Verisk’s Data Driven MSA: A Solution for Low Dollar TPOC/WCMSA Reporting

As most are aware, starting April 4, 2025, CMS will require workers' compensation insurers to report several WCMSA data points regarding settlements involving Medicare beneficiaries as part of Section 111 reporting. CMS's new TPOC/WCMSA reporting requirement is a significant development on the WCMSA compliance landscape and it is critical that insurers understand its larger implications as they prepare for the new changes.

In the author's recent article, we looked at several questions in relation to CMS's new process and various options Verisk's MSA Link service provides in terms of establishing a holistic approach to WCMSAs using Section 111 reporting data, as dictated by specific insurer protocols.

In this article, we present the next question to consider: How are you currently handling low-dollar workers' compensation settlements ($25,000 or less) involving Medicare beneficiaries, given CMS's new process? This question is particularly relevant since the new reporting requirements also apply to these settlements. Further, as outlined in our recent in-depth article, CMS has long stated that its $25,000 WCMSA review threshold is not a compliance safe harbor and has indicated that its interests must be considered in settlements of $25,000 or less involving Medicare beneficiaries. (See CMS's WCMSA Reference Guide, Version 4.1, Section 8).

From the author's experience, most insurers have focused protocols in place around when to obtain an WCMSA on claims that meet Medicare's WCMSA review thresholds. But what about those claims involving a Medicare beneficiary settling for under the $25,000 threshold -- for which WCMSA data will soon need to be reported under CMS's new process. Now that Medicare will have visibility into future medicals, how have you considered approaching compliance on those cases?

Regarding low dollar settlements, in the author's experience, historically there have been three common approaches:

1. Obtain either a traditional or non-submit MSA. While these allocations make sense for claims that meet CMS's review thresholds, obtaining them can be cost prohibitive for claims that are settling for lower amounts such as $5,000 or $10,000. Further, many times, the injured party has had minimal treatment and there may not be sufficient records for a traditional MSA. This can delay settlements and even prevent claims from settling.
2. Leave it to the adjuster to calculate the future Medicare amount on their own. This can be a risky proposition, because, in the author's experience, many adjusters may lack the experience and/or resources to calculate future medical covered expenses or to take on the complicated task of calculating Medicare covered expenses. This leaves open the risk that Medicare may find the allocation (or lack thereof) insufficient.
3. No action - meaning no allocation was included as part of the settlement. However, regarding this approach, going forward it is important to note that a $0 WCMSA report will need to be filed in this instance under CMS's new TPOC/WCMSA reporting requirements. The risk here is that filing a large number of $0 WCMSA reports may raise questions in aggregate with CMS. On this point, CMS as part of its recent Question/Answer session noted it reserves the right to review/audit these types of submissions. Further, keep in mind, as noted above, CMS does not view its WCMSA review thresholds as safe harbors.

In order to address these typical approaches, Verisk now adds an additional option for low dollar settlements in response to CMS's new process called, Verisk's Data-Driven MSA, as outlined in the next section.

Verisk's Data-Driven MSA

Our Data-Driven MSA is a new tool that automates calculation of an WCMSA using the claim's data to determine an appropriate allocation while leveraging Verisk's vast medical, legal, and data science experience, in conjunction with our claims data sources.

Combining our experience and technical capabilities, our Data-Driven MSA can help you address WCMSAs on low-dollar settlements by providing:

• Compliance and claims consistency
• Fast turn-around time
• Cost effective compliance approach
• Support from Verisk's industry leading WCMSA specialist

In addition, our new Data-Driven MSA reviews the claim data to ascertain whether a Data-Driven MSA is right for that particular claim, which facilitates accuracy and limits costs. The Data-Driven MSA also looks at the claim data to identify any potential cost drivers that could push the Medicare portion of the settlement over your thresholds. This means that you will only get a Data-Driven MSA when it makes sense based upon both the facts of the claim and your protocol.

Overall, in comparison to the historical options noted above, our Data-Driven MSA provides a more streamlined and consistent approach to handle TPOC/WCMSA reporting on low-dollar settlements. By providing an accurate, quick, and cost-effective allocation for low-dollar settlements, Verisk's Data-Driven MSA can help you to reduce $0 WCMSA reports on your under threshold cases to help avoid potential CMS scrutiny.

For more information

Please do not hesitate to contact the author if you have questions on TPOC/WCMSA reporting or would like to learn more about how our Data-Driven MSA and MSA Link services can help you.

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