MSA Source January 2026 newsletter
Medicare Compliance in the New Year: What to Expect in 2026
This past year saw many changes in the Medicare Secondary Payer landscape. This included a new CMS policy on the review of $0 allocations, the addition of Section 111 reporting data fields, and the implementation of civil monetary penalties for incorrect reporting. It is unclear in which direction CMS will go in the new year.
Use of Section 111 Reporting to enhance Medicare compliance: As stakeholders move into the new year, increased caution is warranted given the enhanced tools CMS now has through expanded data collection. Accurate and precise Section 111 reporting is essential to ensure continued Medicare compliance.
Civil Monetary Penalties: The frequency of civil monetary penalties is unclear. We do know that CMS will continue to ramp up its enforcement as it gains experience in this area. Now is the time to ensure accurate information is being reported promptly.
Changes in WCMSA policies and procedures: CMS updates to the WCMSA process are not issued on a predictable schedule. In most years, revisions tend to focus on technical guidance, including clarification regarding which life expectancy tables should be applied when calculating allocations.
Marijuana and Medicare: President Trump recently signed an Executive Order directing the Attorney General to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious manner….” It is unclear what this new proposed rule will look like, but it very well could impact Medicare and possibly require the inclusion of medical marijuana in MSA allocations.
Are You A Zero Hero?
Navigating the New Standards for Zero-Dollar MSAs
Now is the time to be a “zero hero.” MSA Source is here to provide you with a review by our compliance counsel on whether your claim has sufficient information to meet the standard for a medical or legal $0 allocation. Our compliance counsel can also assist with drafting language for your settlement agreement to ensure problems do not arise in the future.
Medicare Set-asides (MSAs) have posed numerous challenges for members of the claim management team and other interested stakeholders. A recurring challenge is the submission and approval of $0 MSAs. To be effective within the Medicare Secondary Payer compliance framework, it is essential to understand the $0 allocation and explore alternatives.
Medical $0 Allocations
This type of allocation is typically found in claims where the employer and insurer have paid various workers’ compensation benefits to and on behalf of the employee, but the employee has now fully recovered from their work injury and no longer requires future medical care.
Criteria to support such allocations include:
The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished before the settlement);
There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare’s detriment; and
The individual’s treating physicians conclude (in writing) that to a reasonable degree of medical certainty, the individual will no longer require any Medicare-covered treatments related to the injury.
Claims with documentation that meets these criteria are prime for review by MSA Source to provide an opinion supporting a medical $0 allocation.
Legal $0 Allocations
Unlike “medical $0 allocations,” there is little direct discussion about Legal $0 within the WCMSA Guide. Instead, parties are forced to examine various portions of the Guide for clues in terms of what CMS is looking for and how to get one approved:
Review of Section 4.2 and factors outlining consideration of Medicare’s interests;
10.1 – Cover Letter – Information CMS requires for submission, such as denied claims and supporting documents – evidence to no payments made or corresponding state statute that supports the legal argument of “payment without prejudice; and
Whether there has been a hearing on the merits.
The goal is to work together to ensure an explicit denial of primary liability, proper verification that no benefits have been made in the past, and that the defense interests are not responsible for any future portion of the claim.
Conclusions
MSA Source is here to help you navigate the evolving landscape of $0 Medicare Set-Aside allocations, including the current limitations on CMS review and approval under the WCMSA process. Our compliance counsel can assist in drafting protective settlement language to help ensure you are a true “Zero Hero.” In addition, MSA Source will assist in preparing an audit-ready documentation package to demonstrate that Medicare’s interests were properly considered.
Recommendations for a Successful 2026
Ensure claim team members are communicating with defense counsel and their Section 111 Reporting team. Consider improving internal communication so everyone understands how Section 111 reporting affects claim handling.
Provide consistent education on matters such as $0 allocations. Obtaining a written analysis from a third party will enhance the credibility of $0 allocations used in settlements.
Never forget that inclusion of the MSA in the settlement document is of the utmost importance. Failing to include things like information on the MSA-funded amount, MSA administration, reversionary clause, and statement of reasonableness.
MSA Source is here to assist with all of your Medicare Secondary Payer compliance needs. This includes the skill of our trained nurses, with decades of experience in writing allocations, and the precision of our compliance counsel to help you draft better settlement agreements.
MSA SOURCE — LEGAL DRAFTING SERVICES
MSA Source Learning Corner
The next installment of the MSA Source webinar series will focus on the Medicare Set-aside:
Program Title: WCMSA Submission Process: Avoiding Delay, Development, and Defeat
Date/Time: Thursday, January 22nd at 1pm ET
Program Description: MSA Source will host its next quarterly webinar on Thursday, January 22, at 1:00 p.m. ET for a one-hour program focused on navigating the WCMSA review and approval process. This session will address common challenges that lead to CMS delays and development letters, and will highlight strategies for improving outcomes through effective collaboration with your claim team.
The program’s goal is to help achieve stronger WCMSA results—more efficiently and with fewer obstacles.
MSA Source has applied for CEU credit for this program.