MSP Compliance Blog

Expert summary, analysis and recommendations on issues impacting Medicare Secondary Payer compliance.

CMS Clarifies Policy on Non-Submit MSAs in Updated Reference Guide

Posted on March 22, 2022 by Daniel Anders

The January 2022 addition of Section 4.3 to the CMS WCMSA Reference Guide that discussed the agency’s treatment of non-submit Medicare Set-Asides caused quite a stir throughout the MSA industry and raised many questions for those who use non-submit MSAs in workers’ comp settlements.  A February CMS webinar addressed some of those questions and we now have an update (Version 3.6) to the CMS WCMSA Reference Guide that modifies and clarifies this section.

Revisions to Section 4.3

Below is a breakdown of the revisions to Section 4.3 along with comments.

More general language around non-submit MSAs

The original language called out certain MSA products as indemnifying:

“A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries.”

The new language is more general:

“A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide.”

Comment:  The original language took aim at MSA indemnification agreements where the new language is broader and includes any product that addresses future medicals. It also reiterates that the CMS MSA review process is voluntary. This was likely in response to people who said that CMS’s original policy changed the MSA review process from voluntary to mandatory.

 ‘May’ instead of ‘Will’ Deny

 CMS’s original policy said that it “will” deny payment of medical services up to the total settlement amount whereas the revised policy indicates CMS “may at its sole discretion” deny payment.

Comment:  It appears that CMS is giving itself wiggle room depending on the circumstances of an individual case.  Also, as is further explained below, CMS has given itself the option to accept less than the entire settlement amount as sufficient to protect its interests.

Total Settlement Definition

The original Section 4.3 defined total settlement as “total settlement less procurement costs.”  This was now revised to define total settlement “as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments.”

Comment:  Section 10.5.3 is CMS’s longtime definition of “total settlement.” It makes sense that the definition of total settlement in the non-submit context should align. CMS also acknowledges that besides procurement costs, payment of conditional payments from the settlement amount should also be deducted from the amount of the settlement available to pay for future medical.

Post-MSA exhaustion review

When released in January, Section 4.3 provided no option for CMS to acknowledge the non-submit MSA as sufficient. The updated policy now says, “CMS will ignore the non-submit MSA and use the total settlement amount (minus procurement costs and paid conditional payments) as the amount available to pay future medicals “unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.”

Comment:  It will be the Medicare beneficiary’s responsibility, or someone working on their behalf, to demonstrate that the MSA was sufficient at the time of settlement and that the MSA funds were spent appropriately.  We can assume that CMS will use the standards found in the WCMSA Reference Guide and its MSA Self-Administration Guide to make its determination. If CMS finds either that the MSA was insufficiently funded or inappropriately utilized, does the Medicare beneficiary have a right to an appeal? Medicare beneficiaries have a right to appeal a denial of payment for medical care. Presumably, that right extends to the context of a non-submit MSA, but it remains unclear how this would play out in practice, and CMS did not address it here.

Policy start date:  Per CMS, Section 4.3, “shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare
does not make payment during the spend-down period.”

Comment:  Before the January date, there was no obligation to notify CMS of a settlement that includes the use of a non-CMS-approved MSA product (Yes, there is a Section 111 reporting responsibility, but that does not include notification of a non-submit MSA). Is there an obligation now? Nothing in Section 4.3 affirmatively states such an obligation exists and there is no statutory basis that provides for such notification.

Under threshold MSAs:  CMS says “CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.”

Comment:  Again, by saying it does not expect notification where thresholds are not met, CMS implies that they do expect notification when a non-submit MSA is used and thresholds are met. Why would CMS expect no notification on an under-threshold MSA? I suspect there are two reasons:

  • If a claimant is a Medicare beneficiary with a settlement of $25,000 or less, CMS expects that the MSA is a low-dollar amount and not worth the time it takes to coordinate its benefits.
  • If a claimant is not a Medicare beneficiary but has a reasonable expectation of Medicare eligibility within 30 months and the settlement is $250,000 or less, CMS cannot track the claimant as they are not yet a Medicare beneficiary.

Summary comments on Section 4.3 revisions

CMS should be credited for quickly addressing several of the questions and concerns that arose from the original Section 4.3 language. The revised section backs off the seeming implication that the mere use of a non-submit MSA represents a potential cost shift to Medicare. With that said, CMS reiterated that if the non-submit MSA exhausts, then it must be demonstrated that the MSA was sufficiently allocated at the time of settlement and the funds properly expended. As we do not know how this policy will play out in practice, the non-submit MSA route continues to present a notable risk to the claimant Medicare beneficiary.

Other CMS Updates to WCMSA Reference Guide

Beyond Section 4.3, CMS also made updates to other sections of the guide:

Section Most Frequent Reasons for Development Requests

CMS added language to this section around documentation required for disputed cases, in other words, $0 MSAs for denied claims. CMS stated that medical records are required even when the parties are in dispute. Further, draft or final settlement agreements and court rulings are required documentation if they exist.

Comment:  CMS has required the above for quite some time.  This is just putting the requirements into the reference guide.

Section 16.1 Re-Review

CMS added the following to its re-review criteria:

 “Should no change be made upon response to a re-review request (i.e., no error was identified), additional requests to re-review the same error will not be entertained. “

Comment:  Tower has on occasion gone back and forth with CMS on arguments to remove a certain treatment or medication from the MSA. This new statement implies that once CMS makes its decision regarding a particular item it will not entertain other arguments.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or


Cyber Concerns Rise in the Wake of Russia’s Invasion of Ukraine

Posted on March 11, 2022 by Tower MSA Partners

Cybercriminals love pandemics, natural disasters, and wars. Global distractions are good for their business.

Russia’s invasion of Ukraine elevates cyber security risks, which were already on the minds of global business leaders. So far, the incursion has delivered new distributed denial of service (DDoS) attacks and a novel malware, Hermetic Wiper.

While most attacks have targeted Ukraine’s government, infrastructure, and financial services, US companies need to be on guard against spillover and direct attacks. The US/British-owned insurance broker AON was attacked on February 25. Although no direct connection has been reported, this was one day after the invasion.

But business leaders around the world did not need a war to stir their anxieties about cyber-attacks. The Allianz Risk Barometer, which surveys over 2,650 risk management experts around the world, identified cyber risk as the number-one threat to global businesses for 2022.

That means companies worry more about potential data breaches, ransomware attacks, and major IT outages than supply chain disruptions, COVID-19, or natural disasters. The second highest-rated concern was a business interruption, which can result from a catastrophic cyber-attack.

Not being able to provide products and services on time or–at all–is a frightening prospect. Business interruptions can have long-lasting, and for some companies, fatal impacts.

Tower’s commitment to business continuity relies on our powerful cybersecurity system and exacting protocols. These include the installation of anti-malicious software and its updates, the use of multi-factor authentication (MFA), VPNs, and real-time, 24/7 monitoring to detect and mitigate cyber intrusions. In addition, our employees receive extensive cybersecurity training and understand how to do their part to prevent breaches. We invest considerable time, thought, effort, and money to secure our data and our clients’ data.

Because data transfer presents a vulnerability, we also have a Vendor Risk Assessment Process for all third parties that can access Tower’s data, networks, and servers. In a digital age, companies need to be as concerned about their partners’ cybersecurity practices as they are about their own.

Hopefully, the war in Ukraine will not provoke massive cyber-attacks, but now is the time to secure your perimeters. To help you tell if your organization is as cyber secure as it can be, here’s a checklist gleaned from our partner, Palo Alto Networks, and the Shields Up site from the US government’s Cybersecurity & Infrastructure Security Agency (CISA).

  • Implement multi-factor authentication on your accounts.
  • Lockdown your network. Disable all applications, ports, and protocols that are not essential to operations.
  • Ensure software is up to date
  • Reinforce employee training, especially regarding clicking on strange emails. According to CISA, 90% of ransomware attacks come through phishing
  • Renew your plan for managing an attack.
    • Walkthrough scenarios in table-top exercises.
    • Test back-up and recovery plans and continuity of operations in case a network is disabled.
    • Make sure the emergency contact information for your people and partners is updated and available.
    • Revisit your crisis communications plan.

Most cyber threats can be managed, but we must be proactive. If your IT professionals have been requesting funds to strengthen cyber security, take this time to analyze the proposed solutions. Invest while you can.

Our CEO Rita Wilson has a strong technology background and a keen interest in these issues. If you have questions or just want to discuss your cyber security concerns, contact her at

Meantime, shields up!

CMS Webinar Delves Further into Non-Submit MSA Matters

Posted on February 26, 2022 by Daniel Anders

The Centers for Medicare and Medicaid Services recently hosted a webinar on Workers’ Compensation Medicare Set-Asides (WCMSAs). While the webinar covered several topics around MSA submissions, CMS policy toward non-submit and evidence-based MSAs was an attendance-driver, according to its presenter, John Jenkins, Health Insurance Specialist for the CMS Division of Medicare Secondary Payer Operations.

As Tower’s recent articles CMS: Non-Submit MSAs Potentially Shift Costs to Medicare and CMS Letter Confirms Non-Submit MSA Denial is Real noted, the addition of Section 4.3 to the WCMSA Reference Guide has raised many questions and led some payers to reconsider whether non-submit MSAs are the best option for them.

Here is a webinar summary with Tower’s comments on Mr. Jenkins’ statements pertaining to non-submit MSAs along with a breakdown of some of the other matters discussed.

Non-Submit MSAs

Mr. Jenkins explained that the addition of Section 4.3 on non-submit and evidence-based MSAs was in response to industry requests for CMS’s position on such products.

He said that Section 4.3 is consistent with prior policy announcements which advise that Medicare has a right of recovery up to the settlement amount when the MSA is not CMS-approved and is prematurely exhausted.

  • Tower comment:  As we indicated in our prior article on Section 4.3, we believed this would be CMS’s position.

Mr. Jenkins could not clear up the question about MSAs that do not meet the CMS WCMSA review thresholds, i.e., Medicare beneficiary and total settlement higher than $25,000.  First, he said CMS treats these as if they never existed, thus the total settlement would be considered available to pay for future medical. However, later he said that if CMS obtains the non-submit MSA amount, that amount may be used to determine the “marker” in their system (This marker determines whether Medicare will pay for a certain treatment). Ultimately, he indicated further policy guidance will be issued around under-threshold MSAs.

  • Tower comment:  The common working file is CMS’s system to coordinate benefits to Medicare beneficiaries so that Medicare does not pay when a primary payer is available to pay. CMS places the marker for certain diagnoses to enable it to deny payment for treatment related to those diagnoses codes.  CMS needs to clarify how under-threshold MSAs will be treated. If parties have included a clinically and/or legally reasonable and defensible MSA in the settlement or have acceptable reasons for not including one, CMS should limit the liability for future medicals to the MSA amount. Perhaps CMS will have a post-settlement review process but its details are not clear at this time.

Mr. Jenkins went on to indicate that if CMS receives the non-submit documentation, settlement, and MSA amount, then it will use this information to place a marker in the common working file to deny medical care until such time as the settlement is exhausted.

According to Mr. Jenkins, CMS expects that Medicare should never see an injury-related bill if the non-submit MSA is priced correctly. If the MSA prematurely exhausts, the Medicare beneficiary will have to provide reasons for its exhaustion. Then it would be up to CMS to determine if the allocation and spending of the MSA were appropriate, using the same process used to approve MSAs.

  • Tower Comment:  Mr. Jenkins said that they see many instances of CMS-approved MSA funds exhausting and expects the same from non-submit MSAs. Even the best cost projections for future medical care are, in the end, still predictions. Future medical inflation alone will increase costs in addition to changes in treatment and medications. Thus, while a majority of non-submit MSAs will appropriately cover future medical care, some non-submit MSAs–just like some CMS-approved MSAs–will exhaust.

Mr. Jenkins referenced conducting some type of review if non-submit MSA exhausts, similar to the current pre-settlement WCMSA review process. Naturally, this raises more questions.  First, who is completing the review? The current CMS WCMSA review contractor, CMS itself, or some other contractor? What criteria will be used as part of the review? What documentation must be submitted to support the MSA allocation as sufficient and the fund spending as appropriate? To verify adequate funding, the same documentation used at settlement (medical treatment records, prescription histories, and rated ages) would likely be required. We assume appropriate spending of the funds would be determined using healthcare bills and payment receipts.

Mr. Jenkins advised that if a structured MSA’s funds exhaust in any given year, CMS will not temporarily step in to pay for injury-related care as it does with a CMS-approved MSA.

  • Tower Comment:  This leaves anyone with a non-submit MSA annuity in a difficult position. They would need to use their personal funds to pay for medical until next annuity payment is received when they could theoretically reimburse themselves. Even if they can reimburse their medical bills from the annuity payment, CMS is not likely to agree that reimbursing interest payments that occurred from putting medical bills on a credit card is an appropriate use of these funds.

Mr. Jenkins was clear in stating that the MSA, whether CMS-approved or not, is an agreement solely between CMS and the Medicare beneficiary.

  • Tower Comment:  This indicates that CMS will not take any action against the employer or insurance carrier as they are not seen as a party to the agreement. That said, there remain repercussions to the payer. A Medicare beneficiary claimant may be reluctant to agree to a settlement with a non-submit MSA. Additionally, the workers’ compensation board, commission or other governing authority may be less likely to approve such a settlement.

Mr. Jenkins stated that a large number of CMS-approved MSAs exhaust early and that non-submit MSAs are even more likely to exhaust early.

  • Tower Comment:  The allegation that a large number of CMS-approved MSAs exhaust early is, thus far, unsupported by data from CMS.

As to whether Section 4.3 of the reference guide applies retrospectively or just prospectively, Mr. Jenkins said that while what was stated in this section has always been CMS policy, anything after 1/11/22 must meet this requirement.

  • Tower Comment:  We believe this statement is still unclear. Does this mean that CMS will only apply this policy to settlements that occur after 1/11/22 or does it apply to settlements that took place before 1/11/22 when MSA funds continued to be used after that date?

Finally, Mr. Jenkins advised that Section 111 reporting and WCMSAs are not connected. Therefore, the agency does not use the Section 111 Total Payment Obligation to the Claimant (TPOC) data to place a marker in the common working file.

  • Tower Comment:  While this has been our understanding, CMS’s statement that it does not use Section 111 reporting data to stop Medicare payment for post-settlement medical is significant. It means that unless the settling parties proactively advise CMS of a non-approved MSA, CMS will continue to pay for injury-related care because it is unaware that an MSA was funded.

While the webinar answered some questions around CMS’s approach to non-submit MSAs, many remain. We believe CMS needs to significantly increase its guidance to Medicare beneficiaries surrounding their rights, responsibilities, and the risks they face when settling a claim with a non-submit MSA. At a minimum, CMS may not automatically acknowledge the non-submit MSA amount as the extent of liability for future medical. Consequently, the Medicare beneficiary may be placed in a position to defend the MSA amount and their spend from that amount at some point years in the future.

Other MSA Matters

  • Submission of settlement documents:  CMS continues to identify cases where settlement occurred, and the settlement documents were not forwarded to CMS. These documents must be submitted to make the MSA effective in CMS’s system.
  • Electronic attestation:   Mr. Jenkins indicated that MSA administrators are not submitting yearly and final attestations electronically even though this option is available. He encouraged its use.
  • State statutes:  Advised that parties who wish to limit the MSA per the Georgia 400-week cap need to provide an order from the Georgia Workers’ Compensation Board confirming the claim as non-catastrophic. Also, if a California Independent Medical Review (IMR) confirms the denial of certain care, CMS will not exclude the denied care from the MSA without an “Alternative Treatment Plan” from the treating physician.
  • Pricing of Prescription Drugs:  Addressed a question about whether CMS would consider another pricing mechanism for prescription drugs other than Red Book by saying that CMS is always open to a discussion on alternatives.
  • Lack of updated medical treatment:  In situations where the claimant has not been treated in several years CMS will not assume that this is sufficient evidence to demonstrate that no further care is necessary. Instead, CMS will consider the worst-case scenario and assume that the claimant will return for care.
  • Comorbidities that prevent surgery:  If a comorbidity, such as cardiac or respiratory problems, prevents a surgery from proceeding, CMS will assume that the person will improve and thus allocate the surgery in the MSA.
  • Release from care statements:  If a treating physician releases a claimant from care this does not automatically create a presumption of no future care. CMS assumes that if a specialist releases the claimant from care that there may be follow-up with a primary care physician for ongoing maintenance unless otherwise indicated.
  • MSA Amended Reviews:  Advised that parties who have a previously approved MSA that falls outside of the 72-month window for submitting an Amended Review can still fund that older approved MSA as it will be the only one on record with CMS.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or


CMS Rolls Out ACH Payment Option for Recovery Debts

Posted on February 23, 2022 by Tower MSA Partners

The Centers for Medicare and Medicaid Services now provides ACH payment option for Medicare conditional payment debts.

The Centers for Medicare and Medicaid Services (CMS) is now accepting recovery debt (Medicare conditional payment recovery) payments via ACH (Automated Clearing House) transactions. CMS’s February 18, 2022 announcement says this applies to Non-Group Health Plans (NGHP) as well as Group Health Plans (GHP).

Employers, insurers, third-party administrators, attorneys, and plan sponsors can send payments electronically to the Commercial Repayment Center (CRC) or Benefit Coordination & Recovery Center (BCRC) for processing. ACH setup must be coordinated with the CRC and/or BCRC.

The CMS announcement states:

“ To begin sending payments using ACH, please send an email to the appropriate email address below with “ACH Set Up” in the subject line. Be sure to include a specific point of contact with your organization for the CRC or BCRC. The BCRC/CRC will reach out directly to get the process started.

For the CRC: Please submit an e-mail to

For the BCRC: Please submit an e-mail to

Practical Implications

The ACH payment option means that CMS is now allowing payers to provide their bank account routing and account numbers to facilitate payment of Medicare conditional payment debts.  This is a benefit to the payer in not only avoiding the cost of a postage stamp but to having a quick electronic confirmation of receipt of payment.   This can avoid a “lost in the mail” or a late payment situation which can result in the imposition of interest charges from Medicare.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888-331-4941 or

Marking Insurance Careers Month During “The Great Resignation”

Posted on February 22, 2022 by Tower MSA Partners

How is the insurance industry faring in the choppy waters of “The Great Resignation”? February is Insurance Careers Month, the perfect time to assess where we are after two years of the pandemic.

As a specialty provider of Medicare Secondary Payer (MSP) compliance and Medicare Set-Aside (MSA) services, Tower MSA Partners is a member of the workers’ compensation industry. We’re happy then to commemorate and promote the Sixth Annual Insurance Careers Month. Insurance and related services have been a great career path for many of us at Tower and we’re glad to do our part to raise awareness for the next generations.

At the close of 2021, the Department of Labor/Bureau of Labor Statistics (BLS) put the insurance sector’s employee census at more than 2.8 million employees, with a 1.9% unemployment rate. It’s generally been a stable and resilient business, weathering the pandemic and various other catastrophes fairly well. This is borne out by a new report by Capital Relocation Services (CapRelo), which says that the insurance industry has managed to retain employees relatively better than many industries both in volume and tenure.

But as we look hopefully towards a post-pandemic future, what’s in the cards on the employment front? Will “The Great Resignation” take a terrible toll on the insurance sector as it has with so many other industries?

First, let’s look at what people are talking about when they refer to The Great Resignation.  Start with this:  In December 2021, the “quit” rate was 2.9% as 4.3 million workers voluntarily left their jobs. This was down from November’s highwater mark of a 3.0% quit rate  (4.5 million jobs).  (Source: BLS – Job Openings and Labor Turnover Summary, or “JOLTS” report). This massive flight from jobs is not just happening in the U.S., it’s a global phenomenon, and there are various theories and explanations for why this is happening, with the only commonality agreed upon is that it is related to the pandemic. And there were 4.6 million more job openings than unemployed workers in December. Whatever the reason, it’s an employee’s market, leaving employers struggling to retain and recruit workers.

Industries with low paying jobs and public-facing jobs are among the hardest hit, but there are other reasons beyond low pay and poor conditions that lead to job quits. Gallup surveys put burnout as #1 on the list of reasons why employees are quitting jobs. Feeling unsafe is another frequently cited reason. People don’t want to return to the physical workplace if they don’t feel safe from contracting an illness that they may bring home to children or elderly parents.

But what’s happening to all the workers who quit? Are they just staying home and abandoning the job market entirely?  Well, yes, some are  – in the form of retirement or launching a new business.  Others are seizing the opportunity to trade up on a job, exit a low-paying company/industry, or rethink and re-engineer their career in some other way. While the phenomena of the post-pandemic labor market has been popularly dubbed “The Great Resignation,” other observers think it is more precise to define it as a “Great Realignment” or a “Great Reshuffle.”

In its Q3 2021 U.S. Insurance Labor Market Study and the related whitepaper,  Coming Out Ahead in the Great Reshuffle, The Jacobsen Group, a leading insurance recruitment organization, talked about this:

“While the overall economy is experiencing what many are calling “the Great Resignation,” the insurance industry is encountering more of a “Great Reshuffle.” Professionals who were waiting to make moves earlier on in the pandemic are exploring their options. Individuals are reevaluating their place within their current companies, considering future opportunities and looking forward as offices reopen and the economy continues its recovery.”

In fact, the insurance industry was grappling with certain employment challenges well before the pandemic.  As an industry with an aging workforce, we’ve been faced with the daunting challenge of a retirement talent drain of about half the workforce over the next decade.  And to attract young Gen Z workers and retain millennials, there is the critical need to re-examine and redefine our industry’s value and meaning to generations for whom a sense of  “mission” is table stakes. Plus, as with many long-term industry sectors, there’s been a need to bolster the workforce with deep technology expertise.

Regardless of whether it’s called a great resignation, realignment or reshuffle, employees are sitting in the proverbial catbird seat right now. Insurance organizations need to be proactive in both retaining the talent and expertise they currently have and in retooling to compete aggressively for the talent of the future.

The Transitions

In 2021 a group of leaders in the workers’ compensation industry founded The Transitions with the mission to think strategically about how to handle the influx and outflux of talent over the coming decade.  The Transitions offers an extensive webinar series on such topics as reimagining management style, communication models and technology models in WC.  Additionally, a mentorship program to help recruit and retain talented individuals through professional and personal growth.  We encourage you to check out their website and follow the organization on LinkedIn.

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