Diving Into CMS' Upcoming Requirements

In November 2023, the Centers for Medicare & Medicaid Services (CMS) hosted a webinar announcing the expansion of Section 111 Non-Group Health Plan (NGHP) (workers’ compensation, general liability, and no-fault insurance payers/plans) Total Payment Obligation to Claimant (TPOC) reporting to include Workers’ Compensation Medicare Set-Aside (WCMSA) information. At the time, CMS verbally indicated that this was simply a potential expansion. However, it is now confirmed that this new reporting requirement will take effect on April 4, 2025.

CMS has confirmed that WCMSA information should be reported on all workers’ compensation settlements involving Medicare beneficiaries, regardless of whether the Medicare Set-Aside was voluntarily submitted and reviewed by CMS or was a non-submit/evidence-based Medicare Set-Aside. Further, CMS noted during the webinar that submission of WCMSAs to CMS remains a voluntary process, and the upcoming WCMSA reporting requirement does not represent a policy shift with respect to the validity of non-submit / evidence-based Medicare Set-Asides.

This announcement came as a surprise, and many industry stakeholders did not understand why CMS suddenly wished to require the reporting of MSA information for all workers’ compensation claims involving Medicare beneficiaries. At the time of the November webinar, CMS representatives commented that it is not always provided with finalized settlement documents post-settlement confirming WCMSA information even when the WCMSA is approved by CMS. CMS’ intent for expanding reporting is to ensure that all reported WCMSA information is as accurate as possible for coordination of benefit purposes. As such, the upcoming WCMSA reporting requirement will provide CMS with another source to reference basic WCMSA information and coordinate benefits/pay secondary where an MSA is available to pay. CMS has never indicated that this upcoming requirement is in response to the use of non-submit, evidenced-based MSAs.

CMS has stated that the reported information will be utilized by posting a WCMSA record to the Common Working File (CWF) preventing payment of medical services related to injuries described by the diagnosis codes. CMS anticipates sending notification of the reported WCMSA information to the Medicare beneficiary indicating the process for appropriate attestation and exhaustion. CMS currently does this for WCMSAs that go through the voluntary submission process when they are provided with final settlement documents, however, beneficiaries may be surprised by such correspondence, and primary payers/claims adjusters may receive telephone calls from beneficiaries with questions regarding the significance of the reported data.

The seven new data fields to be reported are outlined in the Section 111 NGHP User Guide version 7.5, Appendix A. The new fields require the reporting of the MSA amount, the method of payout (Lump Sum vs. Annuity), and the amount of time the MSA is anticipated to cover. Zero Dollar Medicare Set-Asides must be reported by leaving the lump sum or annuity payout structure (field 39) blank.  Additional fields include the tax ID for professional administrators (if used) and the Case Control Number CMS assigns to an MSA.

These new requirements may strain the current capabilities of claim systems when it comes to the collection and exporting of data. There may also be confusion from claim personnel concerning how to correctly populate mandatory fields. It is recommended that during the testing period, system reporting capabilities are checked, reporting workflows are revised, and claim personnel training on the new data fields is prioritized.

When reporting WCMSA information via TPOC, entering an incorrect value for certain fields (e.g., MSA Amount, MSA Period, Lump Sum vs. Annuity Indicator, Annuity Anniversary Deposit Date, and Case Control Number) will result in a hard error causing CMS to reject the TPOC record. In the event such an error occurs and the NGHP RRE fails to timely correct and re-report the TPOC record, the NGHP RRE will be exposed to civil money penalties due to late reporting.

Errors pertaining to the new WCMSA information submitted will be returned as new soft or hard edits on the Section 111 NGHP Claim Response File according to current processing standards. CMS noted that although the WCMSA reporting implementation date is currently April 4, 2025, CMS will not assess any Civil Money Penalties (CMPs) associated with improper WCMSA reporting for two reporting periods (or six months) after the April 4, 2025 implementation date. This suspension period derives from the Final Rule’s temporary deferment of CMPs where RREs are required to make significant changes to their systems to prepare data for Section 111 Medicare reporting purposes.

CMS indicated that the suspension of CMPs could arise again as CMS continues to update its policies and procedures surrounding WCMSA reporting. More specifically, CMPs would be suspended for two reporting periods so long as the CMS update caused the non-compliance in reporting.

CMS addressed how different types of errors in reporting could impact the imposition of CMPs. For example, when a “hard error” occurs, CMPs could apply if the hard error remains uncorrected because while a report was made, the information would be rejected by CMS. However, on the other hand, a “soft error” would likely not result in CMPs because the information would still be accepted and thus reported timely.

Given that Section 111 reporting only applies to Medicare beneficiaries, the reporting of WCMSA information will not apply to individuals who meet “reasonable expectation” status as defined under the WCMSA Reference Guide. Additionally, there are no changes to reporting of settlements (TPOCs) for no-fault and liability settlements.

The addition of the new MSA data reporting requirements does not change CMS’s stance that the submission of a WCMSA is voluntary. We believe that Non-submit MSA’s will continue to be a valuable tool for claim administrators, and that the new reporting requirements will allow for the correct reporting of all financial considerations made in the settlement of a claim.

Due to the significant policy changes presented by these new reporting requirements we strongly encourage RREs to take advantage of the testing period before these requirements take effect April 4, 2025.