The Centers for Medicare & Medicaid Services (CMS) has released Version 4.5 of the Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, dated April 13, 2026 (COBR-Q2-2026-v4.5). While the technical updates in this version are modest, they come amid sweeping enforcement changes that every workers' compensation practitioner must understand.
What's New in Version 4.5
Version 4.5 includes an updated link to the CDC Life Table used to determine claimant life expectancy for WCMSAs. This follows CMS's September 2025 announcement that it would use the CDC's "Table 1: Life Table for the total population: United States, 2023" for these calculations. The new Reference Guide also adds three Illinois ZIP codes — covering OSF Saint Francis Medical Center, The University of Chicago Medical Center, and Advocate Good Samaritan Hospital — to the table governing inpatient procedure pricing for WCMSA proposals.
These adjustments to the major medical center pricing table directly affect how WCMSA allocations are calculated for claimants treated at facilities in those regions.
The Bigger Picture: New Reporting Requirements
The more significant developments surrounding Version 4.5 are not within the document itself, but in the enforcement landscape that now surrounds it. On April 4, 2025, CMS expanded Section 111 reporting to require workers' compensation Responsible Reporting Entities (RREs) to report seven new WCMSA data fields through Total Payment Obligation to Claimant (TPOC) reporting.
The new fields to be collected include: MSA Amount, MSA Period, Lump Sum or Structured/Annuity Payout Indicator, Initial Deposit Amount, Anniversary (Annual) Deposit Amount, Case Control Number, and Professional Administrator EIN.
A WCMSA "W" record is posted to the Common Working File (CWF), preventing payment of medical services related to injuries described by the diagnosis codes. This means that once a WCMSA is reported through Section 111, Medicare's systems will automatically apply it to coordinate benefits — making accuracy in reporting essential.
Civil Money Penalties: Enforcement Has Arrived
For years, Section 111 reporting carried no direct penalty mechanism. That era is over. Beginning October 11, 2025, failure to comply with mandatory Section 111 reporting obligations may result in civil monetary penalties (CMPs). Quarterly CMS audits, covering a random sample of 250 records per quarter, began in January 2026.
Penalties are assessed when RREs fail to report ORM assumptions or TPOC settlements within 365 days of the reportable event. CMS expects the first penalty notices to be sent in March 2026, mailed to the RRE's Authorized Representative.
Due to the significant policy change to add WCMSA reporting fields, effective April 4, 2025, CMS announced it will not apply CMPs for workers' compensation TPOCs until July 2026, with a lookback period through July 2025. This grace period is a limited window — practitioners should not treat it as an invitation to delay compliance.
Penalty amounts are substantial. Penalties of $357 per day apply for every day reporting data should have been submitted between one and two years prior, with amounts escalating on an annual inflation-adjusted basis.
Safe Harbor — But Only with Documentation
RREs are not entirely without recourse. CMS recognizes a safe harbor for RREs that make documented good faith efforts to obtain beneficiary information. Upon receipt of an informal CMP notice, the RRE has 30 days to provide a response with a reasonable explanation for untimely reporting.
Importantly, state laws or ethics provisions regarding contacting represented claimants are not applicable to Section 111 compliance. CMS expects RREs to attempt to contact the individual directly if three good-faith attempts to the claimant's attorney have gone unanswered — failing which, the safe harbor will not apply.
Practitioner Takeaways
The convergence of Version 4.5's updated pricing tools and the active enforcement of Section 111 CMPs signals a new era of Medicare Secondary Payer compliance in workers' compensation. Practitioners and insurers should:
- Confirm that all WCMSA submissions reflect updated Illinois ZIP code pricing where applicable.
- Ensure Section 111 TPOC submissions include all seven new WCMSA data fields for settlements involving Medicare beneficiaries.
- Verify that the CMS profile report contact information for Authorized Representatives is current, as penalty notices will be mailed there.
- Build internal compliance calendars around the 365-day reporting deadline.
- Maintain documented good-faith outreach records for every beneficiary from whom SSN or Medicare information is sought.
The bottom line: CMS is watching, auditing, and now penalizing. Version 4.5 is a routine update, but the enforcement environment surrounding it is anything but routine.
Related Resources
Jon L. Gelman, Esq. is the author of Workers' Compensation Law (Thomson Reuters) and maintains a workers' compensation blog at workers-compensation.blogspot.com and Substack at jongelman.substack.com.
© 2026 Jon L Gelman. All rights reserved.
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