“Navigating the Web of MSAs in Workers’ Comp Settlements” 

Swift Currie attorney Jeff Stinson authored an article for Claims Journal providing advice on, “Navigating the Web of MSAs in Workers’ Comp Settlements.”

As the workforce ages, the number of individuals eligible for Medicare has risen, leading to an increase in workers’ compensation claims involving Medicare. Recent changes to reporting requirements by the Centers for Medicare & Medicaid Services (CMS) have created new challenges for insurance companies.

While Medicare Set-Asides (MSAs) are not required to be submitted to the CMS, even when a settlement involves a Medicare beneficiary, many insurance companies prefer this approach. Submitting an MSA ensures that the agency will manage any additional costs beyond the amount designated for the approved MSA.

Although this practice offers potential cost benefits, it also presents significant risks. CMS evaluates the medical care at a single point in time rather than as care progresses, does not honor state laws that limit the treatment period for injured workers, and provides no official mechanism to appeal its decisions on MSA submissions.

Beginning in April 2025, CMS will require all settlements involving Medicare beneficiaries to be reported, regardless of the settlement amount. Additionally, settlement agreements must include details about who prepared the MSA and various other related data.

“It is unknown why CMS has changed the reporting requirements, but the speculation is that it is trying to get more data on MSAs and how prevalent the nonsubmit process is, which could lead to it embracing that option or, more likely, trying (again) to end it,” Stinson reasoned. “For this reason, the next several years will certainly be an interesting time for those handling workers’ compensation claims, especially those involving older workers.”

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