CMS “Zero MSA” Guideline update!

Effective July 17, 2025, CMS will no longer accept or review WCMSA proposals with a zero- dollar ($0) allocation. However, entities should consider the parameters below in determining whether a zero-dollar WCMSA allocation is appropriate and maintain documentation to support that allocation.

Although WC claimants must always protect Medicare’s interests, is the position of CMS that a WCMSA is not necessary under the following conditions because when they are true, they indicate that Medicare’s interests are already protected:

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.

NOTE: If Medicare made any conditional payments for WC injury-related services furnished prior to settlement, then Medicare will recover those payments. In addition, Medicare will not pay for any WC injury-related services furnished prior to the date of the settlement for which it has not already paid.

*The treating physician’s opinion that no future care is needed must be consistent with the medical record.  For example:  If a patient has been treating consistently for CRPS and has been on medications for CRPS longitudinally over time, CMS may reject the treating physicians recommendation that no further care is needed.