amount of the annual payment into the account.

Case Control Number. Case ID for WMCSAs submitted for voluntary review pre-settlement or for non-CMS approved WCMSAs submitted post-settlement.

And if the WCMSA is being professionally managed, then you have the option of also populating:

Professional Administrator EIN. EIN of Professional Administrator, if applicable. Case administrator will default to the beneficiary if no EIN is entered in this field, or if the EIN submitted does not match a registered administrator account in the Workers' Compensation Medicare Set Aside Portal (WCMSAP).

Where are these fields located in the file specification?

An existing “Reserved for future use” area of the Claim Input Detail Record is being repurposed to accommodate these seven (7) new fields. Field 37, historically a gap of 106 characters that have never been populated before, is being split into the aforementioned seven (7) new fields that will comprise sixty (60) characters. The remaining 46 characters will be “Reserved for future use” going forward.

When do I need to start populating these new fields?

True to its word, CMS is providing a full year for the industry to ramp-up to this new requirement. Many organizations will elect to update claims systems to store these new fields, and that’s no small undertaking. Additionally, claims handling processes must be modified and claims handlers educated on what these fields mean and when to populate them.

What if I don’t populate these new fields?

In short, rejection. If your workers’ compensation claim is reported to CMS with TPOC Date and TPOC Amount populated, then you must populate the five (5) fields indicated above. With late report of a TPOC becoming a penalizable offense for claims that settle as soon as next year, failure to populate these WCMSA fields may put the claim at risk of civil money penalties (CMPs). The updated NGHP user guide includes a new error code prefix of “CW” as well as twelve (12) new error codes (CW01 to CW12). These errors are not “soft edits,” the presence of these errors will prevent a report from being accepted by Medicare.

What’s ECS’ plan to address these changes?

ECS Section 111 customers will be well positioned to easily comply with these new requirements, particularly where MSAs were obtained through ECS. In the coming days, ECS will provide detailed information to all of our Section 111 reporting customers regarding these changes, the associated impact, and the ways that ECS will assist in overcoming the potential technical and operational obstacles presented. We will continue to keep readers apprised of developments. Should you have any questions on these developments please contact Scott Huber at 678-256-5135 or Scott.Huber@examworkscompliance.com. ECS Section 111 reporting clients should address any questions to their assigned MMSEA Compliance Manager or via email at MIRService.Support@examworkscompliance.com.