What is the new Workers’ Compensation Medicare Set-Aside (WCMSA) Reporting Requirement?

On November 13, 2023, Medicare held a webinar and discussed forthcoming plans for new Section 111 Mandatory MSA reporting requirements for Reporting for Responsible Reporting Entities (RREs) (i.e. non-group health plan carriers and self-insureds). Additional Medicare webinars were held on April 16, 2024 and April 25, 2024 to further discuss the matter.

Then Medicare codified the WCMSA reporting requirement in NGHP User Guide – Chapter III v. 7.5 (Section 6.5.1.1) and it remains in the most recent version of the NGHP User Guide (v. 7.6). Beginning April 4, 2025, Medicare will now require RREs to report what, if any, WCMSA amount is included within the Total Payment Obligation to the Claimant (TPOC) (i.e. the total settlement amount). We’ve previously blogged about the 7 new fields and you can find that information here.

For What Claims Must WCMSA Data be Reported?

 All workers’ compensation claims involving a Medicare beneficiary with a TPOC must report WCMSA data to Medicare beginning April 4, 2025. That includes:

• 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

Why is CMS Requiring This?

Medicare indicated a need for this data to assist them in coordination of benefits under U.S.C. §1395y(b)(8)(ii). In practice, this visibility will provide Medicare insight into what amount of the TPOC includes money set aside for future medical expenses. Further, it will illuminate for Medicare how many settlements occurring below the $25,000 workload review threshold are allocating money for future care. We can likely expect Medicare to scrutinize zero-dollar allocations and perhaps situations where the value of the MSA is quite small in comparison to the overall settlement value.

When does this WCMSA Requirement go into Effect?

April 4, 2025. The requirement is prospective, meaning TPOCs reported with a date prior to April 4, 2025 will not be required to report WCMSA information. Medicare will permit testing of the new fields starting October 7, 2024.

Will Failure to Report WCMSA Data Put Me at Risk?

Yes! Medicare stated failure to report WCMSA information on relevant claims may result in Civil Money Penalties (CMPs); though, Medicare is delaying the investigation of CMPs in this regard until October 2025 or later. Other consequences could potentially include Medicare declining to recognize the underlying settlement and / or pursuing recovery for post-settlement conditional payments from the parties, including the RRE, or even legal action under the False Claims Act seeking treble damages from RREs.

 What Does ECS Recommend?

Continue to practice ECS’ “ACT Reporting”: Be Accurate, Complete, and Timely and participate in testing this October if possible.

• Ensure your best practices include educating claims handlers and defense attorneys about the new requirements and what information is necessary to populate the new fields
• Monitor for errors / omissions in the WCMSA reporting fields to ensure you are avoiding risk associated with CMPs and the False Claims Act

• If your organization currently has no formal policy for consideration of Medicare’s future interests when settling with a Medicare beneficiary and the total settlement value is $25,000 or less, then now is the time to create a strong policy to guide adjusters and defense counsel in how best to reasonably recognize Medicare’s future interests when the beneficiary needs future care related to the injury. The key risk to avoid here, in addition to CMPs, is the False Claims Act

ECS Can Help Assist with Your Section 111 Reporting Needs

ECS will continue to provide detailed information to all of our Section 111 reporting customers regarding these changes, the associated impact, and the ways that ECS may assist in overcoming the potential technical and operational obstacles presented. We will continue to keep readers apprised of further agency developments. Should you have any questions on these developments please contact Michael Flower at 813-627-2406 or Michael.Flower@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.