CMS Updates Workers’ Compensation Medicare Set-Aside Rules in 2025

In 2025, the Centers for Medicare and Medicaid Services (CMS) introduced three significant Workers’ Compensation Medicare Set-Aside (WCMSA) policy updates impacting the coordination of benefits between Medicare and workers’ compensation settlements. Firstly, CMS has mandated new Total Payment Obligation to the Claimant (TPOC) reporting requirements for all WCMSAs, including those below the $25,000 voluntary review threshold and even $0 WCMSAs. This expanded reporting provides CMS with enhanced oversight of insurers’ WCMSA practices, ensuring better tracking of future medical allocations and aiding Medicare’s secondary payer status enforcement. Secondly, CMS eliminated the previous one-year waiting period for filing an Amended Review request on WCMSAs effective April 7, 2025. This change allows parties to submit amendments to approved WCMSAs anytime post-approval, facilitating faster claim resolutions and potential reductions in WCMSA amounts when circumstances change. Thirdly, effective July 17, 2025, CMS will no longer review or accept $0 WCMSA submissions. While parties can continue to use $0 WCMSAs where appropriate, CMS requires they independently verify eligibility based on established criteria and maintain supporting documentation, as these allocations remain subject to audit through TPOC reporting. These regulatory revisions emphasize CMS’s focus on strengthening Medicare Secondary Payer compliance and necessitate adjustments in workers’ compensation claims handling and settlement practices. Insurers, self-insured entities, and claims professionals may need to revisit WCMSA protocols, leveraging data and automation technologies to enhance compliance and reporting accuracy. Overall, these updates reflect CMS’s efforts to increase transparency, streamline WCMSA reviews, and manage future Medicare liabilities associated with workers’ compensation claim settlements, impacting insurers, third-party administrators, and regulated entities handling WCMSA submissions.