Today marks a pivotal point in workers’ compensation Medicare compliance. While for nearly fifteen years Medicare has required workers compensation claims payers to report certain key data elements to the agency, those data elements have remained largely unchanged. Basic information (plus a lot of extraneous detail) about open workers’ compensation claims and settlements has been required. No longer.

Effective today, April 4, 2025, Medicare will now require workers’ compensation claims payers to also report Medicare Set-Aside amounts in any settlements involving Medicare beneficiaries. There’s a lot to unpack with this new reporting requirement, and here are answers to the top 10 questions ECS has received over the last few months:

1. When does this begin? The key date is today – April 4, 2025. The new reporting requirement kicks in for claims with a total payment obligation to the claimant (TPOC) date of April 4, 2025. Medicare determines TPOC in a workers’ compensation claim typically at the date a judge approves a full and final settlement. If judicial approval is not required, then the TPOC date would be the date the settlement agreement is signed or (in rare cases) the settlement date. If the TPOC date is prior to April 4^th, then MSA information is not required even if the claim will be first reported to Medicare after 4/4/2025. The normal reporting period cycle remains in place. So as an example, an RRE in reporting group 12 will be required to populate the Medicare Set-Aside details on claims with a TPOC date on or after April 4, 2025 in their CMS claim file submission on June 22^nd.

2. What data elements must be reported? The key data elements are:

• MSA Amount – This is the amount of money to be set aside. This can be zero dollars. In January CMS updated its zero MSA criteria (likely in anticipation of this date) and beginning in July CMS will no longer review zero dollar MSA proposals. ECS’ Michael Flower covered that change here.
• MSA Period – This is the term of the MSA. Note, this does not necessarily mean life expectancy. For instance, in Georgia this could be 400 weeks from the date of incident. Any MSA obtained from a reputable MSA provider will clearly indicate the MSA period. This field is required if the MSA amount is greater than $0.00.
• Lump / Annuity Indicator – If the MSA is greater than $0.00, the claims payer must indicate whether the MSA will be paid as a lump sum or a structured settlement annuity.
• Seed Money – If annuity is selected, the claims payer must report the seed amount. Note, this should be the seed amount included within the settlement. If the structure modifies the MSA amount on an MSA report, it must reflect the structure as agreed by the parties.
• Annual Payment – This is the amount of money to be paid annually in the corresponding years following the payment of seed money.

3. What are the optional fields? CMS has provided two optional fields for mandatory MSA reporting. Those fields are: CMS case control number, which is the unique number associated with any CMS submission; and professional administrator EIN which would only be reported if there is a professional administrator handling the MSA funds. Because these fields are optional and not required there is limited strategic or operational advantage for a claims payer to report this data to CMS.

4. Which settlements do these requirements apply to? Mandatory MSA reporting requirements apply to any Medicare reportable workers’ compensation TPOCs. This means if it is a full and final settlement of medical benefits, with a total settlement value greater than $750, involving a Medicare beneficiary.

5. Which settlements do these requirements not apply to? These requirements do not apply in a number of common situations. An indemnity only settlement, where medical will remain open, should never have an MSA and is not a reportable TPOC. Claims involving individuals who are not yet Medicare beneficiaries are also not reportable, so while an MSA may be obtained on someone 64 years old who is not yet on Medicare, that MSA will not be reported to Medicare.

6. Does this change or alter the CMS submission process? No, there are no changes to the CMS submission process at this time. Medicare will still review any claim involving a Medicare beneficiary with a total settlement amount greater than $25,000 and claims involving individuals with a reasonable expectation of Medicare enrollment within 30 months and a total settlement value greater than $250,000.

7. What should we do on cases that settle for $25,000 and less? In a number of jurisdictions, there is a statistically significant percentage of Medicare beneficiary settlements for just under $25,000 (shocking, I know). Mandatory MSA reporting applies to all reportable workers compensation settlements with Medicare beneficiaries – so anything greater than $750. In all such settlements, documenting the decision making around future medicals is vital. Even if it’s zero dollars, everyone should be on the same page as to the value that will be reported to Medicare. For cases that had previously settled for $24,999 to avoid the CMS review process, it’s critical to effectively document decision making and likely to obtain an independent review from a reputable practitioner with an expertise in evaluating future medical (hint, call me).

8. What will CMS do with the data? CMS will use the reported information to place a marker on the claimant’s common working file, which governs the behavior of Medicare and its payment contractors. This will let Medicare, its contractors, and providers know that the beneficiary has an MSA that should be paying for any workers compensation claim related medical care – even post settlement. In closed conversations, CMS has indicated that it may review very low dollar, or zero dollar set asides, and compare them to very large settlement amounts. Where there is a significant delta between the MSA amount and the total settlement amount, Medicare has indicated that it may inquire with the parties to identify whether the settlement effectuated a burden shift to the Medicare program.
   
   
9. What information will be provided to the claimant / beneficiary? Post-settlement, CMS will mail the beneficiary a letter outlining how to administer the MSA (including attestation and exhaustion). This will occur in all reported claims with an MSA amount greater than $0.00, even those cases where the parties elect to avoid CMS’ voluntary MSA review process. Because the claimant will receive written communication from CMS, it is critical that counsel and judges are in close communication and are aligned in their understanding about the impact pre- and post-settlement to the parties but especially the beneficiary. And in situations involving pro-se claimants, those communication and collaboration requirements become even more critical.

10. What services does ECS offer to assist with mandatory MSA reporting? ECS is the nation’s longest-serving provider of MSA services, with nearly 500,000 provided over the last 25 years. In addition to standard MSAs, we offer a Future Medical Allocation (FMA) service that is designed specifically for cases settling between $750 and $25,000. A streamlined, lower-cost alternative to a standard MSA, the FMA provides parties with a reliable, accurate, and complete picture of future medical that allows parties to settle with confidence. Take the risk out of determining future medical and place it in the hands of the most reliable practitioner in the country.

We’ve heard a lot of interesting commentary about what mandatory MSA reporting will mean, but the simple fact is it’s all speculation at this point. Beginning today we will learn what CMS really has in store in regards to enforcement against beneficiaries and claims payers. From the claims payer perspective, make sure that claims staff and counsel are aware of these changes, have a plan to address them, and your technical solution is up-to-date. And, if you are an attorney and this is the first you are hearing of this, give an expert a call. ECS will continue to inform on this important topic. If you have any questions at all, please reach out to our Compliance Team at mspcompliance@examworkscompliance.com or you can email Marty Cassavoy at martin.cassavoy@examworkscompliance.com.