The Centers for Medicare & Medicaid Services (CMS) recently announced two significant updates to Workers’ Compensation Medicare Set-Aside (WCMSA) rules, effective in 2025. These changes affect $0 MSA proposals and immediate amended reviews, with notable implications for settlement practices.
Here’s what you need to know—and how these updates may impact your claims management strategies.
1. $0 MSA Set-Asides
Effective Date: July 17, 2025
CMS will no longer accept or review WCMSA proposals with a zero-dollar ($0) allocation.
What Does This Mean?
While CMS doesn’t require WCMSA submissions (per Section 4.2 of Medicare’s guidelines), Medicare’s interests must still be protected in all workers’ compensation (WC) settlements. A $0 MSA allocation is appropriate only if specific criteria are met, ensuring Medicare’s interests are safeguarded without requiring a formal MSA.
When Is a $0 MSA Appropriate?
A WCMSA is generally unnecessary if the claimant no longer needs future medical or pharmacy treatment for the work-related injury, or if the WC carrier has denied liability. Here are practical scenarios where $0 MSAs apply:
No Future Medical Needs
A treating physician documents that, to a reasonable degree of medical certainty, the claimant will not require future treatment or medications for the WC injury or illness.
Practical Tip: Maintain clear medical documentation from the treating physician to support this conclusion.
Denial of WC Claim
The insurer or self-insured employer has denied responsibility for benefits under state law, made no payments for treatment (except investigational), and the settlement does not allocate funds for future medical care.
Practical Tip: Ensure the settlement clearly states that no future medical funds are allocated and document the claim’s denial history thoroughly.
Court Rulings or Statutory Denials
A court, commission, or board has determined the WC carrier owes no additional medical or indemnity benefits.
Practical Tip: Retain the court ruling and ensure it addresses the absence of responsibility for future medical costs.
Ongoing WC Carrier Responsibility
If the settlement leaves WC carriers responsible for ongoing medical or prescription coverage once settlement funds are exhausted, an MSA is not required.
Practical Tip: Confirm that the settlement terms explicitly state the carrier’s ongoing responsibility.
Key Update: Starting July 17, 2025, CMS will no longer review $0 MSA proposals. Instead entities must ensure their supportin documentation demonstrates compliance with Medicare's guidelines.
2. Amended Reviews
Effective Date: April 7, 2025
CMS will allow amended review requests for WCMSA cases at any time after approval, lifting the current one-year waiting period.
What Does This Mean?
Previously, entities had to wait a year after CMS approved an MSA to submit an amended review. This update provides greater flexibility and streamlines the process for adjusting MSAs to reflect changes in medical treatment needs or case conditions.
Practical Guidance
Use Case — If medical costs significantly change after an MSA approval, you can request an amended review right away.
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