CMS Issues New WCMSA Reference Guide and Section 111 NGHP User Guide

On July 13, 2026, the Centers for Medicare & Medicaid Services (CMS) released updated versions of the Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide and the MMSEA Section 111 Non-Group Health Plan (NGHP) User Guide. Below is a summary of the key changes.

WCMSA Reference Guide, Version 4.6

The most significant update in Version 4.6 is a revision to the WCMSA Sample Approval Letter contained in Appendix 5. CMS issues these letters following its review and conditional approval of voluntarily submitted WCMSA proposals.

The revised template includes expanded guidance for structured WCMSAs, specifically addressing:

· How annual payments are administered.

· When Medicare will begin paying for covered services following temporary exhaustion of annual WCMSA funds.

· The importance of paying bills in chronological order.

CMS states in the updated letter as follows:

When a WCMSA is funded through a structured settlement (i.e., settlement funds paid in annual installments over a period of years), unused funds from a given year must remain in the account for future related medical expenses. If all available WCMSA funds for a particular year—including the current year's structured payment, any remaining funds from prior years, and accrued interest—have been properly spent, Medicare will cover Medicare-covered items and services related to the workers' compensation claim for the remainder of that year until the next scheduled WCMSA deposit. CMS further advises that bills should be paid in the order received to assist the Benefits Coordination & Recovery Contractor (BCRC) in confirming that annual funds have been properly exhausted.

Additional changes to the sample approval letter include:

· CMS now identifies the applicable state workers’ compensation fee schedule used in calculating the WCMSA amount.

· A new section explains that CMS will notify Medicare Advantage (Part C) and Part D prescription drug plans of the approved WCMSA, although CMS will not provide details regarding specific treatments or medications covered by the WCMSA. CMS cautions that a beneficiary’s failure to respond to Part C or Part D inquiries could result in delayed or discontinued coverage.

· The address for annual attestation submissions has changed from the WCMSA Proposal/Final Settlement address to:

NGHP

PO Box 138832

Oklahoma City, OK 73113

· The fax number for submitting supplemental documentation has been updated to (405) 869-3306.

· Questions concerning an approved WCMSA are now directed to Regional Office Customer Service rather than an individual CMS contact.

NGHP User Guide, Version 8.5

CMS also issued several updates throughout the Section 111 NGHP User Guide. Key revisions include:

· Discontinuation of Early and Late File Submission Alerts. To reduce false alerts, unnecessary investigations, confusion, and incorrect escalations, CMS has eliminated Early File Submission and Late File Submission notifications. These notices previously alerted Responsible Reporting Entities (RREs) when files were submitted prematurely or when no Claim Input File was received during a reporting period. (Chapter 7, Introduction and Overview, Section 4.3.2; Chapter 6, Registration and Procedures).

· Automatic Deletion of Certain Error Files. CMS will now automatically delete files that remain in MSP HOLD (TIN) Error status or Severe Error status for more than 35 days. Severe error notifications are sent to RREs via email. RREs must work with their EDI Representative and resubmit corrected data. Files that remain unresolved after 35 days will be automatically deleted. (Chapter 6, Registration Procedures, Sections 6.3.3, 7.3.1, and 8.3 Technical Information).

· Clarification of Error Code CW08. Appendix G was revised to clarify that CMS will issue error code CW08 when a Claim Input File Detail Record does not match an existing WCMSA case. Specifically, if Field 42 contains an invalid CMS Case Control Number (CCN), and the CCN/Date of Injury combination does not match an existing WCMSA record, the submission will be rejected. (Chapter V, Appendix G).

· Medicare ID Clarification. CMS added language confirming that a beneficiary’s current Medicare Beneficiary Identifier (MBI) will be returned when a valid match is found. (Chapter V, Appendices C and E).

· New Disposition Code GL. Effective January 2027, CMS will introduce disposition code “GL” in the Claim Response File. The code indicates that a record was not accepted by the BCRC because it is part of a Global Resolution Settlement. (Chapter V, Appendix G).

· Foreign Address Reporting. CMS has removed prior guidance instructing RREs to enter all zeros in the ZIP code field when reporting a foreign country code. (Chapter V, Appendices A, B, D, and G).

Takeaway

While the updates do not represent significant policy changes, they provide important operational guidance for WCMSA administration and Section 111 reporting. The revised WCMSA approval letter offers greater clarity regarding structured settlements and temporary exhaustion of annual funds, while the NGHP User Guide changes largely focus on reporting efficiencies, error processing, and data validation requirements. With the reporting of WCMSA information to CMS, we are also seeing further clarifications on data validation, processing and the sharing of this information with Part C and D plans.

Understanding when to utilize a Medicare Set-Aside as part of settlement and how to report this post-settlement is a key to a compliant Medicare Secondary Payer program. Contact us for more information about these updates or to discuss how Sanderson Firm can help you on your MSP compliance journey.