How Three New CMS Policies Impact Workers’ Comp Claims

It is often said that things in life (good or bad) happen in threes. Whether this is true is beyond this author’s expertise. However, when it comes to Workers’ Compensation Medicare Set-Asides (WCMSAs), the financial arrangements to ensure that Medicare does not pay for future medical expenses that should be covered by workers’ comp settlements, this concept is alive and well this year. Specifically, the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicare, recently implemented three new WCMSA policies directly impacting workers’ comp claims handling and settlement practices.

New Reporting Requirements

Up first is CMS’s new Total Payment Obligation to the Claimant (TPOC) reporting requirements regarding WCMSAs (referred to as “TPOC/WCMSA” reporting) as outlined in CMS’s Section 111 NGHP User Guide (Version 8.2, October, 6, 2025), Chapter V, Appendix A. Under this policy, workers’ comp insurers must now report several WCMSA data points around their settlements (“TPOCs”) with Medicare beneficiaries as part of their Section 111 coverage reports with TPOC dates of April 4, or later. The required data points are:

• WCMSA amount
• WCMSA period
• WCMSA funding method (lump sum or annuity)
• Initial deposit amount
• Anniversary (annual deposit amount)

In addition, the WCMSA case control number and professional administrator employer identification number (EIN) are “optional” fields.

The scope of this policy change is significant. For example, these data points must be reported whether a WCMSA is or is not submitted to CMS for approval per its voluntary $25,000 WCMSA review threshold. Significantly, this new policy also applies to settlements that do not meet CMS’s $25,000 review threshold (“low dollar” settlements). Further, the new reporting requirements apply even if no money is set aside (a $0 WCMSA). Of note, $0 WCMSA values are subject to audit by CMS.

Through this new policy, CMS now has unprecedented visibility into an insurer’s WCMSA practices, including whether a WCMSA is submitted to CMS for approval for settlements that meet CMS’s review threshold. Further, CMS now knows whether a future medical allocation was included in a low dollar settlement, as well as when no WCMSA is included. In the big picture, this visibility will aid CMS’s larger efforts regarding coordination of benefits to ensure Medicare’s secondary payer status for future medical services.

Changes to the Amended Review Process

The second update affects CMS’s Amended Review process, which allows parties to request a change to a previously approved WCMSA as more fully outlined in CMS’s WCMSA Reference Guide (Version 4.4, July 14, 2025), Section 16.3. Specifically, effective April 7, the one-year waiting period to file an Amended Review request has been eliminated and parties may now submit an Amended Review submission any time after CMS approves a WCMSA.

Briefly, CMS’s Amended Review allows parties to submit a one-time request to adjust a prior WCMSA approval in certain situations. Amended Review is typically used to reduce a prior WCMSA approval based on a change in circumstances. With this update to CMS’s Amended Review criteria, parties can now request an amendment at any time after CMS approval, as long as:

In the big picture, elimination of the one-year waiting period is helpful as parties can now quickly file an Amended Review request to potentially reduce the WCMSA amount which, in turn, can expedite settlement and reduce open claims costs.

CMS Will No Longer Review $0 WCMSAs

The third CMS update involves a significant policy change regarding $0 WCMSAs as outlined more fully in CMS’s WCMSA Reference Guide (Version 4.4, July 14, 2025), Section 4.2. Specifically, effective July 17, CMS no longer accepts or reviews $0 WCMSA submissions as part of its WCMSA review/approval process.

A $0 WCMSA is typically utilized in scenarios where a workers’ compensation settlement does not include compensation for the need for future medical treatment and therefore, no money is set aside to pay for Medicare covered claims related to the claimant’s injuries post-settlement. Historically, obtaining CMS approval of $0 WCMSAs was difficult for a variety of reasons and therefore, this change will likely be viewed positively. However, some parties may miss having the opportunity to obtain official CMS approval.

While CMS no longer reviews $0 WCMSAs, parties may still use them. However, parties must independently determine the appropriateness of a $0 WCMSA based on the parameters outlined in Section 4.2 of the WCMSA Reference Guide and must maintain documentation supporting that allocation. Generally, as part of Section 4.2, CMS outlines specific criteria when a $0 WCMSA may be applicable based, for example, on medical evidence, court rulings, and other circumstances.

The fact that CMS no longer reviews $0 WCMSAs should not prevent parties from leveraging their use when appropriate. However, evaluating whether a $0 WCMSA is appropriate per CMS’s criteria is appropriate and maintaining supporting documentation will be important, especially since CMS may audit a $0 WCMSA filing per TPOC/WCMSA reporting discussed above.

Going Forward

It is critical going forward to understand how CMS’s updates impact WCMSAs and what changes may be necessary to existing protocols. As part of this reassessment, insurers may also consider the potential role data and automation can play in streamlining compliance practices.

Popolizio is the vice president of MSP Compliance for Verisk Casualty Solutions. He practiced insurance defense litigation for 10 years concentrating in the areas of workers’ comp and general liability. As of 2006, he has focused on working with carriers, self-insured, TPAs and other claims professionals in addressing MSP compliance issues.