If you’ve followed us over these last several months, you know the saga of Medicare’s new mandate to report Medicare Set-Aside (MSA) amounts on all workers’ compensation settlements involving Medicare beneficiaries. You also know that guidance from Medicare has left some critical questions unanswered - particularly regarding how CMS may respond to the data it receives. Although the agency has not yet published formal policy, we’ve already started to see activity from CMS and its contractors.  

What’s Happening?

First, it’s clear that CMS and its contractors are closely reviewing the data reporting in the WCMSA fields. We are aware of multiple situations where a Benefits Coordination & Recovery Center (BCRC) Electronic Data Interchange (EDI) representative has contacted companies to verify the accuracy of the reported MSA amounts in these new mandatory reporting fields.

It is not unusual for an EDI representative to contact a Responsible Reporting Entity (RRE) to confirm that the reported data is accurate. For example, it has long been understood that an EDI rep could contact an RRE if a very small settlement of less than $750 was reported, with the goal of ensuring that it is in fact a settlement and not a misreported ongoing responsibility for medical (ORM) claim. However, seeing inquiries about the accuracy of reported MSA amounts has been surprising.

Even more surprising is what follows. We’ve confirmed that CMS will simply terminate its review of a submitted MSA if it receives an electronic report of settlement on that same claim. Medicare will provide no notice to the parties that the review has been terminated. While this may seem logical – after all, CMS review is a voluntary process –the troubling part is the lack of notice to the parties when the settlement might have simply been prematurely reported in error.

Once WCMSA review is turned off, restarting it can be challenging. If the Total Payment Obligation to Claimant (TPOC) is reported on a claim where MSA review was still pending, CMS marks the file as settled without CMS approval. To reinstate the review, parties must escalate the matter internally within CMS’ contractors and contact the applicable Medicare regional office. We have heard – though not yet experienced firsthand - that CMS’ policy is to rescind approvals of reviewed MSAs if the reported MSA amount does not exactly match the amount on the approval letter.

Again, all of this occurs with no notice to the parties involved.  

It’s important to recognize the role that CMS’ reluctance to provide specific, detailed guidance in complex cases plays in these issues. Companies remain unsure about what information should be reported and when. This uncertainty, combined with the threat of substantial civil penalties, fuels over-reporting, and contributes to many of these challenges. We still await substantive policy guidance from Medicare on:

• Global settlements – Whether it’s one settlement to resolve multiple dates of injury or its multiple carriers contributing to a single settlement, CMS has provided not substantive guidance on how to report the MSA fields. Emails from the agency to reporting agents or RREs lack policy authority and thus do not resolve these questions.
  
  
• Partial settlements – Many states allow parties to settle certain medical components, but not all. If a TPOC is reported, an MSA amount must be included. Yet, under the WCMSA Reference Guide, an MSA would be premature until the claim resolves in all respects.
  
  
• Competing policies – The WCMSA Reference Guide and review process contain multiple examples where policy misalignments persist, such settlements, partial medical settlements, waivers, and WC claims involving liability settlements on the same claim.  

Given this uncertainty, it’s not surprising that some companies have reported claims before the MSA process was truly complete. However, it is surprising, and concerning, that CMS would take action on submitted MSAs with absolutely no notice to the submitter or the involved parties.

This is exactly why we are writing this blog. Because CMS won’t tell you this, we are making sure that you are on notice. Our advice when it comes to reporting workers’ compensation settlements is to measure twice and cut once. Ask yourself:

1. Has the case truly settled in all aspects? If you are still waiting on the MSA result to determine the amount of medical that will be paid out, then even if you make a settlement payment consider whether it meets the definition of a full and final settlement or it’s merely an indemnity only settlement. Indemnity only settlements are not reportable as TPOC.
   
   
2. Does the MSA amount match the approved amount? Take care to ensure that the MSA amount that you report matches the amount in the settlement, and that the amount in the settlement matches the amount on the CMS approval letter. If there are differences, ensure you can clearly explain those differences! You are not required to obtain CMS approval, but if you elect to go through with the process, think very carefully before you report data that does not align with the approved amount.
   
   
3. Have I accurately reported the remaining information? While we have yet to see CMS nickel-and-dime information reported as structured settlements versus lump sum, the MSA term, or the amounts reported for structures, we anticipate that day may come soon. . Please take care in reporting this information and report it as accurately as possible.

There’s nothing better in the summer than some sunshine, and CMS could certainly use some clarity of its own. Although we appreciate every inquiry, we receive on the mandatory MSA reporting process, we’d like nothing more than to explain that are advice is based on actual agency guidance and not just our expert opinion. We value our relationship with CMS and its contractors, but we cannot in good faith rely solely upon emails or informal conversations to the extent that they contradict written agency guidance on fundamental issues such as what constitutes a TPOC. All that is to say: stay tuned. Things are getting weird, but we will continue to be here to chronicle each step.

Questions?  Contact ECS’ Medicare compliance experts at mspcompliance@examworkscompliance.com or email Marty Cassavoy at martin.cassavoy@examworkscompliance.com.