Skip To Content

 

Blog

Medicare Insights

 

Through an integrated medical, pharmacy, claims and legal approach, we deliver insights to help navigate the ever‑changing Medicare Secondary Payer landscape.

CMS hosts webinar to discuss WCMSA data for workers compensation reporting

May 13, 2024 · Medicare Insights Team

On April 16, 2024, the Center for Medicare and Medicaid Services (CMS) hosted a webinar to discuss Workers Compensation Medicare Set-Asides (WCMSAs) and Civil Money Penalty (CMP) impacts. The presentation slides may be accessed in the Download section of the What’s New page for NGHP Section 111 reporting. Due to technical difficulties, participants were unable to see the live slide presentation and thus had to rely on audio portion. To compensate for this limitation, CMS hosted a follow up Q&A call on April 25.

Webinar background recap

In order to ensure that Section 111 reporting protects Medicare Secondary Payer (MSP) status pursuant to U.S.C. 1395y(b)(8)(ii), CMS will expand the reporting process to capture WCMSA arrangements.

Any MSA amount that is part of a settlement must be reported to CMS via Section 111 reporting. This can include settlements reported under the voluntary WCMSA process, evidence-based MSAs (EBMSA) or non-CMS-approved MSAs, or situations where Ongoing Responsibilities for Medicals (ORM) is continued for some (but not all) injuries. WCMSA data must be reported on any claim with a Total Payment Obligation to the Claimant (TPOC) value over $0. Reporting begins prospectively with TPOCs on or after the April 4, 2025 implementation date.

Technical details include seven new fields to report WCMSA

  • MSA Amount – dollar amount of the MSA for structured settlements or annuities
  • MSA Period – number of years the MSA is expected to cover the beneficiary
  • Lump Sum or Structured/Annuity Payout Indicator – designates the MSA as a structured/annuity or lump sum
  • Initial Deposit Amount
  • Anniversary (Annual) Deposit Amount – if applicable
  • Case Control Number – case ID for WCMSAs submitted pre-settlement for voluntary review or for non-CMS approved WCMSAs submitted post-settlement
  • Professional Administrator EIN – if applicable.  

In order to ensure that Section 111 reporting protects Medicare Secondary Payer (MSP) status pursuant to U.S.C. 1395y(b)(8)(ii), CMS will expand the reporting process to capture WCMSA arrangements.

Twelve new error codes

Although the structure of the MIR response file will not change, it will include a new “soft” error code (CW09 for EIN Not Found) as the only error code that will not cause the claim record to be rejected.

Error code Error description
CW01 Non-Numeric MSA Amount
CW02 Non-Numeric MSA Period
CW03 MSA Period is required when MSA Amount is > $0
CW04 Invalid WCMSA Payout Indicator
CW05 Non-Numeric Initial Deposit Amount
CW06 Non-Numeric Anniversary Deposit
CW07 Zero Anniversary Deposit Invalid when Structured/Annuity Indicated
CW08 CCN Not Found
CW09 EIN Not Found
CW10 MSA Amount = $0 but WCMSA Detail Information provided
CW11 MSA Amount Provided but TPOC Amount 1 Not Provided
CW12 Deposit Amounts are invalid when WCMSA Payout Indicator = ‘L’

Next steps

It is crucial that Responsible Reporting Entities (RREs) begin to assess resources and systems before incorporating these changes into your MIR reporting since CMS will use all options to recover mistakenly made payments if RREs fail to comply with reporting obligations.

Testing

  • October 7, 2024, testing with CMS will be available.
  • Contact your EDI representative with any questions.
  • Testing data will be available to download from the Coordination of Benefits Secure Web Site (COBSW).

Civil Money Penalties (“CMP”)

With the addition of new “hard” error codes for WCMSA data, this could lead to CMPs if the claim is not immediately accepted and the TPOC is reported late.

CMPs will not be imposed for two reporting periods following implementation of a change. This change applies to those records with a TPOC dated on or after 4/4/25. Records with a TPOC dated on or after 10/4/2025 will be subject to CMP.

Failure to report by an RRE may result in CMPs as CMS will use all options available to recover mistakenly made payments.

April 25, 2024 Q&A session with CMS

CMS responses to TPOC questions

A number of the questions in the CMS Q&A call involved TPOC reporting obligations, which is the focal point of what triggers WCMSA reporting. CMS provided the following insights:

  • The WCMSA reporting requirement only applies to workers’ compensation claims.  There is no WCMSA reporting obligation on liability and no-fault claims.
  • A settlement that is indemnity only (meaning there is no medical component to the settlement) should not be reported as TPOC.
  • In global settlements that include a workers’ compensation claim and a liability and/or no-fault claim, the RRE is required to report the WCMSA amount.  CMS views this as a workers’ compensation reportable settlement even if the liability claim is funding the settlement or there is a nominal workers’ compensation portion. CMS is not concerned with how the settlement is funded.  If the settlement has a workers’ compensation component, the WCMSA information must be reported.  

Additional CMS responses

  • The $750 reporting threshold for workers’ compensation claims only pertains to trauma related claims.  Exposure claims must be reported. 
  • Any “hard” errors in WCMSA Section 111 reporting could lead to a civil monetary penalty (CMP).  Although there will be two cycles of reporting periods where WCMSA hard errors are not subject to a CMP, keep in mind that this applies only to WCMSA reporting. Non-WCMSA reporting errors will not be subject to this grace period of two reporting cycles (six months).  

Optum can help assist with your Section 111 reporting needs

Optum is passionate about helping you with your Section 111 reporting needs and can assist in navigating CMS’ evolving requirements in this area. Optum has been the trusted Section 111 reporting agent for many companies for years.  Our team of Section 111 reporting experts will ensure your compliance needs are met, including identifying and mitigating risk when it comes to civil monetary penalties.  Contact us for more information on how we can help with your Section 111 reporting or other Medicare Secondary Payer compliance needs.  

For additional information, please contact Michael Flower, Optum MSP Compliance Counsel, at michael.flower@optum.com (p) 813-627-2406.


Medicare Blog