When employers settle worker’s compensation claims with Medicare beneficiaries, federal law requires them to consider Medicare’s potential interests. This may mean obtaining a Medicare Set-Aside (MSA) evaluation, which may require the parties to allocate part of the settlement to cover future statutory medical treatments. The Centers for Medicare and Medicaid Services’ (CMS) goal is to make sure statutory medical expenses are not transferred to Medicare when it deems these expenses are another entities’ responsibility under worker’s compensation.
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act directs insurers and entities to report specific information to Medicare, ensuring benefits are properly coordinated and duplicate payments are avoided. Starting April 4, 2025, employers and administrations must report MSA allocations related to all worker’s compensation settlements involving Medicare beneficiaries (past or present). This reporting will be part of the quarterly Section 111 reporting requirements and includes details about any MSA arrangements, regardless of the settlement amount. This change significantly increases Medicare reporting requirements for worker’s compensation claims and will likely increase CMS’ visibility to future medical expenses and reimbursement requests.
Reports must include the following:
- The total MSA amount
- The number of years the MSA is expected to cover
- The type of funding (lump sum or structured payment)
- If a structured payment is used, the initial deposit and annual payment amounts
Determining whether an MSA is needed and what to include can be a complex process.
