New Section 111 NGHP User Guide (Version 7.8) – CMS adds new section regarding WCMSAs

The Centers for Medicare and Medicaid Services (CMS) has released an updated Section 111 NGHP User Guide (Version 7.8, December 6, 2024) regarding Section 111 reporting related to non-group health plans (NGHPs) (liability, no-fault and workers' compensation).

As usual, CMS lists the new updates in the beginning of each User Guide chapter in a "Summary" page. Reviewing these pages indicates that updates were made to Chapter III (Policy Guidance) and Chapter IV (Technical Information). In general, CMS has added a section to each Chapter providing information regarding Workers' Compensation Medicare Set-Aside (WCMSA) arrangements.

The below provides an overview of the changes made in NGHP User Guide (Version 7.8), along with practical consideration points as follows:

Summary

As part of updates, CMS has added a new section in Chapter III and Chapter IV titled: "6.4.4.1 Workers' Compensation Medicare Set-Aside Arrangement (WCMSA)."

CMS's new Section 6.4.4.1 states in full:

A Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) is a portion of the total workers' compensation settlement or TPOC allocated for future work-injury-related medical expenses that are covered and otherwise reimbursable by Medicare ("Medicare covered"). The amount of a WCMSA may range from $0 to the full value of the reported TPOC. All future medical expenses related to a workers' compensation injury that are claimed and released by the workers' compensation settlement and that are Medicare-covered items and services must be included in the WCMSA. The amount of the WCMSA may be $0 under certain circumstances, such as when there is no need to fund future medical care because the settlement is only for past medical care. Please refer to Section 4.2 of the WCMSA Reference Guide for more information about where a WCMSA is not necessary. WCMSA amounts may be approved through CMS's voluntary WCMSA review process or determined through other means. Regardless of how the amount was determined, the WCMSA funds must be appropriately exhausted before Medicare will resume payment for care related to the underlying injury or illness. Note: For any settlement reached on or after April 4, 2025, NGHP RREs are required, as part of their Section 111 reporting obligations, to report the amount of any WCMSA created as part of a workers' compensation settlement. More information regarding WCMSAs can be found at this link: https://www.cms.gov/medicare/coordination-benefits-recovery/workers-comp-set-aside-arrangements. Information specific to CMS's voluntary WCMSA review process can be found in the WCMSA Reference Guide found as a download at that address. CMS's Section 111 NGHP User Guide (Version 7.8, December 6, 2024), Chapters III and IV, Section 6.4.4.1.

Overall, this new section can be viewed as CMS connecting the upcoming mandatory TPOC/WCMSA reporting obligations with CMS's policy related to its voluntary WCMSA program. In general, the information contained in this new section refers to and incorporates key language from its WCMSA Reference Guide into Section 6.4.4.1 of the NGHP Section 111 User Guide. For example, as part of this new NGHP User Guide section, CMS, in part, defines what a WCMSA is and notes that the amount of a WCMSA "may range from $0 to the full value of the reported TPOC."^[1] Regarding the potential applicability of a $0 WCMSA, CMS refers the reader to its long-standing Section 4.2 of its WCMSA Reference Guide for more information about when a WCMSA may not be necessary as more fully noted in the endnote to this sentence.^[2] From another angle, CMS notes that WCMSA amounts may be approved by CMS as part of its voluntary review process, and that regardless of whether CMS approves an WCMSA proposal, "the WCMSA funds must be appropriately exhausted before Medicare will resume payment for care related to the underlying injury or illness," which is also information CMS notes in its WCMSA Reference Guide.^[3]

Also, CMS reminds the reader that as of April 4, 2025, NGHP RREs are required to report the amount of any WCMSA in relation to all TPOC dates April 4, 2025, or later as part of its upcoming Section 111 TPOC/WCMSA reporting obligations. See our prior article to learn more about these new reporting requirements. Finally, CMS provides the reader with a link to its WCMSA informational web page as part of new Section 6.4.4.1.

Potential impact and considerations

As noted above, CMS directly incorporates certain key language and guidance from its WCMSA Reference Guide into its new Section 111 reporting requirements. In this regard, it is interesting to consider whether the inclusion and use of an MSA in workers' compensation settlements is voluntary. On this point, the language in NGHP User Guide Section 6.4.4.1 seems to suggest that RREs must populate the MSA amount with something greater than $0.00 if future medical treatment is being compensated for in the settlement. Specifically, the new language states that the report of $0.00 "may be applicable" in certain circumstances and cites to Section 4.2 of the WCMSA Reference Guide "for more information about where a WCMSA is not necessary."^[4]

In looking at Section 4.2, this section lists only three scenarios where CMS states that a "WCMSA is not necessary" as follows: "(a) The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement); (b) There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare's detriment; and (c) The individual's treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury."^[5]

Additionally, as part the new Section 6.4.4.1, CMS added an additional nuance which is not found in the WCMSA Reference Guide. Specifically, Section 6.4.4.1 states "[a]ll future medical expenses related to a workers' compensation injury that are claimed and released by the workers' compensation settlement and that are Medicare-covered items and services must be included in the WCMSA."^[6] (authors' emphasis)

In this regard, the language "claimed and released" is notable because it encompasses both accepted and denied injuries, a consideration that TPOC does not distinguish for the purposes of conditional payment recovery. However, the allocation and use of MSA funds are different. Even in CMS's voluntary approval process, CMS will not generally allocate treatment for wholly denied conditions. The fact that CMS intends to mark the common working file with a WCMSA record but does not capture accepted versus denied injuries within the proposed WCMSA/TPOC data fields may result in Medicare's subsequent denial of payment for Medicare covered treatment associated with denied injuries post-settlement.

Questions?

Do not hesitate to contact us if you have any questions regarding the above, or to learn more about Verisk's unique Section 111 reporting and compliance services, such as our MSA Link that can you assist in improving your WCMSA compliance practices given CMS's new TPOC/WCMSA reporting requirements.

[1] CMS's Section 111 NGHP User Guide (Version 7.8, December 6, 2024), Chapters III and IV, Section 6.4.4.1.

[2] CMS's Section 111 NGHP User Guide (Version 7.8, December 6, 2024), Chapters III and IV. Of note, Section 4.2 of the WCMSA Reference Guide states, in full, as follows: Submitting a WCMSA proposed amount for review is never required. But WC claimants must always protect Medicare's interests. A WCMSA is not necessary under the following conditions because when all three are true, they indicate that Medicare's interests are already protected: (a) The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement); (b) There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare's detriment; and (c) The individual's treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.

In addition, if a settlement leaves WC carriers with responsibility for ongoing medical and prescription coverage once the settlement funds are fully spent, then a WCMSA is not necessary.

Notes:

• If Medicare made any conditional payments for WC injury-related services furnished prior to settlement, then Medicare will recover those In addition, Medicare will not pay for any WC injury-related services furnished prior to the date of the settlement for which it has not already paid.
• CMS will not issue "verification letters" stating that a WCMSA is not
• CMS' voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers' Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that Without CMS' approval, Medicare may deny related medical claims or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment.

CMS's WCMSA Reference Guide, Version 4.1 (August 1, 2024), Section 4.2

[4] CMS's Section 111 NGHP User Guide (Version 7.8, December 6, 2024), Chapters III and IV, Section 6.4.4.1.

[5] CMS's WCMSA Reference Guide, Version 4.1 (August 1, 2024), Section 4.2

[6] CMS's Section 111 NGHP User Guide (Version 7.8, December 6, 2024), Chapters III and IV.

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