Workers’ Compensation Archives

Already off to a hot year in WCMSA updates, CMS kicks off Q2 with another round of new information for the Medicare Secondary Payer community. Workers’ Compensation Medicare Set-Aside Reference Guide Version 4.3 published April 7, 2025 serves up the awaited language associated with the Amended Review timeframe elimination, as well as a Change of Submitter of Record process and a Notice of Settlement Received letter template. A summary of the changes are as follows:

Medicare Set-Aside Re-Review: Active, Effective, and Successful!

All the talk these days of CMS eliminating waiting periods for Amended Review of an MSA has cast a shadow on its predecessor – the Re-Review process. If you get a result from CMS and don’t want to bite the one-time Amended Review apple just yet, Re-Review is alive and well and yielding results. This option is available upon receipt of a Centers for Medicare and Medicaid Services (CMS) counterproposal on a submitted Medicare Set-Aside (MSA). While the industry has seen mixed results when filing Requests for Re-Review, Allan Koba has obtained a recent success in this ever-murky area.

A Medicare beneficiary sustained work related lumbar and cervical spine injuries on December 30, 2010. Based on the medical records, a proposed MSA was submitted in the amount of $159,791 including future medical treatment consisting of physician visits, diagnostic testing, prescription medications, physical therapy, laboratory work, cervical fusion with post-operative physical therapy, acupuncture, and injections. Lumbar surgery was not included as in September 2023, the treating orthopedic discussed surgical treatment but indicated he would hold off on surgical intervention and continue conservative treatment. No specific procedure was noted. Further, in July 2024, the treating physical medicine and rehabilitation physician stated lumbar surgery was not medically necessary. Therefore, provisions for lumbar surgery were not included in the future care plan.

CMS issued a counterproposal, approving an MSA in the amount of $269,020. The areas of discrepancy were that CMS included a lumbar fusion with post-operative physical therapy as well as annual urine drug screens. It was subsequently uncovered that Claimant had undergone a lumbar fusion after the proposed MSA was prepared, but prior to CMS submission of the MSA. Allan Koba attorneys issued a Request for Re-Review to CMS, arguing missing documentation existed at the time of submission of the MSA to CMS. The medical records were provided evidencing Claimant had already undergone the lumbar fusion. It was further argued that the inclusion of urine drug screens was not appropriate as none had been conducted or recommended within the last two years. CMS agreed with the Request for Re-Review and issued an updated decision letter approving the MSA for the original submitted about of $159,791.

If you have a CMS approved MSA you believe may be ripe for consideration for a Request for Re-Review, please reach out to Allan Koba Compliance Solutions. Our legal and medical expertise will guide your case-specific needs and walk you through each step of the process. Stay tuned for more updates and feel free to reach out with any Medicare-related questions at info@allankoba.com.

MSA Data: Section 111 Changes – A Guide to the New Reality

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:

In my experience as a former Director of MSP compliance of a Fortune 500 employer, insurers and self-insureds should prioritize the following considerations:

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.

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.

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.

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.

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.

The Zero Dollar Medicare Set-Aside: A Budget-Friendly Mystery

Let’s talk about a little-known gem in the world of Medicare set-asides: the infamous zero dollar set-aside. Now, you might be wondering, “What in the world is a zero dollar Medicare set-aside?” A zero dollar set-aside is when it is determined that, after careful analysis, you don’t need to set aside any funds for future medical expenses related to a workers’ compensation claim.

While it may sound like a punchline, a zero dollar set-aside can actually be a win-win. It signals that the injured party’s future medical needs are either fully covered by other means or simply nonexistent.

However, before you start celebrating with confetti and streamers, remember that this zero dollar magic doesn’t happen for everyone. It requires thorough documentation and a keen eye for detail.

According to the WCMSA Reference Guide, Medicare’s interests must be protected, which means that if a workers’ compensation settlement doesn’t adequately consider Medicare’s interests, the consequences could be dire. Medicare may refuse to pay for services related to the workers’ compensation injury until the entire net settlement amount has been exhausted. Yikes!

And here’s where it gets even more interesting. Starting July 17, 2025, the Workers’ Compensation Review Contractor (WCRC) will no longer accept or review WCMSA proposals with a zero dollar allocation. As if navigating the complex world of Medicare set-asides wasn’t challenging enough, now we have to be extra careful to ensure that any zero dollar allocations are backed by solid documentation.

Just remember to keep an eye on those upcoming changes, because sometimes, the only thing more unpredictable than the world of WCMSAs is… well, your March Madness bracket picks!

If you need a Zero MSA or have questions about one, contact info@allankoba.com today.

Allan Koba Launches MSA111: A Game-Changer for Medicare Set-Asides

Attention all workers’ compensation carriers! Are you ready to revolutionize how you handle Medicare set-asides in nuisance value cases? Say goodbye to the old, cumbersome processes and hello to our innovative MSA111 product, designed specifically to help you plug the gaps and streamline your compliance efforts.

If you’re settling cases with a Medicare beneficiary and your total settlement value is $25,000 or less, the MSA111 is your golden ticket! With the upcoming April 4, 2025 deadline, where CMS will require all workers’ compensation carriers to report MSA values as part of their case, it’s time to act! According to the MMSEA Section 111 reporting requirements, these MSA fields are now mandatory—and we have the perfect solution.

Why spend $2,000 on a Medicare set-aside for a nuisance value case? At Allan Koba, we’re excited to offer our MSA111 product at a reduced rate 🙌 for all clients and prospective clients. With our solution, you can settle with confidence while avoiding the dreaded post-settlement burden shifting to Medicare.

CMS will be monitoring and surveilling post-settlement expenditures of MSAs closely. If the parties simply pick a set-aside number without considering the future life expectancy of the Medicare beneficiary and their treatment needs, the parties may inadvertently shift the burden back to Medicare for post-settlement treatment. Medicare’s legal rights in these situations include investigations under the False Claims Act and potential denial of benefits based on the net total settlement value. Post-settlement benefit denial can be a nightmare for beneficiaries. They must understand what types of treatments Medicare covers in the settlement and how to allocate funds for those treatments. To avoid these issues, Medicare beneficiaries can utilize their MSA111 with their treating providers post-settlement

MSA111s facilitate the resolution of cases while accounting for the legal obligations under the Medicare Secondary Payer Act. By doing so, you can ensure that all parties involved can negotiate without hesitation, knowing that they are protecting their interests.

This is new! Don’t wait until the last minute—get ahead of the April 4 deadline and call us today to discuss our MSA111 product. With Allan Koba Compliance Solutions, you’ll have the peace of mind that comes from knowing you’re doing right by your clients and staying compliant with CMS.

Let’s make Medicare Set-Asides simple and effective—together! Contact Info@AllanKoba.com today to set up a meeting to discuss MSA111s.

iMSAs: A Dangerous Deal, What You Need to Know Before you ‘Buy” in

Indemnified Medicare Set-Asides: A Dangerous Deal for Carriers, Beneficiaries, and Taxpayers

The market for guaranteed Medicare Set-Aside arrangements in workers’ compensation cases remains complex and often opaque. This complexity has unfortunately created opportunities for products promising simplicity and cost savings, but which may carry substantial risks. One such product is the Indemnified Medicare Set-Aside (iMSA). While the concept of an iMSA—an evidence-based estimate of future Medicare-covered medical expenses designed for the purpose of sidestepping CMS review—is appealing, potential downsides require careful consideration. Particularly in a new era of heightened compliance scrutiny in which Medicare will be notified as of April 4, 2025, of not only those iMSA values, but also that the parties chose not to submit them for Medicare’s approval.

iMSAs are frequently marketed as offering certainty in workers’ compensation settlements. The promise: a clear, upfront calculation eliminating CMS review, saving time and money. This is especially attractive in high-stakes settlements. However, this simplicity masks significant risks.

The ongoing emphasis on combating government waste, fraud, and abuse in Washington, D.C., intensifies scrutiny. iMSAs, by avoiding CMS review, could be perceived as a potential burden shift to Medicare, attracting heightened regulatory attention and potential legal challenges. In recent years, Medicare officials have specifically cautioned that non-submit products could be construed as attempts to shift the burden of post-settlement claim related medical treatment payments to Medicare. Historically, Medicare did not receive any iMSA data and was none the wiser. As of April 4, 2025, this changes with CMS now requiring that WCMSA values and other related data be transmitted to them via Section 111 reporting, a powerful statutory obligation. And if an iMSA does exhaust prematurely, the fact that the MSA was never sent to CMS for review may create a presumption of deliberate underfunding.

A critical concern is whether the iMSA provider’s indemnification truly protects all parties. Does it safeguard carriers and Medicare beneficiaries against potential False Claims Act (FCA) lawsuits? An iMSA’s methodology, if later found flawed or intentionally misleading, could result in an insufficient allocation. This exposes both the provider and the parties relying on the iMSA to significant legal and financial risks, including potential FCA liability. This exposure is amplified by the fact that standard errors and omissions insurance, and even legal malpractice insurance, typically do not cover underfunded MSAs resulting from fraud or miscalculation.

Choosing an iMSA provider requires rigorous due diligence. Before committing to a purchase:

In sum, the simplicity and potential cost savings of iMSAs must be weighed against considerable financial and legal risks. The regulatory focus on accountability and transparency makes avoiding CMS review a potentially disastrous decision. Thorough due diligence, including a careful assessment of insurance coverage and legal ramifications, is not just recommended—it is essential—to protect your interests.

To learn more about best practices for Medicare Set-Asides, contact info@allankoba.com.

CMS to Host Workers’ Compensation Medicare Set-Aside Webinar

Following the release of the updated Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, Version 3.5, dated January 10, 2022, we have been waiting for CMS to announce a webinar to discuss the clarification on use of non-CMS approved products to address future medical care that this updated guide contained. According to the Webinar Announcement posted by CMS, additional topics will also be discussed including a summary of what is new in MSAs, addressing questions related to the inclusion of treatment, application of state rules, re-reviews/amended reviews and MORE!

A live Q&A session will follow CMS’s presentation so get your questions ready and tune in on Thursday, February 17, 2022 at 1:00PM EST. The webinar link and conference line information is listed below:

Webinar URL: https://www.mymeetings.com/nc/join.php?i=PWXW2628369&p=6930242&t=c
Conference Dial In: 800-779-1251
Conference Passcode: 6930242

Allan Koba Compliance Solutions will be hosting a series of Webinars this year as well to discuss MSAs, conditional payments, Section 111 and more. Stay tuned for dates and registration information and don’t hesitate to reach out to info@allankoba.com for all your MSP Compliance needs.

CMS Discredits Non-Submits in WCMSA Reference Guide Version 3.5

Whether or not to submit has through the years been touted as the main event at dozens of national conferences and seminars, promoting these sessions like MSP cage-match battles, pitting experts against one another in impassioned debate. Today Medicare put to rest more than a decade of MSP industry contention regarding whether Workers’ Compensation Medicare Set-Asides meeting Medicare’s published review thresholds must be reviewed and approved to establish validity and afford protection to Beneficiaries’ future Medicare entitlements. The decision is in and the answer is yes.

Since CMS review of a WCMSA is not a legal requirement, myriad Medicare Set-Aside products have been introduced to the workers’ compensation industry that allocate future Medicare-covered medical treatment in an effort to consider and protect Medicare’s interests without obtaining formal approval from Medicare. These allocations are usually marketed as protective solutions that save time and money by sidestepping Medicare’s rigid allocating methodology, avoiding lengthy review times and eliminating the risk of unpredictable and unjust outcomes. Common products include Evidence-Based Medicare Set-Asides and Non-Submit MSAs.

And now, so many years later, Medicare weighs in with the knockout punch: “… CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement. As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation…” (emphasis added.)

In its entirety, the update, entitled “4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care” states:

A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.

As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.”

Leaning on federal regulation for support, Medicare’s update plainly sets forth its refusal to pay for claim-related treatment post-settlement unless an approved WCMSA amount is properly exhausted. The alternative to obtaining an approved WCMSA is that exhaustion of the entire net settlement amount must occur before Medicare will make post-settlement claim-related payment. To be clear, the update does not suggest that Medicare will pursue action against primary payers for failure to obtain or fund an approved MSA value; rather, the clarification identifies the Beneficiary’s future entitlements as jeopardized if the net settlement amount is not used in its entirety for payment of claim-related Medicare-covered medical treatment. The referenced federal regulation lends the necessary authority to support Medicare’s position.

The allure of non-submit programs began in the early days of WCMSA review. The review program, initially performed by the CMS regional offices, had a slow start in the mid-aughts, plagued by mysterious allocation practices as well as pricing, allocating and rationale inconsistencies and ruinously long turnaround times. By 2012, approvals were rolling out within 30-90 days, with current times now as quick as two weeks. And with centralized review from a single Workers’ Compensation Review Contractor armed with detailed direction from the Agency, the evolution of methodology has become more and more consistent and straightforward. Additionally, transparency has improved in tandem with industry communication and the willingness of the government to openly exchange information. While not a perfect process, at this point in the lifespan of Medicare Set-Asides, improvements have reshaped the landscape, alleviating many of the concerns that commonly gave rise to consideration of non-submit MSAs.

Historically, the Medicare Set-Aside industry has developed a litany of non-submit products designed for cost-savings throughout the years, including allocations utilizing co-pay and deductible methodology for pharmacy pricing, formerly known as “donut-hole” allocations, as well as Medicare Set-Asides with values backed by “guarantee programs,” or insurance policies, negating the need for formal CMS approval of the allocation.

Is it time to update my Medicare Set-Aside program? Is there any place in my program for Evidence-Based or Non-Submit MSAs? Does my program address the risks associated with Medicare Secondary Payer laws? If you are pondering any of these questions or others, reach out to an Allan Koba Compliance Solutions professional at: info@allankoba.com. Our promise is to deliver effective solutions in a prompt, clear and efficient manner.

And for more information, stay tuned for Michelle Allan and Ciara Koba’s upcoming webinar on this Reference Guide update, coming soon to a WebEx near you…

Updates Abound in 2025 With New WCMSA Reference Guide Version 4.3