Medicare Releases Updated Data on Workers’ Compensation Medicare Set Asides  

Shawn Deane 

General Counsel & Vice President of Claims Solutions | J29 Solutions   

Shawn.Deane@j29inc.com    

On November 25, 2024, the Centers for Medicare & Medicaid Services (CMS) released a report titled, “Workers’ Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics: 2020-2024,” available here.  

Breaking Down the Charts  

The one-page report is broken down into two tables. The first table covers Workers’ Compensation Medicare Set Aside (WCMSA or MSA) proposed values, which are related to figures submitted to the Workers’ Compensation Review Contractor (WCRC) for voluntary review. The WCRC is the CMS contractor that reviews and renders decisions on submitted WCMSA proposals. 

Table 1 includes FY statistics broken down by: 

• Total WCRC Recommendations Completed (where a decision was rendered by the WCRC)  

• Total Settlement Amount (aggregated settlement amounts associated with WCMSAs)   

• Total Settlement Amount Average (the average settlement amount associated with a WCMSA)   

• Total proposed WCMSA Amount (aggregated proposed WCMSA amounts – not the “recommended” or “approved” amount by CMS)  

• Total Proposed WCMSA Average (the average amount of each proposed WCMSA – again, not the final “approved” amount by CMS)   

The second table indicates figures related to WCRC values, which are associated with the WCRC’s determination following voluntary MSA submission and the WCRC’s review and determination. In other words, this table contains amounts/figures related to what CMS indicates the MSA should be (i.e., the approved amount) vs. what the submitter initially proposed.  

Table 2 includes FY statistics broken down by: 

• Total WCRC Recommended WCMSA Amount (aggregated contractor determined WCMSA approved amounts)  

• Total WCRC Recommended WCMSA Average (the average amount of each WCRC approved WCMSA)  

• Percentage Proposed vs. Recommended Change (the % difference between the submitter’s proposed amount vs. the WCRC’s determined amount – i.e., “counter higher”)  

• Recommended Medical Amount (WCRC determined aggregated amount associated with the healthcare services portion of WCMSAs)  

• Recommend Medical Amount Average (the average WCRC determined amount for the healthcare portion of an individual WCMSA)  

• Recommended Rx Amount (aggregate amounts associated with the prescription drug potion of WCMSAs as determined by the WCRC)  

• Recommended Rx Amount Average (the average WCRC determined amount for the prescription drug portion of an individual WCMSA)  

Analysis & Highlights  

CMS Decisions Decreased in FY2024 from FY2023  

FY 2024 saw a total of 14,862 decisions, which was a 5.5% decrease from FY 2023’s figure of 15,743. Chart 1 below visually presents trends from FYs 2020 to 2024, highlighting year-over-year changes in WCMSA decisions. However, it is unclear how closely WCMSA total submissions align with decisions, as this data is not included in the report. To provide more insight for the submitter community, it would be useful to know how many WCMSA submissions did not result in a recommendation or approval. Additionally, the data does not seem to account for zero ($0) submission approvals or indicate whether the approval came from first-time submissions or via Amended Review. It would also be valuable if CMS released data regarding development requests – i.e., instances where the WCRC requests additional information to issue a recommendation.  

Overall, several factors may contribute to the slight decrease in decisions from FY 2023, including stakeholder adoption of non-submit options or internal operational changes by the contractor.  

MSA Amounts   

Initially submitted or proposed MSA amounts have remained relatively consistent over FYs 2020-2024, with an average over those five years being $71,687.22. The average proposed amount in FY2024 was $70,775.58, a de minimis decrease (-0.15%) from FY2024’s corresponding figure, which was $70,887.33.  

Recommended WCMSA amounts averaged $83,851.22 over a five-year period, with FY2024 having an average approved amount of $85,927.43, a slight 0.6% decrease over FY2023’s corresponding figure of $86,452.67.  

Total recommended amounts in FY2024 were $1.27 billion, down from $1.36 Billion in the previous year, likely due in part to the decrease in recommendations completed and the slight percentage decrease in proposed vs. approved (which was 22% in FY2023 and 21%, respectively, in FY2024). The total combined approved amounts from FY2020-2024 total $6.35 Billion. 

Counter Highers  

When the WCRC renders a decision on a WCMSA submission with a recommendation/approval for an amount higher than initially proposed, it is often referred to as a “counter higher.” See Sec. 9.4.4 in the WCMSA Reference Guide, v.4.1., at pg. 21.  

The percentage difference between the initially proposed WCMSA amount vs. the CMS approved amount decreased slightly from FY2023 to FY2024 (22% to 21%). It is notable this figure averaged 14% from FY 2020 – FY 2022 and saw a jump in FY2023 to 22%.  

Reasons for this may be linked to changes in the methodology by the contractor, and/or allocation techniques and tactics utilized by submitters. See Chart 2 below for the differences over time.  

FY2024 saw an average proposed WCMSA amount of $70,775.58 with an average approved amount of $85,927.43. The aggregated proposed amounts in FY2024 totaled $1.05 Billion and the aggregated approved amounts totaled $1.27 Billion – with the difference between proposed and recommended amounts just over $225 million. FY2023 saw this figure at $245 Million.  

Chart 3 below depicts aggregated counter higher totals (i.e., difference between the approved vs. proposed amounts) over the FY2020-2024 period. Aggregate counter higher figures over this five-year period total approximately $920 Million, approaching the billion-dollar mark. It may be helpful for CMS to release the number of counter highers rendered, or a percentage of counter highers out of the total recomendatoins completed.  

WCMSA Average Amounts for Medical Up & Rx Down   

A breakdown of the proposed medical and Rx amounts is not provided in the report. However, the approved average medical amounts are trending slightly upwards. There’s been an increase of 17% since FY2020 – FY2024 ($57,989.02 - $68,120.78) in relation to the approved average medical amount. On the prescription drug side, from FY2020-2024 there’s been a decrease of 33% (from $26,574.31 - $17,806.65). See below for Chart 4 depicting a breakdown of average WMCSA medical and Rx amounts. 

MSA Figures in Proportion to Settlement Amounts  

The average proposed settlement amount over FYs2020-2024 is approximately $162k with an average proposed settlement amount in FY2024 of $152,487.15, a 5% decrease from FY2023’s figure of $159,976.93. The portion of the WCMSA in relation to the proposed settlement amount has remained consistent from FYs 2020-2023, around 44%. What is not known is whether the final approved WCMSA amount coincides with the proposed settlement amount. Given the WCMSA and settlement process it may be difficult to tie back finalized settlement figures. It is assumed the proposed settlement amount in CMS’ provided data may differ from the actual final settlement figure. Moreover, it is not known whether all approved MSA amounts in fact reached final settlement.  

Wrap Up  

As always, the industry is grateful to CMS for providing valuable data regarding the Medicare Secondary Payer (MSP) program, particularly in relation to WCMSAs. This information enables stakeholders and compliance professionals to make informed decisions, assess and adjust their compliance program, proactively plan for changes, and develop best practices.  

The upcoming implementation of Section 111 workers’ compensation TPOC reporting for WCMSAs will make this data even more crucial, offering a unique opportunity to assess whether these changes impact emerging trends. This author will be closely monitoring these developments, and please don't hesitate to reach out with any questions. 

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Author Bio 

Shawn Deane 

General Counsel & Vice President of Claims Solutions | J29 

Shawn.Deane@j29inc.com    

(866) 529-6771 

www.j29inc.com  

As General Counsel & Vice President of Claims Solutions, Shawn Deane leads J29’s legal and Medicare Secondary Payer (MSP) services team. Shawn is a practicing attorney and has over 17 years of experience in Medicare compliance, workers’ compensation, and insurance claims. He was previously General Counsel & Senior Vice President of Risk Management & Compliance at the nation’s largest professional administrator of Medicare Set Asides. Prior to that he was Vice President of Medicare Compliance & Policy at one of the country’s largest Medicare Set Aside vendors. He’s an industry expert and thought leader in workers’ compensation, Medicare Set Asides (MSAs) and Medicare compliance.  

About J29 

J29 is a women-owned business that offers Medicare Secondary Payer (MSP) compliance services providing Medicare Set Asides (MSAs), conditional payment / lien services and related solutions to all workers’ compensation stakeholders – including carriers, self-insureds, third-party administrators, and attorneys. 

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