CMS Key Updates to Section 111 Reporting Summary

By Mark Popolizio, J.D., Jeremy Farquhar

April 17, 2024 / 13 min read

On April 16, 2024, the Centers for Medicare and Medicaid Services (CMS) held its second webinar to further discuss its plans to require Section 111 Responsible Reporting Entities (RREs) to report various workers’ compensation Medicare set-aside (WCMSA) data points as part of its TPOC reporting trigger.^[1]

By way of brief background, under CMS’s forthcoming TPOC/WCMSA reporting process, RREs will be required to report certain WCMSA data points for all TPOCs (settlements) involving Medicare beneficiaries which include a WCMSA. Reporting of the WCMSA data will be required whether or not the WCMSA is submitted to CMS for review/approval and will be required for WCMSAs included as part of a settlement that does not meet CMS’s voluntary WCMSA review thresholds (“non-threshold” WCMSAs). Voluntary testing starts October 7, 2024, with the new reporting requirements starting on April 4, 2025.^[2] This new process is prospective in nature meaning that the reportable WCMSA data points will only be required for coverage reports with TPOC dates April 4, 2025, or later.^[3]

In terms of information released, CMS held its first webinar in November 2023. CMS then issued an Alert dated February 23, 2024 [see our article here] providing additional information, including the data fields to be reported and new Section 111 error codes. CMS then incorporated much of the information discussed in its first webinar and alert as part of its recently released Section 111 NGHP User Guide (Version 7.5). Against this backdrop, CMS held its second webinar regarding this matter on April 16^th .

Summary

As part of its second TPOC/WCMSA webinar, CMS discussed key points related to this new reporting process, such as general requirements, reportable WCMSA data points, related Section 111 error codes, and other information. To a large degree, CMS reviewed its previously released information regarding the key points related to this upcoming process. One item of note, CMS clarified which error codes will be considered “hard errors” versus “soft errors” during this session. CMS also commented regarding how this process may impact Section 111 penalties. CMS made no changes to the start date for voluntary testing (October 7, 2024) or its scheduled go-live date (April 4, 2025).

For a more in-depth overview of these items, and other points discussed by CMS on the webinar, the authors present the following:

Secondary payer objectives

CMS started the session by reminding the attendees that it has established the TPOC/WCMSA reporting process to further enhance its Medicare secondary payer activities, citing U.S.C. 1395y(b)(8)(ii) as its authority to do so.

On this point, CMS in its February 2024 Alert states, in part, as follows: “As previously discussed at the webinar held on November 13, 2023, CMS will be expanding the existing S111 reporting process to capture WCMSA information on all Workers’ Compensation (WC) claims involving Medicare beneficiaries that report settlement (i.e., TPOC). Collection of the information is necessary to assist Medicare in making appropriate determinations concerning coordination of benefits under U.S.C. 1395y(b)(8)(ii), since Medicare should not be a primary payer for future medical services related to a WC injury as specified in the WC settlement as per 42 CFR 411.46. All MSA funding for WC settlements shall be reported regardless of whether or not an approval was previously sought from the CMS.”^[4]

Reportable WCMSA data points

CMS reviewed, in general, its previously posted WCMSA data fields to be reported. CMS announced no changes regarding these data fields. For your reference, CMS lists the new WCMSA data fields to be reported in Section 111 NGHP User Guide (Version 7.5, April 1, 2024), Chapter V, Appendix A, pages A-11 through A-12). Click here to view the new WCMSA data fields to be reported.

Section 111 Error Codes

CMS also reviewed its previously released new Section 111 error codes related to this new process. The new error codes are in Section 111 NGHP User Guide (Version 7.5, April 1, 2024), Chapter V, Appendix G, pages G-65 through G-68. Click here to view the new Section 111 error codes.

As part of this webinar, CMS provided information regarding which error codes are considered “hard errors” versus “soft errors.” Specifically, CMS stated that all new WCMSA related error codes (CW01 – CW12) will be treated as “hard errors” resulting in a rejection of the coverage record submission with one exception. The one exception will be the error code correlating with the Professional Administrator EIN field (Field 43 – Error Code CW09) which will be treated as a “soft error.” In other words, receipt of a CW09 error will not result in an outright rejection of the RRE’s coverage report. However, all other WCMSA related error codes will result in a rejection of the submitted coverage report. This was particularly notable as CMS had not previously specified, via their prior webinar or their subsequent published documentation, whether the newly introduced WCMSA related error codes would be classified as “hard errors” vs “soft errors.”

Voluntary Testing

CMS indicated on the webinar that it is not making any changes to the October 7, 2024 voluntary testing start date. Regarding this item, CMS further noted additional information as follows:

RREs should coordinate any/all testing with their assigned BCRC EDI Representative.
Test files should be submitted utilizing the same submission method which the RRE utilizes to submit their production Section 111 files.
If they wish to do so, RREs may utilize the test beneficiary data which is available for download via the Section 111 COB Secure Website (RREs must be logged into the website in order to access this data).
All test files submitted as of October 7, 2024 will be subject to the new WCSMA related error codes outlined above.

Effective Date/Prospective Application

CMS also stated that it is not making any changes to the April 4, 2025 effective date. Likewise, CMS also stated that no changes were being made to the prospective nature of this process meaning, as noted above, that the reportable WCMSA data points will only be required for coverage reports with TPOC dates April 4, 2025, or later.

Section 111 penalties – impact

CMS also discussed potential for assessment of Section 111 civil money penalties (CMPs) in relation to its new TPOC/WCMSA reporting process. In this regard, CMS indicated that there would be no CMPs directly related to the reporting of the WCMSA data elements. However, they highlighted the fact that a rejection of an RRE’s TPOC filing due to WCMSA related errors could potentially impact CMPs if that rejection prevented the RRE’s coverage record submission from being reported within the one (1) year timely filing deadline outlined via the agency’s CMPs final rule regulations.^[5] Additionally, CMS indicated, as also outlined within the agency’s CMPs final rule regulations, that any untimely TPOC reports resulting from a rejection due to WCMSA related errors would not result in the assessment of a CMP for two full reporting quarters subsequent to April 4, 2025 effective date of the new requirements.^[6] Further, as part of its discussion regarding RREs’ potential failure to appropriately report the new WCMSA data elements, CMS also reminded the attendees of its ability and willingness to pursue instances of non-compliance via other potential recourses, such as the False Claims Act.

Other information

In addition to the above noted items, CMS discussed the following:

Multiple RREs funding a single WCMSA - CMS commented on scenarios where multiple defendant parties/RREs may be contributing to a single WCMSA. In this situation, CMS indicated that each defendant party/RRE would be expected to submit the full WCMSA Amount as opposed to simply reporting the RRE’s own specific contribution to the WCMSA Amount.^[7]

Type of WCMSA does not matter: CMS reiterated that these new reporting requirements apply regarding all TPOCs (settlements) involving Medicare beneficiaries which include a WCMSA. Reporting of the WCMSA data will be required whether or not the WCMSA is submitted to CMS for review/approval and will be required for WCMSAs included as part of a settlement that does not meet CMS’s voluntary WCMSA review thresholds (“non-threshold” WCMSAs). In this regard, CMS reminded the attendees that non-submit and evidenced-based MSAs are reportable under this new process.

No changes to CMS’s current WCMSA review thresholds: CMS also reiterated that there are no changes to the agency’s long-standing WCMSA review thresholds which are utilized for the agency’s voluntary WCMSA review/approval process for WCMSA proposals. However, as noted above, CMS reminded the attendees that the WCMSA data points are required to be reported regardless of whether or not a WCMSA is submitted to CMS for review/approval or is included as part of a settlement which does not meet its WCMSA review thresholds.

Common Working File (CWF): Regarding the CWF, CMS reiterated what it noted during its first webinar on November 13, 2023 that upon receipt of a Section 111 submission containing WCMSA data, the agency will post a WCMSA record to their Common Working File (CWF) database which will prevent Medicare from making primary payments in relation to any ICD codes connected to the WCMSA. CMS also reiterated that, upon creation of the CWF WCMSA record, it would send notification to the associated beneficiary indicating the process for attestation and exhaustion.

Zero Dollar MSA Amount Values: CMS made note of a question received prior to the webinar in which the questioner inquired about how CMS would handle coordination of benefits in a scenario where an MSA Amount is reported as zero dollars. More specifically, the questioner had asked if the report of an MSA Amount of zero dollars would lead CMS to deny payment of claims up through the full settlement (TPOC) amount. In response, CMS indicated that they would not deny payment of a beneficiary’s claims as a result of a zero-dollar MSA Amount submission. However, while CMS indicated that a zero-dollar MSA Amount may be valid, the agency stated that it reserved the right to audit those zero-dollar value submissions.

How Verisk Can Help

For our Section 111 customers, Verisk will be ready to test and properly report the new data elements. Our data specifications are being amended across all our platforms as we speak. We will be releasing these specifications soon via a separate communication by 4/25. We will also be ready to assist our clients when CMS initiates testing in October. To further support our customers, alerts will be added to our platforms to remind customers of the obligation to collect required WCMSA data. As part of this, direct entry portal options will be available to supplement/ augment data collection as an interim or permanent option for clients unable to amend their system and/or data feed in time for the April 4, 2025 go-live date.

In addition, we will offer workflow automation options to facilitate WCMSA data collection, including a settlement document upload feature, that will allow data extraction of the required fields from settlement documents and auto entry into your Section 111 reporting data as either an enhancement to, or in lieu of, any amendment to your claim system or reporting specifications.

Also, in an exciting development, we will offer “automated MSA programs” to facilitate adherence to your internal referral protocols by leveraging data obtained through the Section 111 reporting process to trigger WCMSA report preparation when appropriate. This automation is designed to mitigate risk, save adjuster time, and drive a holistic compliance process to ensure readiness for the reporting change as CMS begins collecting WCMSA data for all Medicare beneficiaries settling workers’ compensation claims.

Questions?

Please contact the authors if you have any question on the above or would like to discuss how Verisk can help you with your Section 111 reporting obligations.

[1] Very generally, the term TPOC as used by CMS stands for “total payment obligation to the claimant.” Very generally, a TPOC is one of CMS’s Section 111 “reporting triggers” and refers to the dollar amount of a settlement, judgment, award, or other payment, in addition to or apart from ORM. CMS’s Section 111 NGHP User Guide, Chapter III (Version 7.5, April 1, 2024), Chapter 6, section 6.4. In general, CMS describes TPOC as a “one-time” or “lump sum” payment intended to resolve or partially resolve a claim. Id. In general, a TPOC is the dollar amount paid to, or on behalf of, the claimant in relation to a settlement, judgment, award, or other payment. Id. TPOC reporting is applicable regardless of whether or not there is an admission or determination of liability. Id. CMS’s Section 111 NGHP User Guide, Chapter III (Version 7.5, April 1, 2025), Chapter 6, section 6.5.1. In addition, reporting under the TPOC trigger is applicable regardless of any allocation made by the parties or determination by the court. Id.

[2]CMS Alert (February 23, 2024), Medicare Secondary Payer (MSP) Mandatory Reporting Provisions Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSES) of 2007, Technical Change Alert: Change to Workers’ Compensation Reporting. See, CMS’s February 23, 2024 Alert.

[3] See, CMS’s Section 111 NGHP User Guide (Version 7.5, April 1, 2024), Chapter III, Section 6.5.1.1. As part of this section, CMS states, in pertinent part, “For workers’ compensation records submitted on a production file with a TPOC date on or after April 4, 2025, Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs) must be reported.” Id. See also, CMS Alert (February 23, 2024), Medicare Secondary Payer (MSP) Mandatory Reporting Provisions Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSES) of 2007, Technical Change Alert: Change to Workers’ Compensation Reporting. See, CMS’s February 23, 2024 Alert.

[4] CMS Alert (February 23, 2024), Medicare Secondary Payer (MSP) Mandatory Reporting Provisions Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (MMSES) of 2007, Technical Change Alert: Change to Workers’ Compensation Reporting. See, CMS’s February 23, 2024 Alert.

[5] Very generally, under CMS’s final rule, CMS may impose a CMP for untimely TPOC and ORM reporting. Specifically, per 42 CFR § 402.1(22)(i), CMS may impose CMPs when the RRE “[f]ails to report any beneficiary record within 1 year from the date of the settlement, judgment, award, or other payment, or the effective date where on-going payment responsibility for medical care has been assumed by the entity.” Id. For more information on CMS’s final rule, see the following resources: Fed. Reg. Vol. 88, No. 195, at 70363-70373 (October 11, 2023), CMS’s October 10, 2023 Alert, CMS’s FAQ resource, and CMS’s January 10, 2024 CMPs webinar.

[6] CMS’s final rule is published at Fed. Reg. Vol. 88, No. 195, at 70363-70373 (October 11, 2023),

[7] Of note, CMS’s instructions on this point are different from general TPOC reporting scenarios (with the exception of those involving joint and several liability) where CMS indicates that each defendant party/RRE would be expected to submit the full WCMSA Amount as opposed to simply reporting the RRE’s own specific contribution to the WCMSA Amount. See e.g., CMS’s Section 111 NGHP User Guide (Version 7.5, April 1, 2024, Chapter III, Section 6.5.1.3. On this point, in reference to TPOC reporting scenarios involving joint and several liability, CMS states in part, “Where there are multiple defendants and they each have separate settlements with the plaintiff, the applicable RRE reports that separate settlement amount. For a settlement, judgment, award, or other payment with joint and several liabilities, each RRE must report the total settlement, judgment, award, or other payment—not just its assigned or proportionate share.” Id. In this respect, while CMS’s guidance in relation to appropriate TPOC Amount reporting would typically dictate that each RRE would be responsible for reporting their own proportionate share, the guidance provided in relation to reporting the WCMSA Amount more closely aligns with their TPOC Amount reporting requirements in scenarios involving joint and several liability where each involved party would be expected to report the full MSA Amount and not just their proportionate share of the MSA funding.

CMS holds its second TPOC/WCMSA webinar – agency discusses key information regarding its new Section 111 reporting process