The Centers for Medicare & Medicaid Services (CMS) has released the latest version of the WCMSA Reference Guide. Effective July 17, 2025, CMS will no longer accept or review WCMSA proposals with a zero-dollar ($0) allocation. Entities must now consider specific parameters to determine if a $0 WCMSA allocation is appropriate and maintain documentation to support that allocation.

Key Criteria Outlined in Section 4.2

Section 4.2 of the Reference Guide now specifies when submission of WCMSA is not necessary because Medicare’s interests are already protected. In the past, these situations required the submission of a $0 MSA to CMS for approval, whenever said claim had met submission thresholds. This update now establishes the requirements for when a $0 MSA is appropriate, or more directly when no future medical set-aside amount is needed. These conditions include:

• No Future Treatments Required: The treating physician documents that the individual will no longer require any treatments or medications related to the WC injury or illness.

• Claim Denial: The workers’ compensation insurer or self-insured employer denied responsibility for benefits, made no payments for medical treatment or indemnity (except for investigational purposes), and the settlement does not allocate amounts for specific future or past medical services.

• Court Ruling: A competent court or commission has ruled that the insurer or employer does not owe any additional medical or indemnity benefits, and the settlement does not allocate amounts for specific future medical services.

• Statutory Denial: The workers’ compensation claim was denied within the state statutory timeframe allowed for investigation, and the settlement does not allocate amounts for specific future medical services.

Additional Changes to the Reference Guide

The updated WCMSA Reference Guide also includes changes to the instructions and criteria for evaluating WCMSA proposals, aiming to enhance the consistency and transparency of the decision-making process (Section 9.4.3). Additionally, CMS has corrected the example calculations for Intrathecal Pump, Spinal Cord Stimulator, and Peripheral Nerve Stimulator replacements to more accurately reflect how reviewers will establish related cost projections (Section 9.4.5).

Key Takeaways Moving Forward

At Allan Koba Compliance Solutions, we see several benefits from these changes:

• Streamlined Process: The removal of CMS review of $0 WCMSAs simplifies and accelerates the settlement process, reducing the time and steps needed to ensure Medicare’s interests are properly taken into account. Providing the settling parties greater overall control of the settlement process.

• Enhanced Documentation: An emphasis on thorough medical and claim-related documentation will be needed to ensure that all necessary records are accurate and detailed. This will provide comprehensive evidence to support the decision that no future set-aside is needed and that a $0 MSA is appropriate.

How We Can Help

Navigating the latest CMS updates on $0 MSAs can be complex, but Allan Koba Compliance Solutions is here to simplify the process. Our expertise ensures the accuracy of WCMSA submissions when needed and the compliance of your settlements, to ensure peace of mind for the future. Trust us to guide you through these changes with confidence and precision. Stay tuned for more updates related to the WCMSA submission process and feel free to reach out at any time with your MSP compliance questions.