As reported in our prior article, in November 2023 the Centers for Medicare and Medicaid Services (CMS) announced plans to require Section 111 Responsible Reporting Entities (RREs) to report various workers’ compensation Medicare set-aside (WCMSA) data points as part of its total payment obligation to the claimant (TPOC) reporting trigger.[1]
CMS has now released a new Alert dated February 23, 2024, which provides additional information on this upcoming process. In addition, this new Alert reflects that CMS’s expected effective date for this change is now April 4, 2025 (originally, CMS had tentatively targeted January 2025 as the implementation date).
CMS’s new Alert is broken down, in general, as follows:
New Process – Focus Points
In relation to this process, CMS 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.”[2]
New Fields will be added to the Claim Input File
As part of this new Alert, CMS advises that new fields will be added to the Section 111 Claim Input File layout using existing filler fields.[3] On this point, CMS states: “[t]he new fields will be situationally required or optional as defined in the layout. Fields will be edited only if the Plan Insurance Type Field (Field 51) equals E and TPOC Amount 1 (current Field 81) is greater than 0.”[4]
CMS’s Alert list these new fields as follows:
- Field 37 – MSA Amount
- Field 38 – MSA Period
- Field 39 – Lump Sum or Structured/Annuity Payout Indicator
- Field 40 – Initial Deposit Amount
- Field 41 – Anniversary (Annual) Deposit Amount
- Field 42 – Case Control Number
- Field 43 – Professional Administrator EIN
CMS provides additional information regarding each of these fields in the new Alert which can be viewed here. These new fields are being added within the filler spaces previously defined as field 37 within the Claim Input File layout. As there are numerous preexisting fields which subsequently follow the newly added WCMSA fields, CMS has indicated that “existing fields will be renumbered as appropriate.”[5] Also, of note, CMS indicates there will be no changes to the Claim Response File layout.
New Error Codes
CMS will be adding new error codes as part of this process which will be returned as new “CW” errors on the Claim Response File. The new error codes outlined in the new Alert can be viewed here.
Effective Date/Prospective Application
As noted above, CMS’s Alert indicates that the upcoming changes will become effective April 4, 2025.[6] Further, CMS has clarified that these changes will be prospective in nature and the new WCMSA related data will only be required for coverage reports with TPOC dates April 4, 2025 or later.[7]
Testing to Start October 7, 2024
CMS advises that testing of the new fields will be made available for RREs beginning October 7, 2024.[8] Further, CMS notes that “records submitted on a test file with a TPOC date on or after October 7, 2024, will be subject to the new edits in the test environment.”[9]
Upcoming Update to the NGHP User Guide
CMS has also indicated that “[t]he information included in this Alert along with additional information will be incorporated into the April 2024 version of the MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting Liability Insurance (Including Self-Insurance), No Fault Insurance, and Workers’ Compensation User Guide.”[10]
Claims Considerations
In the big picture, CMS’s upcoming TPOC/WCMSA data collection process will likely have a significant impact on Section 111 reporting and WCMSA compliance, including the use of non-submit and Evidence based Medicare set-aside arrangements.
Regarding Section 111, as outlined above, CMS’ new process will require RREs to make technical changes to the Section 111 process which involves the addition of seven new WCMSA related data elements. Also, as noted, CMS has added new Section 111 errors associated with these data elements. Further information regarding this process and any required technical changes for current Verisk Section 111 reporting customers will be forthcoming, along with how Verisk MSA clients will benefit from existing system to system automation.
From a WCMSA perspective, an important point to consider is that CMS’s plans to capture WCMSA data points will apply to all WCMSAs – including non-approved MSAs and Evidence based MSAs. As such, CMS will now have better - and unprecedented - visibility into the use of WCMSA arrangements as part of WC settlements. Up until this point, CMS has lacked the ability to know about and track non-CMS approved MSAs or Evidence based MSAs. However, under CMS’s planned changes, the agency will now have, for the first time, greater knowledge about, and visibility into, the use of non-CMS approved WCMSA arrangements.
Accordingly, going forward, it will be interesting to see how CMS, armed with this new WCMSA information, will use this data to scrutinize or question WCMSA arrangements established outside of its review process and, if this could raise potential issues for claimants (and potentially other parties) per Section 4.3 of CMS’s WCMSA Reference Guide.[11] While CMS did not specifically reference such plans as part of its November webinar, it is interesting to note that CMS states the following in its new Alert: “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.”[12] This will certainly be one of the areas to watch as this new process unfolds and eventually gets implemented.
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. In the interim, the Verisk policy team will monitor future developments and provide updates as warranted.
[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.
[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.
[3] Id.
[4] Id.
[5]Id.
[6] Id.
[7]Id.
[8] Id.
[9] Id.
[10]Id.
[11] As 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.
[12] 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.