CMS intends to expand its TPOC reporting requirements

By Jeremy Farquhar, Mark Popolizio, J.D.

November 16, 2023 / 10 min read

On November 13^th, 2023, the Centers for Medicare and Medicaid Services (CMS) held a webinar to discuss its plans to require Section 111 Responsible Reporting Entities (RREs) to report various data points related to workers’ compensation Medicare set-aside (WCMSA) arrangements as part of its total payment obligation to the claimant (TPOC) reporting trigger.¹

CMS expands TPOC Full

On November 13th, 2023, the Centers for Medicare and Medicaid Services (CMS) held a webinar to discuss its plans to require Section 111 Responsible Reporting Entities (RREs) to report various data points related to workers’ compensation Medicare set-aside (WCMSA) arrangements as part of its total payment obligation to the claimant (TPOC) reporting trigger.

As outlined more fully below, CMS’s forthcoming plans to expand its TPOC reporting requirements will apply to WC settlements involving Medicare beneficiaries that include WCMSAs, regardless of whether the WCMSA is submitted to CMS under the agency’s voluntary WCMSA review process, or in relation to a non-approved MSA or Evidence based MSA, or in situations where ongoing responsibility for medicals (ORM) continues for some injuries associated with the claim but not others. Further, as explained by CMS on the webinar, reporting will be required regardless of the WCMSA amount, unless the settlement does not meet CMS’s current $750 mandatory TPOC threshold for workers’ compensation claims.² CMS noted that these changes will help Medicare ensure that it is not making payment when there is a WCMSA, regardless of whether the WCMSA is submitted to CMS as part of its voluntary WCMSA review process. Further, CMS noted that these upcoming changes only pertain to workers’ compensation coverages and will not be applicable to no-fault or liability coverages.

As of this time, CMS is tentatively projecting a January 2025 start date for these changes, although the agency stressed that its plans are in a development phase and, accordingly, this estimated start date is subject to change. CMS will provide additional information regarding these upcoming changes in the future and has established a special e-mail address (noted below) to which RREs can submit questions and feedback.

For those interested in a more in-depth overview of the key points CMS discussed on the webinar, the authors outline the following:

Webinar focus points

CMS began the session by stressing that the webinar’s sole focus was to discuss the agency’s plans to expand the Section 111 reporting process to capture information regarding workers’ compensation claims involving Medicare beneficiaries that report TPOCs (settlements) which include a WCMSA. In this regard, CMS stressed that its plans were in an “early involvement” phase. Of note, CMS also emphasized upfront that no information regarding the separate issue of Section 111 civil money penalties (CMPs) would be discussed and that specific webinars related to the agency’s recently released CMPs final rule are being planned for some time in January 2024.

CMS’s new changes will impact WC settlements involving Medicare beneficiaries

CMS noted that its plans to expand the Section 111 reporting process to capture certain WCMSA data points will only pertain to workers’ compensation settlements involving a Medicare beneficiary. During the Q&A, the CMS expanded on this point by explaining that as part of its current WCMSA review process, a submitter has the ability to request a WCMSA review in certain situations where there is a reasonable expectation that the claimant will become Medicare eligible within the next 30 months, submission of WCMSA data via the Section 111 process as part of its upcoming changes would not be possible or expected until/unless the claimant is determined to be Medicare eligible.

In addition, CMS noted that while its longstanding WCMSA submission process will remain optional, the reporting of the required WCMSA data points under its upcoming process will not be optional.

RREs will need to report several different WCMSA data points

As part of the upcoming changes, on the webinar CMS stated that it plans to collect the following data elements via the Section 111 Claim Input File layout:

MSA Amount – This will be the total MSA amount and will be required when reporting a workers’ compensation TPOC where there has been an associated WCMSA established.
MSA Period – This will represent the period of coverage, in years, and will be required in any scenario where the MSA amount is greater than $0.
Lump/ Annuity Indicator – This data element will indicate whether the settlement is being paid out via a lump sum or as a part of a structured annuity and will be required in any scenario where the MSA amount is greater than $0.
Initial Deposit Amount – This data element will only be required for those scenarios in which the settlement is being funded via a structured annuity.
Anniversary (Annual) Deposit Amount – This data element will be required only in scenarios involving a structured annuity. As part of the Q&A session, CMS indicated that in situations where there is a structured settlement/annuity, the Anniversary (Annual) Deposit Amount is expected to be submitted one time with the initial TPOC report and not on an annual basis.
Case Control Number – A case control number is created by CMS when they establish a WCMSA within their internal processes. If a WCMSA has been established via the voluntary process, prior to the Section 111 report having occurred, the RRE will have the ability to submit the associated Case Control Number via the Section 111 report. While this is an optional field, CMS encourages RREs to report it when it may be available as it would be helpful for them in making the connection to the pre-existing WCMSA.
Professional Administrator EIN – This would be the tax ID of the professional administrator in scenarios where a professional administrator is being utilized after the establishment of the WCMSA. This will also be an optional field, but CMS encourages submission of this information, if possible, when applicable.

Reporting will apply regardless of WCMSA type or amount

As part of its upcoming process, CMS stated that RREs will need to report the above data points regarding WCMSAs involving Medicare beneficiaries regardless of whether the WC settlement is reported to CMS through the agency’s voluntary WCMSA review process, or in relation to a non-approved MSA or Evidence based MSA, or in situations where ongoing responsibility for medicals (ORM) continues for some injuries associated with the claim but not others. RREs will be required to submit this data via Section 111 in conjunction with their TPOC reports.

Further, CMS stated that WCMSA data will be required to be reported regardless of the WCMSA value, even if the WCMSA amount is zero.³ On this point, CMS explained that the required data points will need to be reported regardless of whether the settlement meets CMS’s current $25k WCMSA review threshold, which CMS uses separately to evaluate whether it will review a WCMSA proposal. Thus, in other words, the current $25k WCMSA review threshold CMS uses for review purposes, will not apply to the forthcoming Section 111 WCMSA reporting requirements. Rather, as CMS explained, under its upcoming process the WCMSA data points will need to be reported regardless of whether CMS’s $25k WCMSA review threshold is met and whether a WCMSA is submitted to CMS for review. However, as clarified by CMS during the Questions and Answers segment of the webinar, changes related to the new Section 111 WCMSA reporting requirements will not negate the longstanding $750 workers’ compensation TPOC threshold for physical trauma-based claims. These new requirements will apply only to those claims in scope for reporting via the current Section 111 guidelines.

No changes to the Claim Response File layout are planned – but new errors will be introduced

While CMS will collect the above listed data points through the Claim Input File, CMS indicated that no changes are planned regarding the Claim Response File layout. However, CMS noted that there will be new errors (both hard and soft edits) introduced and returned in relation to issues identified with the newly added WCMSA fields. CMS suggested that further details regarding any newly introduced error codes would be relayed via future communications. Here, CMS made it a point to highlight again that all information being provided was part of an early announcement and, as such, not all technical details have been sorted out at this point and that further information would be communicated in the future.

How CMS will use the information

CMS noted that the WCMSA record would be posted to the Common Working File (CWF) database which will prevent Medicare from making primary payments in relation to any ICD codes connected to the WCMSA. Also, CMS noted that notification of the WCMSA would be sent to the beneficiary indicating the process for attestation and exhaustion. Further, CMS noted that once the new changes are implemented within the Section 111 reporting process, CMS will continue to facilitate the longstanding voluntary WCMSA process, as they have in the past, while the data collected via Section 111 will serve to supplement that pre-existing process.

Voluntary testing will be available

CMS indicated it has no plans for special or required testing. However, RREs interested in testing will be able to do so via the standard predefined Section 111 testing process and that RREs would be notified when testing becomes available (currently estimated for Fall 2024, though this is subject to change). RREs were encouraged to coordinate any testing they may wish to perform with their assigned BCRC EDI representative.

CMS’s projected timeframes

CMS provided the following high-level estimates regarding its anticipated roll out of the above changes:

Early 2024 - RREs will be provided with the updated file layout and newly introduced error codes
Fall 2024 - The ability to test the new changes will be made available
January 2025 - Final implementation of the new changes/requirements

Regarding the above, CMS was very careful to note that these dates are tentative and could change.

No changes to existing Section 111 reporting requirements

Of note, as also referenced above, CMS stated that its upcoming changes do not alter standard pre-existing Section 111 reporting requirements, including the $750 TPOC reporting threshold (as defined by CMS). On this point, CMS was careful to note that its pre-existing Section 111 reporting guidelines and reporting triggers remain the same, and that the upcoming changes do not negate or override current guidelines via which reportability is determined.

Submitting questions/feedback to CMS

CMS has established a new e-mail address, S111WCMSA@cms.hhs.gov, for questions and feedback regarding its upcoming changes.

Claims considerations

In the big picture, CMS’s plans to require the reporting of the above noted WCMSA data points can be viewed as a significant expansion of its Section 111 reporting process. The type and scope of the information to be collected will give CMS better visibility into the inclusion of WCMSA arrangements as part of WC settlements to help the agency ensure that, as it noted on the webinar, Medicare is not making payment when there are WCMSA funds available.

It is also significant to note that CMS’s forthcoming reporting requirements will apply to all WCMSAs – including non-approved MSAs or Evidence based MSAs. In this regard, the new requirements seem calibrated, at least in one sense, to provide CMS with greater knowledge about, and visibility into, situations where parties use non-CMS approved WCMSA arrangements. CMS has previously provided policy guidance around non-submit MSAs. It is unclear how CMS, armed with the new WCMSA information, will use this data to scrutinize or question WCMSA arrangements established outside its review process and, if this could raise potential issues for claimants (and potentially other parties) who utilize non-CMS approved WCMSA arrangements per Section 4.3 of CMS’s WCMSA Reference Guide.⁴ While CMS did not reference any such plans as part of this webinar, this will certainly be one of the areas to watch going forward as this new process unfolds and eventually gets implemented.

As for more immediate matters, it will be important to monitor future CMS announcements and guidance as the agency continues to develop its process to capture WCMSA data. The authors and Verisk’s policy team will be monitoring developments and will provide future updates as warranted.

Questions?

Please feel free to contact the authors if you have any questions, or to learn how Verisk can help you with your Section 111 reporting obligations and how our several different WCMSA services can help you reduce costs and improve claims outcomes.

¹ Very generally, under CMS’s TPOC reporting trigger, reporting is required upon claim resolution (or partial resolution) through a settlement, judgment, award, or other payment for cases in which the claimant is/was a Medicare beneficiary as of the TPOC date and where medicals were claimed and/or released, or the settlement, judgment, award, or other payment has the effect of releasing medicals. Under CMS’s current thresholds, WC settlements greater than $750 are required to be reported under the Section 111 reporting process. See generally, CMS’s Section 111 NGHP User Guide (Version 7.3, August 7, 2023), Chapter III, Section 6.4. and CMS’s Section 111 NGHP User Guide (Version 7.3, August 7, 2023), Chapter III, Section 6.4.4.1.

²On this point, it is noted that as part of the presentation used by CMS the agency had a “background” slide which stated, in pertinent part, “data should be submitted for all WC TPOCs, regardless of the TPOC value.” (authors’ emphasis). However, during the Q&A session, CMS clarified that the new reporting requirements being added to the Section 111 process do not override or negate CMS’s preexisting workers’ compensation $750 TPOC Section 111 reporting threshold. In this regard, CMS clarified that the $750 workers’ compensation TPOC threshold for claims involving physical trauma-based injuries will still apply and, hence, per this threshold, physical trauma-based TPOC amounts under $750 do not need to be reported for Section 111 purposes. Thus, in the authors’ view and experience, the point that CMS seemingly intended to make with the verbiage in its slide is that CMS’s longstanding $25k WCMSA review threshold (which pertains to when CMS will review a WCMSA proposal) does not apply to CMS’s forthcoming requirements to report the WCMSA data points referenced above. Thus, to eliminate potential confusion, and to incorporate the clarification provided by CMS during the webinar as noted above, the authors use the verbiage “WCMSA amount” as opposed to the “TPOC Amount.” Further, per CMS statements during the webinar there is no threshold value which will be applied in relation to the WCMSA amount, but that longstanding Section 111 TPOC reporting thresholds still apply. In the authors’ opinion, this is an important point of clarification because, if one were to rely solely on CMS’s presentation slides without the additional CMS commentary provided during the live webinar, this could easily be misinterpreted or misconstrued.

³Id.

⁴As discussed in Verisk’s recent article, in general, CMS as part of Section 4.3 addressed the use of EBMSAs and Non-Submit MSAs. Specifically, CMS, while acknowledging its WCMSA review and approval process is voluntary, stated that it viewed “the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.” See, CMS’s WCMSA Reference Guide, Version 3.9 (May 15, 2023), Section 4.3. As such, CMS stated it “may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.” Id. While CMS did clarify that it may consider and accept evidence that an EBMSA or a Non-Submit MSA funding was sufficient, it has not provided any metrics or guidance regarding how that is evaluated.