Author: Beth Hostetler
As of April 2025, the new Section 111 reporting requirements mandate the inclusion of MSA data for all workers’ compensation settlements, regardless of whether the voluntary MSA review process with CMS was followed. CMS has indicated that the reported data would be posted with a “W” to each applicable beneficiary’s Common Working File (CWF), thereby preventing the payment of medical services related to injuries described by the diagnosis codes. With this process, the beneficiary will also be provided with written notice outlining the process for attestation and MSA exhaustion.
It is important to consider that CMS will not impose Civil Monetary Penalty (CMP) for two reporting periods after implementation of this change. This change applies to those records with A TPOC date on or after 4/04/2025, so records with a TPOC on or after 10/04/2025 and a reportable MSA are subject to CMP.
What is striking is that CMS has indicated that failure of a Responsible Reporting Entity (RRE) to comply with its reporting obligations may result in CMS utilizing all statutory and regulatory options to recover mistakenly made payments, including bringing an action against the RRE under the False Claims Act.
Given the above, it is clear there is considerable risk for the insured or self-insured entity in not having clear and well-defined processes to assure compliance. The data elements that must be reported include five initial required fields and two optional fields which are:
- MSA Amount: report the actual amount allocated for future medical treatment. If no funds were set aside for future medical care, report “$0. Per CMS on 1/21/2025, the WCRC will no longer review zero-dollar MSA’s. Regardless, you must report zero-dollar MSA’s as part of this process.
- MSA time period: the amount of time in years that the MSA is expected to cover the beneficiary. See MSA life expectancy.
- Lump sum or structured annuity payment indicator. Indicate whether the MSA will be funded in a lump sum or annuity.
- Initial deposit amount. If funded by a structure, what is the initial deposit amount.
- Anniversary (annual) deposit amount: If funded by a structure, what is the amount of the annual payment.
- Case Control Number. If the MSA was submitted to CMS for review, see the CCN assigned. There will be no case control number if MSA was not a part of the voluntary submission process, however, CMS will assign one once the Section 111 MSA data is received by CMS.
- EIN Administrator Number: Tax identification number if an MSA professional administrator is used.
In my experience as a former Director of MSP compliance of a Fortune 500 employer, insurers and self-insureds should prioritize the following considerations:
- Data Collection and Accuracy:
Robust Data Systems: Implement or enhance systems to accurately collect and maintain data on all WCMSAs, including those with $0 amounts, those with a Beneficiary falling below $25,000 in settlement amount, as well as those that are reasonably entitled to Medicare within 30 months, yet the Settlement is less than $250,000.
Data Integrity Checks: Establish stringent data quality checks to ensure accuracy and minimize errors in reported MSA amounts. This may involve cross-referencing data with other internal systems. Ensure MSP compliance data review is assessed as part of supervisory adjuster audits.
Data Mapping: Clearly map MSA data fields to the specific requirements outlined in CMS’s guidelines for Section 111 reporting. This could require initial collaboration with your TPA and reporting agent to ensure all is added to claims system and reporting protocols. Your TPA and Reporting Agent can be instrumental in training staff on these new systems.
- System and Process Updates:
IT Infrastructure: Upgrade IT systems and software to accommodate the new reporting requirements, including the ability to extract and transmit the necessary MSA data to CMS.
Workflow Adjustments: Adjust internal workflows to ensure timely and accurate collection and reporting of MSA data. This may involve training staff on the new requirements and implementing new reporting procedures.
Testing and Validation: Thoroughly test the updated systems and processes before the April 4, 2025 deadline to identify and address any potential issues. Again, this requires close collaboration with your TPA if you utilize one, and your Reporting Agent.
- Documentation:
Maintain thorough documentation to support the reported MSA information, including medical records, settlement agreements, and any other relevant documents.
Document rationale in your internal systems (claim notes) for $0 MSAs or low value MSAs, especially relative to settlement amount. The MSA111 is an excellent way to document the MSA value, as well as to protect the Beneficiary.
I strongly recommend you have a defined, objective, and consistent approach for identifying future medical needs and arriving at a dollar figure in both circumstances. This should be a part of a written protocol of your overall MSP compliance program. This should outline and document your methodology for future medical care, prescription drug allocation and use of and reliance on Evidence Based Medicine. If recommended treatment in the medical records has not been included in the MSA, your MSA vendor partners should document the reasons why and I recommend this information be included in your claim notes. Many vendors have work products especially geared toward these scenarios that can be less costly than the traditional MSA, such as the MSA111. If you do not have processes in place to address these scenarios, I recommend you discuss with your MSA partners to develop a product that can be customized to your specific needs and risk.
- Compliance and Regulatory Awareness:
Stay Informed: Continuously monitor CMS guidance and any updates to the Section 111 reporting requirements. If your Company does not have an internal person solely designated to oversee Medicare compliance, identify a claims professional who communicates regularly with your reporting agent and receives regular reports on Section 111 data and review for compliance and errors quarterly.
Seek Legal and Regulatory Counsel: Consult with legal and regulatory experts to ensure compliance with all applicable laws and regulations related to WCMSA reporting. Your MSA vendor partners can provide this consultation and guidance to you. Expect your MSA partner to provide updates at regular intervals.
Develop a Compliance Plan: Create a comprehensive compliance plan that outlines procedures for data collection, reporting, and auditing to minimize the risk of penalties and ensure accurate reporting.
- Communication and Coordination:
Internal Communication: Clearly communicate the new reporting requirements to all relevant departments within your company.
External Communication: Establish clear communication channels with claimants, attorneys, and other stakeholders regarding the reporting of MSA information.
Adequate Resources: Allocate sufficient resources, including budget and personnel, to support the implementation of the new reporting requirements. This will of course depend on your structure and reliance on your TPA and reporting agent for these services. It is critical though, to have oversight of them as, you, the RRE is ultimately responsible for CMPs. I highly recommend to regularly review and audit their reporting processes to identify and correct any errors.
Training and Development: Provide comprehensive training to staff on the new requirements and the updated reporting processes. I always utilized my MSA vendors to provide regular training on new developments, like this.
By carefully considering these factors, insurers and self-insureds can effectively prepare for CMS’s new Section 111 reporting requirements and ensure accurate and timely submission of MSA data. By prioritizing the above factors, you will mitigate Civil Monetary Penalties and ensure fair and equitable outcomes for injured workers.
