In November, CMS’ Drug Benefit and C & D Data Group published a memo that materially alters the intersection between Part D prescription drug plans and CMS-approved Workers’ Compensation Medicare Set-Asides. As of February 2026, CMS started providing Part D plans with up to 12 National Drug Codes (NDCs) associated with CMS-approved WCMSAs, along with the CMS Case Control Number associated with the submitted MSA. That data now enables Part D plans to identify prescription drugs that CMS believes should be funded through a WCMSA rather than through Medicare Part D.
What will Part D plans do with this information? CMS has been blunt – Part D plans can now choose to either conditionally pay for the drugs and seek reimbursement from the WCMSA administrator or “introduce prior authorization requirements and implement beneficiary-level point-of-sale edits identified for that enrollee’s WCMSA.” This means that beneficiaries could run into trouble getting prescriptions when they have a CMS-approved MSA. Let’s walk through the types of cases that are impacted, the types of cases that are not impacted, and the ill-considered logic that led to this update.
The only claims that are impacted by this update are beneficiaries with Medicare set-asides that were submitted to CMS for review, approved by CMS, and where an NDC number is supplied by CMS to the Part D plan sponsor. CMS instructs Part D sponsors that they “should identify a drug using the NDC found in the MBDOHIMO file and apply the relevant point-of-sale edits to all NDCs corresponding to that drug’s RxNorm ingredient.” In plain language, if gabapentin appears in an approved WCMSA, CMS expects that the sponsor take action on gabapentin. It need not be the specific NDC listed – as long as it’s gabapentin.
There are two basic problems with this guidance. The first, and most obvious, is that a prescription drug regimen is often the most fungible part of a claimant’s clinical regimen. Drugs can be swapped out frequently and certain drugs are only meant to be used over a short period of time. Also, just because one drug works for one reason today, doesn’t mean that in five or ten years that claimant won’t have been switched off of that allocated drug and then back onto that drug for a completely different purpose.
Disrupting Treatment
What does this all mean? Perhaps more than anything that CMS has ever done, this guidance has the potential to yield improper point-of-sale denial of care for claimants with CMS-approved WCMSAs. Recall, CMS’ WCMSA review process typically locks a claimant into their most recent prescription drug regimen for their entire life. While this is not clinically appropriate under almost any circumstance, the logic that CMS has always supplied is that a person may swap drugs eventually, but they will still need a way to fund that future unknown prescription. These changes turn that logic on its head and create a presumption that a person will never alter or adjust their drug regimen.
CMS instructs plan sponsors to “arrange with the pharmacy to provide a notice informing the enrollee of their right to request a coverage determination from their plan. When processing coverage determinations and appeals related to such claims, in order to minimize potential disruption in therapy, CMS expects sponsors by the WCMSA administrator or enrollee that the requested drug is not related to the workers’ compensation injury as sufficient evidence.” In other words, if a beneficiary runs into trouble getting their drugs paid for by their Part D plan, they will at a minimum have paperwork to fill out.
It’s important to point out that there are already clear guidelines and annual attestations required in WCMSA administration. While the majority of WCMSAs are self-administered by claimants, tracking expenditures and filing attestations is complicated. Claimants that have elected professional administration will certainly have a leg up on those who have chosen to self-administer their WCMSAs.
Odd Incentives
Because this only applies to CMS-approved WCMSAs, this sets up an odd disincentive to submit WCMSAs to CMS for review and approval. Medicare beneficiaries who elect to submit their WCMSA could be subject to point-of-sale denials when they go to fill their prescriptions. On the other hand, if the parties elect to not submit an otherwise review-eligible WCMSA, the beneficiary will not be subject to a point-of-sale denial. CMS has no means to track NDC numbers unless a proposal is submitted to CMS for review and approval. This distinction creates meaningful strategic implications.
Submitting a WCMSA proposal for review and approval is optional. The last two years have seen a drop in the volume of submitted MSAs, an increase in the amount recommended by CMS, and an increase in the delta between WCMSA proposals and the amount ultimately approved by CMS. Nitpicky development requests, $400 an hour physical therapy, and shaky rollout of the mandatory WCMSA reporting process have all limited the incentive to submit a case to CMS for review and approval.
In releasing this policy, CMS has provided further disincentive to submit. CMS will always know the amount that parties set aside in a Medicare beneficiary’s workers’ compensation settlement. But only those beneficiaries whose claims have been reviewed and approved by CMS could face the challenge of a point-of-sale denial at the pharmacy. It will be interesting to see if these changes further erode the industry’s willingness to follow recommended agency policy and trust CMS’ review process to get it right. As MSP compliance continues its policy change transformation, this new policy raises a critical question: Are we moving toward better coordination or toward greater friction at the point of care?