In a significant policy shift, CMS announced in the January 17, 2025 update to the WCMSA Reference Guide (Version 4.2) that it will no longer accept or review $0 Workers’ Compensation Medicare Set-Aside (WCMSA) proposals effective July 17, 2025. Instead, CMS has provided detailed criteria for when a $0 MSA protects Medicare’s interests, enabling settlements to proceed without CMS review.

Key Changes and Criteria for $0 MSAs

Previously unpublished, the criteria for $0 MSAs are now detailed in Section 4.2 of the WCMSA Reference Guide. Medicare’s interests are considered protected if one of the following is established:

• The individual’s treating physician documents in medical records that to a reasonable degree of medical certainty the individual will no longer require any treatments or medications related to the settling WC injury or illness; or
• The workers’ compensation insurer or self-insured employer denied responsibility for benefits under the state workers’ compensation law and the insurer or self-insured employer has made no payments for medical treatment or indemnity (except for investigational purposes) prior to settlement, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future or past medical or pharmacy services as a condition of settlement; or
• A Court/Commission/Board of competent jurisdiction has determined, by a ruling on the merits, that the workers’ compensation insurer or self-insured employer does not owe any additional medical or indemnity benefits, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services; or
• The workers’ compensation claim was denied by the insurer/self-insured employer within the state statutory timeframe allowed to pay without prejudice (if allowed in that state) during investigation period, benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services.

Until now, the above parameters were known to MSA submitters based on their knowledge of the $0 MSA submission process but had never been published. CMS has now published the parameters as a guideline for when a $0 MSA can be used in settlement while still protecting Medicare’s interests.

Why Is CMS Eliminating $0 MSA Reviews?

CMS has stated that reviewing $0 MSA allocations provides little benefit to the Medicare Trust Fund, as these cases do not allocate funds for future medical care. Eliminating these reviews simplifies the process while maintaining Medicare’s protection under the outlined criteria.

Implications for Settling Parties

1. Streamlined Settlements: Without the need for CMS review, parties can rely on the clear criteria in Section 4.2 to proceed with settlements confidently.
2. Policy Revisions Needed: Organizations requiring CMS approval for MSAs must update their policies to allow for $0 MSA allocations without submission.
3. Expert Guidance More Critical: With no CMS approval process, ensuring compliance through expert analysis and documentation is essential.

FAQs About the $0 MSA Policy

1. Can $0 MSAs still be submitted before July 17, 2025?
   Yes. The standard review process will remain available, including the issuance of development letters and determinations, until this date.
2. Is CMS approval required if the criteria for $0 MSAs are met?
   No. The CMS review process remains voluntary. Section 4.2 criteria are already in effect and do not require CMS approval if fully documented.
3. How does this policy affect Section 111 reporting?
   As of April 4, 2025, settlements with $0 MSAs must be reported to CMS. However, CMS will not flag Medicare beneficiaries’ files for injury-related care in these cases unless later determined to be non-compliant.
4. Will Tower MSA Partners continue offering $0 MSA services?
   Yes. While as of July 17, 2025, we will no longer submit $0 MSAs for CMS review, our detailed reports remain critical for documenting and supporting these allocations. Our expertise ensures compliance with CMS guidelines and a smooth settlement process.

Additional Updates in the WCMSA Reference Guide

• Preference for Treating Physicians’ Plans: CMS clarified that while evidence-based medicine is reviewed, treating provider recommendations take precedence when there is a conflict.
• Corrections to Stimulator Replacement Costs: A mathematical error in Section 9.4.5 regarding spinal cord stimulator and peripheral nerve stimulator replacements was corrected.

At Tower MSA Partners, we understand the importance of this change for payers and settlement processes. While the removal of CMS review for $0 MSAs may seem challenging, it offers an opportunity to simplify and expedite settlements.

For questions or tailored guidance on your cases, contact our Chief Compliance Officer, Dan Anders, at 888.331.4941 or daniel.anders@towermsa.com.

We’re here to help you navigate these changes with confidence and compliance.