Fear, Uncertainty, and Doubt: Mixed Messages Around TPOC Reporting and Zero MSAs

by B. Smith

There have been a lot of confusing and conflicting messages when it comes to Section 111 Reporting of Workers’ Compensation Medicare Set Asides (WCMSAs). This confusion has led to delays in settlement, unexpected reporting errors, and incorrect assumptions about the current WCMSA process. Below we highlight the most common fallacies when it comes to WCMSA reporting and the facts that can help you navigate through these mixed messages.

Fallacy: The April 4, 2025, WCMSA reporting requirements changed CMS review thresholds.

Fact: CMS WCMSA review thresholds remain the same.

As of April 4, 2025, workers’ compensation insurers and self-insureds, as part of Total Payment Obligation (TPOC) Reporting, must report the amount of the WCMSA used to settle the medical portion of a claim. The claimant must be a Medicare beneficiary, and the case should meet the reporting thresholds. However, this Section 111 Reporting requirement did not change the WCMSA workload review thresholds. This means that if you settle a claim with a Medicare beneficiary, and the amount of the settlement is less than $25,000, you cannot submit this to CMS for review.

Fallacy: As of April 4, 2025, all WCMSAs must be submitted to CMS for review and these April 4 reporting guidelines are there to prevent non-submit MSAs.

Fact: Submission of a WCMSA to CMS remains voluntary and the April 4 reporting guidelines are not in place to prevent non-submit MSAs.

CMS has stated over and over that there is no law requiring a WCMSA to be submitted for review and that the new reporting requirements did not change the voluntary nature of submission. This is noted in the WCMSA Reference Guide and was shared in webinar presentations CMS conducted to review these changes.

There has also been a considerable amount of misinformation and exaggeration regarding why CMS put these guidelines in place and what will now happen post settlement. This has led to unnecessary confusion and fear. CMS stated in their April 16, 2024 webinar that the purpose of the new reporting requirement is to prevent payment of injury-related expenses when there is a WCMSA. It also allows CMS to mark a “W” to the Common Working File (CWF) to prevent this from occurring. This applies to both submitted and non-submit WCMSAs.

The guidelines provide transparency in the process and are not meant to prevent the use of non-submit WCMSAs as a reasonable consideration of Medicare’s interest. Submission of a WCMSA to CMS is one way to ensure that Medicare’s interest is protected, but the claimant’s and Medicare’s Interest can also be protected with a reasonable allocation of future medical utilizing a non-submit WCMSA.

Fallacy: CMS issued new guidelines requiring that all settlements include a Medicare Set-Aside (MSA).

Fact: The new guidelines issued by CMS did not change when a WCMSA is, and is not, necessary.

Not all settling claims require a WCMSA to be completed. There are several factors to look at when determining whether a WCMSA is necessary. If the claimant is not Medicare eligible, does not have a reasonable expectation of Medicare eligibility within the next 30 months, and the work-related injuries are not severe enough to require lifelong care, a WCMSA is probably not warranted. In addition, if the case meets the parameters outlined by CMS in the WCMSA Reference Guide, Section 4.2 showing that Medicare’s interest has been protected, a WCMSA may not be needed. Blanket statements that WCMSAs are now required for all claims are not only incorrect but can also drive up claim costs unnecessarily.

Fallacy: Zero-Waiver WCMSAs are appropriate even if payments for medical and indemnity have been made on a claim.

Fact:   Payment of medical or indemnity benefits may preclude a zero waiver unless you meet a CMS exception as outlined by CMS in the WCMSA Reference Guide, Version 4.4, Section 4.2.

A fully denied claim, with no payment of medical or indemnity benefits, may be appropriate for a Zero-Waiver WCMSA if all other criteria in Section 4.2 of the Reference Guide have been met. If payments for medical or indemnity have been made on a claim, a Zero-Waiver WCMSA may still be appropriate if any of the following are true:

• • The workers’ compensation claim was denied by the insurer/self-insured employer within the state statutory timeframe allowed to pay without prejudice (if allowed in that state) during investigation period, benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services
  • The individual’s treating physician documents in the medical records that to a reasonable degree of medical certainty the individual will no longer require any treatments or medications related to the settling WC injury or illness
  • A Court/Commission/Board of competent jurisdiction has determined, by a ruling on the merits, that the workers’ compensation insurer or self-insured employer does not owe any additional medical or indemnity benefits, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services

In addition, if a payment was made on the claim in error and was later reimbursed, this may be a situation where a zero-waiver WCMSA is appropriate. However, looking at the facts and documentation for each case is the best way to determine whether a zero-waiver WCMSA is right for your claim.

Fallacy: Prior to the recent guidance issued by CMS, claims were being reported to CMS if the claimant had a reasonable expectation of Medicare eligibility within 30 months.

Fact: Only those claims where claimant is a Medicare beneficiary are, and were, reportable per CMS’ Section 111 Reporting guidelines.

The purpose of Section 111 Reporting is for Medicare to collect data to determine if they have paid for injury related treatment that needs to be reimbursed by a primary payer such as a worker’s compensation, liability, no-fault insurer, or self-insured employer. For Medicare to pay for treatment, a claimant must be on Medicare. As such, CMS only requires primary payers to report those claims where the claimant is a Medicare beneficiary. Having a reasonable expectation of Medicare eligibility within 30 months is a WCMSA workload review threshold and not a Section 111 Reporting requirement.

For questions regarding this blog, or for additional information about WCMSA options, please contact the IMPAXX Settlement Consulting team at [email protected].