The Centers for Medicare and Medicaid Services (CMS) has taken new steps to protect Medicare from paying for medical treatment that should be covered by another payer, such as workers’ compensation. Starting next April, workers’ compensation payers, in their capacity as Responsible Reporting Entities (RREs), must include Worker’s Compensation Medicare Set-Asides (WCMSAs) arrangements in their Section 111 report to CMS.
RREs who have a Total Payment Obligation to the Claimant (TPOC) on April 4, 2025, or later must report WCMSAs through the Section 111 system concurrently with settlement amounts. Payers must provide the MSA amounts — even if zero dollars are allocated for future medical costs.
Section 111 changes for WCMSA Reporting
CMS will add seven reporting fields to gather data on these WCMSAs. The new fields require the MSA amount and how it is being paid out, i.e., in a lump sum or through a structured settlement or annuity. If structured, RREs must provide the initial deposit amount and the anniversary deposit amounts for the MSA. CMS also needs to know the amount of time (months/years) the MSA is expected to cover.
Other new fields include the Case Control Number CMS assigns to the MSAs it approves and the tax identification number for the professional administrator, if one is used.
This new reporting requirement applies to non-submit MSAs as well as CMS-approved MSAs. Currently, if an MSA is not submitted for approval, the agency may be unaware funds have been set aside to pay for future medical costs related to the illness or injury or the amount of those funds. Even with a CMS-approved MSA, CMS cannot coordinate benefits based on the MSA amount until it is told that a settlement has occurred.
The problem with errors
With new fields come new error codes and CMS has laid out the hard or soft classification of these codes. The Section 111 record will be rejected if there is a hard error. If that error is not corrected within one year of the TPOC date, the record will be considered untimely and may be subject to a Civil Money Penalty.
The longer it takes to correct the record, the higher the penalty. These range from $357/per day to $1,428 per day based on how late they are. (These are inflation-adjusted with 2024 rates.)
Things RREs, insurers and other payers need to know
The addition of WCMSA fields for Section 111 reporting presents a technical and training challenge for RREs. Most payer and third-party administrator claims systems do not capture the type of data CMS will require. If claims adjusters currently enter data into Section 111 reporting fields on their claims systems, new fields will need to be added, and adjusters will learn new procedures for entering information into these fields.
Tower is updating our Section 111 reporting sections of our MSP Automation Suite and we are working with our Section 111 reporting clients as they make this transition.
Tower also offers a Section 111 reporting audit service that detects issues in the RRE’s reporting processes that could lead to due to untimely reporting and potential CMPs. Tower’s compliance experts examine a set of claim input and response and query response files and review the organization’s reporting policies and procedures. The audit detects the types of errors, inconsistencies and omissions that hinder compliance and could trigger a reporting penalty.
For information on Tower’s Section 111 reporting service and/or its audit, please contact Hany Abdelsayed, our EVP of Strategic Services at hany.abdelsayed@towermsa.com or 888.331.4941.
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Author’s Bio
Daniel M. Anders, Esq., MSCC, CMSP
Chief Compliance Officer
Tower MSA Partners
Daniel M. Anders, Esq., MSCC, CMSP is an attorney with more than 20 years’ experience helping employers, insurers and other payers navigate the complexities of MSP compliance and settle workers’ compensation claims using Medicare Set-Asides.
As Tower’s Chief Compliance Officer, he oversees all aspects of regulatory compliance associated with the Medicare Secondary Payer (MSP) statutes and local, state, and federal laws. He also consults with Tower’s clients on MSA cost containment and preparation and other MSP compliance issues. Additionally, he ensures the integrity and quality of Tower’s services and products, including its settlement-focused MSA program.
A respected subject matter expert and thought leader, Dan regularly contributes articles to industry publications and to Tower’s MSP Compliance Blog. He has given numerous presentations at conferences, including the National Workers’ Comp, WCI, and the Medicare Secondary Payer Network (MSPN) annual conferences.
Dan earned his Juris Doctor degree from Chicago-Kent College of Law and his bachelor’s degree from Loyola University Chicago. He holds the Medicare Set-Aside Certified Consultant (MSCC) and Certified Medicare Secondary Payer (CMSP) credentials.
Before joining Tower in 2016, Dan served as Senior Vice President of MSP Compliance for ExamWorks Clinical Solutions. He previously gained extensive litigation experience working for the Chicago law firm of Wiedner & McAuliffe.
Dan is a member of the Illinois State Bar Association and MSPN, serving as its president in 2021. He lives in Southeast Wisconsin and can be reached at Daniel.anders@towermsa.com
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