On November 13, 2023, the Centers for Medicare & Medicaid Services (CMS) held a webinar on anticipated changes with respect to the potential inclusion of certain workers’ compensation Medicare Set Aside (MSA) information in relation to Sec. 111 reporting. CMS representatives referred to this session as “an early involvement webinar” and that they were “looking to capture insights, issues or concerns the industry may have.”
The webinar was structured with a background on Sec. 111, technical details, anticipated timeframes, and then a question-and-answer segment where various CMS representatives fielded live inquiries from attendees from the stakeholder community. This webinar comes off the heels of CMS finalizing its rule around civil money penalties (CMPs) when an applicable plan fails to meet their reporting obligations.
Quick-Hit What You Need to Know: By January 2025, CMS anticipates expanding the Sec. 111 reporting process to capture information on workers’ compensation claims for beneficiaries that included an MSA, regardless of whether the MSA was voluntarily submitted/approved. The data will be utilized to flag the beneficiary’s Common Working File (CWF) and coordinate benefits post-settlement. Fields will include the MSA Amount, MSA Period (life expectancy covered), Lump-Sum or Annuity indication, Initial Deposit Amount, Anniversary Deposit Amount, and if applicable, the Case Control Number and a Professional Administrator’s EIN/TIN. These new requirements highlight, among other things, the necessity for adherence to post-settlement administration guidelines, the increased visibility CMS will have over MSAs (and risk considerations around CMS’ non-submit policy in Sec. 4.3 of the WCMSA Reference Guide), as well as SEC. 111 reporting changes.
The Medicare Secondary Payer (MSP) statute underwent a significant alteration with Sec. 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007, which requires electronic reporting by applicable plans – i.e., insurance carriers and self-insureds, referred to as Responsible Reporting Entities (RREs). At a very high-level, Sec. 111 requires the following from an RRE: 1) ascertain whether a claimant is a Medicare beneficiary; 2) to report the assumption of Ongoing Responsibility for Medicals (ORM) – most commonly in the context of workers’ compensation and no-fault claims; and 3) to report a settlement, judgment award or other payment (apart from ORM). While Sec. 111 is statutorily mandated, Congress granted the agency authority to specify information applicable to reporting. See 42 USC 1395y(b)(8)(B)(ii). These details are prescribed in CMS’ Non-Group Health Plan User Guide.
The purpose of Sec. 111 reporting is to ensure proper coordination of benefits (i.e., determining primary versus secondary payer responsibility) and facilitating recovery of conditional payments with Medicare’s conditional payment contractors. However, with the pending inclusion workers’ compensation MSA data, CMS will now be able to coordinate benefits post-settlement and have unprecedented visibility into settlements involving MSAs (voluntarily submitted or not).
Expansion of Sec. 111 Reporting to Capture Workers’ Compensation MSA Information
The purpose of this webinar was to cover the forthcoming submission requirement of workers’ compensation MSA data elements associated with Total Payment Obligation to Claimant (TPOC) Sec. 111 reporting. Notably, CMS indicated the submission of MSA TPOC data should be done regardless of whether the workers’ compensation settlement was associated with a voluntarily submitted and approved MSA (i.e., even for non-submit) or if ORM is ongoing for some injuries associated to the claim but not for others.
The MSA Sec. 111 reporting requirements will only apply to workers’ compensation MSAs (and exclude no-fault and liability insurance types). In addition, CMS indicated in the webinar that “data should be submitted for all workers’ compensation TPOCs, regardless of the TPOC value.” On this point, there were questions with respect to the $750 TPOC threshold and CMS clarified there will be no impact to this applicable reporting threshold.
What Data Will Be Collected?
CMS outlined the following data points referenced in the table below:
|MSA Amount||Total MSA Amount||Yes, if WC and TPOC is reported|
|MSA Period||Period of coverage in years||Yes, if the MSA amount is greater than 0|
|Lump/Annuity Indicator||Is the settlement setup as a lump-sum or a structured annuity||Yes, if MSA amount is greater than 0|
|Initial Deposit Amount||Initial amount deposited||Yes, if specified as a structured settlement|
|Anniversary (Annual) Deposit Amount||Amount deposited annually||Yes, if specified as a structured annuity|
|Case Control Number||ID from case that has been established with the WCRC||No|
|Professional Administrator EIN||Tax ID of the Professional Administration Company (if applicable)||No|
Sec. 111 Response File
CMS indicated the following with respect to the Sec. 111 response file (the return file an RRE receives following transmission and processing of data by the BCRC, which contains information on errors found, disposition codes and other MSP information):
- There will be no changes to the Response File Layout
- Errors pertaining to the new MSA information will be returned as new soft or hard edits on the response file
- Additional details regarding these edits will be provided in future communications
Sec. 111 Testing
Regarding testing of the new Sec. 111 MSA data, CMS indicated the following:
- No special testing process is planned
- Testing can be done using the current Sec. 111 file testing process
- Notification will be given when testing can begin
- Coordinate testing with your EDI Representative at the BCRC
What Will the New MSA Data Be Used For?
CMS indicated the MSA information reported via Sec. 111 would be utilized to flag a beneficiary’s Common Working File (CWF) to prevent payment for medical services related to the work-related injuries which were accounted for in the MSA.
By way of background, CMS coordinates benefits post-settlement by flagging a Medicare CWF with a WCMSA marker denoted as a “W” code. The CWF system is used by CMS and Medicare Administrative Contractors (MACs) as a sole data source where MACs and other contractors can verify eligibility and coordinate benefits for approval and payment of claims. See Medicare Claims Processing Manual, Chapter 27 – Contractor Instructions for CWF. Going back to October of 2009, CMS has utilized this “W” code to flag a beneficiaries’ CWF, “in order to prevent Medicare from paying primary for future medical expenses that should be covered by workers’ compensation Medicare set-aside arrangements (WCMSA).” See MLN Matters Number: MM5587.
Post-Settlement coordination of benefits is “…accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted.” See WCMSA Reference Guide, v3.9, Sec. 18.
CMS provided the following with respect to timeframes:
- Early 2024: Updated File Layout / Error Codes
- Fall 2024: Testing Availability
- January 2025: Implementation
CMS encouraged industry stakeholder questions and feedback and to that end, the agency spent the bulk of the webinar fielding questions from attendees. They also provided the following e-mail address to send questions and comments to: S111WCMSA@CMS.hhs.gov.
It’s critical primary payers / RREs have a partner to guide them through these upcoming changes, especially with the backdrop of CMS’s position on non-submit MSAs, the increase in post-settlement risk and recent finalization of Sec. 111 civil money penalties. J29’s Medicare compliance team will be following these policies closely. Please reach out to Shawn Deane at Shawn.Deane@j29inc.com / (617) 435-9711. www.j29inc.com