Sandy Simpson - Solutions for Workers' Compensation and Liability Settlements

Sandy Simpson

19/Oct/2022

During the settlement process, a personal injury attorney needs to consider what government/public benefits their client is enrolled in and what they may be eligible for in the future. Several questions need to be asked. Have you considered Medicare’s interest in the settlement? How will the settlement proceeds be handled? Will a lump sum payment disqualify them from their government benefits? These questions need to be addressed because a client’s settlement could have long-lasting financial implications.

When it comes to settling a case with public benefits there are many nuances to consider. Hiring a team of experts such as an Elder and Special Needs Law Attorney, a Structure Settlement Broker, a Medicare Set-Aside (MSA) Allocator, and/or a Trust Advisor can assist you in protecting your client’s benefits and preserving the settlement proceeds.

Getting Familiar With Public Benefits

Public benefits can either be federal or state-run programs. If the benefits program is run by the state, each state has its own set of criteria for eligibility. Needs-based public benefits are also known as asset means-tested public benefits. Asset means-tested means that eligibility is based on an individual’s income level and assets. To learn more about all the different types of government benefits Gov/Benefits.

Government benefits are categorized into two types which are Needs-Based Benefits and Entitlement Benefits.

Needs-Based Benefits – Also referred to as “means-tests,” these are based on an individual’s income and/or assets
Non-Needs Based Benefits Aka Entitlements Based – These are determined by what an individual has contributed or paid into a given benefits system

Common Government Benefits

Below is a list and summary of the most frequently used government benefit programs. However, this is not a complete list, and a full investigation of a client’s use of government benefits should be conducted before the settlement process begins.

Medicare

Government national health insurance program in the United States, begun in 1965 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services. It is intended for people who are 65 or older, certain younger people with disabilities, and people with end-stage renal disease.

Social Security Disability (SSDI)

Payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide monthly benefits to people who have a medically determinable disability that restricts their ability to be employed.

Social Security Income (SSI)

Means-tested program that provide cash payments to disabled children, disabled adults, and individuals aged 65 or older who are citizens or nationals of the United States.

Medicaid

Health coverage programs operated by states, within broad federal guidelines. Although the federal government pays a portion of the costs, Medicaid is administered and operated by states, and each state’s program is different and based on the needs and goals of the individual state.

Medicaid Adult / Disability-Based

Permanently disabled & unable to work
Only Income Test applies in California
Income & Asset Test applies
Supplemental Security Income (SSI) recipients
In-Home Support Services (IHSS) recipients
Home & community-based waivers participants
Long-Term Care Facility residents

Medicaid Adult / Non-Disability Based

Able to work & income is below the Federal Poverty Level (FPL)
MAGI Medicaid on household income
Assets are not counted toward
Pregnant women

Medicaid – Children Health Insurance Program (CHIP)

This program is administered by the United States Department of health and Human Services that provides matching funds to states for health insurance to families with children.

Section 8 – Housing Assistance

The housing choice voucher program aids very low-income families to afford decent, safe, and sanitary housing. Housing can include single-family homes, townhouses and apartments and is not limited to units located in subsidized housing projects. Housing choice vouchers are administered locally by Public Housing Agencies (PHAs).

Veterans Administration (VA)

The United States Department of Veterans Affairs of the federal government providing life-long healthcare services to eligible military veterans at VA medical centers and outpatient clinics.

Our Complimentary Reference Guide for Government Benefit Protection

For further information on how to protect your clients’ government benefits after a settlement, Medivest would like to provide the following data chart. It summarizes a variety of public benefit programs and the best course of action you can take to ensure their benefits are protected. Click here to download.

Sandy Simpson

15/Aug/2022

Consider this scenario: you are a personal injury attorney, and you get a call from a new client who is 63 years old and is interested in settling her automobile accident case. Per the Medicare Secondary Payer statute and as part of the case workup, you need to make sure you are not shifting the burden to Medicare.

What is the Medicare Secondary Payer Statute?

The MSP statute was passed by Congress in 1980 in order to protect the financial integrity of the Medicare Trust Fund. Per this statute/law, Medicare is a secondary payer for workers’ compensation, no-fault insurance, liability insurance, self-insured plans, and employer group health plan insurance. According to the MSP regulations, these other sources of health care coverage are to be the primary payer, with Medicare being the secondary form of payment.

What is a Medicare Set-Aside (MSA) Proposal?

A MSA proposal is a detailed report indicating the anticipated Medicare allowable, Injury-related expenses for the remainder of the injured individual’s life expectancy. It is a calculation that determines a dollar amount that should be “set aside” as part of the settlement process to satisfy the Medicare Secondary Payer Statute (MSP) and to avoid shifting the burden to Medicare.

Guidance from Medicare for Liability Cases

The Centers for Medicare and Medicaid Services (CMS) published the WCMSA Reference Guide to help attorneys understand the process CMS uses for approving proposed Workers’ Compensation MSA (WCMSA) arrangements. The purpose of the WCMSA Reference Guide was to consolidate and supplant all the historical CMS memos into a single point of reference.

However, Workers’ Compensation and Liability settlements have several different nuances. CMS has yet to release the long-awaited LMSA Reference Guide for liability settlements, despite announcing its intention to do so in 2018. Given the current lack of guidance concerning Liability MSAs from CMS, attorneys should look to the WCMSA Reference Guide for guidance when settling their liability cases.

Litmus Test – Is a MSA Proposal Recommended?

In order to determine if a MSA allocation is recommended to cover Medicare’s interest in your settlement, there are several key items to review. Attorneys can do a quick MSA litmus test to determine whether or not a MSA is recommended.

Your client is currently Medicare-eligible
Your client is 62.5 years old and within 30 months of becoming eligible for Medicare benefits
Your client has either applied for Social Security Disability Insurance (SSDI) or has an open or pending application Will there be any money after medical liens have been resolved to fund a Medicare Set-Aside (MSA) account?

Medicare Eligibility

What is Medicare’s criteria for an individual to become Medicare eligible? Medicare is available for people aged 65 or older, younger people with disabilities, and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).

Social Security Disability Insurance (SSDI)

An individual who has either applied or has reapplied for Social Security Disability Insurance can become Medicare eligible. Social Security Disability Insurance (SSDI) is a federal program that helps those who have become disabled from work. An individual can apply for SSDI when:

A person is unable to engage in any “substantial gainful activity” due to an illness or disability and;
When a person is not able to return to work for 12 months or more and;
When a person has accumulated enough work credits in the last 10 years to qualify.

30 Months to Become Medicare Eligible

The reason why it takes 30 months to become Medicare eligible after the individual has either applied or reapplied for SSDI is that:

The individual needs to wait one month after the date of injury to apply for SSDI.
After the SSDI applicate date, there is a waiting period of 5 months to receive SSDI entitlement.
From the date of SSDI entitlement, Medicare has 24 months waiting period to become Medicare eligible.

Medicare Set-Aside (MSA) – Not Required by Law

Did you know that a Medicare Set-Aside is not required by law? You should know the risks if you choose not to have a MSA prepared, by understanding CMS’ interpretation regarding MSP compliance. In the event there was a failure to address Medicare’s interest in the settlement, Medicare may refuse to pay future medical expenses that are injury-related until the entire settlement is exhausted.

Best Practices

Our highly trained Medicare Expert Case Advisors can help you figure out if Medicare may have an interest in your settlement. We assist all settling parties to navigate the MSP complexities and provide you with cost-saving strategies for your settlement.

To receive our complimentary MSA Decision Tree, “When Is a MSA Allocation Recommended?” click here.

Sandy Simpson

12/Oct/2021

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.4 on October 4, 2021. This Reference Guide replaces Version 3.3 which was released on April 19, 2021. There are a few notable changes when comparing the two Reference Guides. The yellow highlights below indicate the updated changes provided in Reference Guide Version 3.4.

CMS’s Version 3.4 Reference Guide, Section 1.1 includes the following changes:

To help ensure that funding information is provided for the WCMSA amount as part of a settlement agreement, clarification language has been added to several conditional letters (see Section 10.5 and the Approval and Development sample letters in Appendix 5).

To download the new WCMSA Reference Guide v3.4 Click Here.

☑ Section 10.5 wording change is as follows in yellow highlight:

“The parties can proceed with the settlement of the medical expenses portion of a WC claim before CMS actually reviews the proposed WCMSA and determines an amount that adequately protects Medicare’s interests. However, approval of the WCMSA is not effective until a copy of the final executed WC settlement agreement, which must include the funding information for the WCMSA amount, is received by CMS.”

☑ A similar word change was included in the Approval and Development sample letters in Appendix 5 of the Reference Guide to remind submitters that the method of funding is now required to be listed in the WCMSA submission.

☑ The approval letter to be included with the WCMSA submission to CMS should now include the language listed in the version appearing in Appendix 5 with the following statement in bold below:

“Approval of this WCMSA amount is not effective until the Centers for Medicare & Medicaid Services (CMS) receive a copy of the final executed workers’ compensation settlement agreement, which must include the funding information for this WCMSA amount.”

☑ Lastly, in Section 17.7 the WCMSA Reference guide updated references from MyMedicare.gov to Medicare.gov.

Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467. For any specific questions regarding MSAs of any type, click here.

Sandy Simpson

29/Apr/2021

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.3 on April 19, 2021. This Reference Guide replaces Version 3.2 which was released on October 5, 2020. There are a few notable changes when comparing the two Reference Guides. The blue highlights below indicate the updated changes provided in Reference Guide Version 3.3.

CMS’s Version 3.3 Reference Guide includes the following changes:

The CDC Life Table link was updated (Section 3).
Language around surgeries to be covered by seed money in a structured settlement was clarified, and a disclaimer was added to the proposal review reference tools list in Appendix 4, along with the Conduent Strataware® tool (Sections 5.2 and 9.4.4, Appendix 4).
Miscellaneous clarifications were added as follows (Sections 9.4.5, 10.2, 16.2, and 4):
- On pricing: include refills when pricing intrathecal
- On documentation: clarification was added on Consent to Release
- On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original
The Major Medical Centers table was updated for a Missouri entry (Appendix 7).

To download the new WCMSA Reference Guide v3.3 Click Here.

Change 1 – CDC Life Table Updated Link

Section 10.3

CMS Update: “CMS will project the cost of the claimant’s future treatment over the claimant’s life expectancy, using the Centers for Disease Control (CDC) Tables https://www.cdc.gov/nchs/data/nvsr/nvsr69/nvsr69-12-508.pdf

Please see the WCMSA site (http://go.cms.gov/wcmsa) for additional information.”

Change 2 – Seed Calculations Include Cost of First Surgery/Procedure for Each Injured Body Part

Section 5.2

Language around surgeries to be covered by seed money in a structured settlement was clarified.

Medivest’s Takeaway: Of these announced changes, the change of most significance is the clarification that CMS expects seed calculations to be evaluated for each affect body part of an injured worker. Text has been inserted in multiple locations for this purpose. We have placed references to the applicable Reference Guide section where the updated language appears and have quoted various portions of the existing language along with the revised/inserted language for context below, with the revised language appearing in blue highlight.
CMS’ Update: “A WCMSA can also be established as a structured arrangement, where payments are made to the account on a defined schedule to cover expenses projected for future years. In a structured WCMSA, an initial deposit is required to cover the first surgery or procedure for each body part, and/or replacement and the first two years of annual payments. The initial deposit (“seed money”) is followed by subsequent annual deposits (or a shorter time period if CMS agrees to such), based on the anniversary of the first deposit. If in any given coverage year, the deposited funds are not exhausted (i.e., used up, spent), they are carried forward to the next period and added to the next annual deposit. The whole fund, including carry-forwards, must be exhausted before Medicare will pay primary for any WC injury-related medical expenses. If the fund is exhausted appropriately in a given annual period, Medicare will pay primary for further WC injury-related medical expenses during that period. In the next annual period, the replenished WCMSA funds again must be used, until the WCMSA amount is appropriately exhausted.”

Section 9.4.4

Medivest’s Takeaway: Slight changes were also made under 9.4.4 Medical Review, Step Six, to clarify that seed calculations are to be performed for each affected body part/injured area as follows:
CMS’ Update – Section 9.4.4: “When annuity is selected, the submitter provides a proposed “seed” or initial deposit amount. This amount should include the cost of the first surgery/procedure for each body part, if any. The seed includes the first two years of the annual amount. See Section 05 – Cover Letter in this guide for instructions on how to calculate the seed amount, with an example.54r3efd

The seed includes the cost of the first surgery/procedure for each body part, including all costs such as prescription drugs, physician fees, anesthesia fees, and facility fees. If the surgery is preceded by an associated trial, i.e., trial SCS or trial intrathecal (IT) pump, the cost of the trial is also included since it is considered part of the same procedure. If there are no surgeries, the first procedure (if any, such as injections) is included. Series of spinal injections are not included, but series of knee visco supplementation are included if three are anticipated to be accomplished as a series of three weekly injections.

The first replacement of Durable Medical Equipment (DME), prosthesis, or orthotics is included in the seed funds if the cost of such items exceeds $500.

The seed includes the cost of surgeries, procedures, drugs, or replacement items as noted above. It does not include the cost of diagnostic studies, complications, and hospitalizations for non-surgical treatment.”

Other locations where the per body part is referenced include in 10.1 Section 05-Cover Letter:

on page 39:

. . .

“Note: Where the WCMSA is to be funded by a structured settlement, the cover letter

must disclose whether any portion of the projected prescription drug expenses has been included in the lump sum required to cover the first surgery/procedure for each body part,

and/or replacement and the first two years of annual payments.”

. . .

As well as in two places on page 40 under the same section:

“Example:

Total WCMSA = $301,826.90

Cost of first surgery for each body part, and/or the first procedure/replacement =

$10,191.40”

. . .

“Step 2. Identify the cost of the first surgery for each body part and the first

procedure/replacement ($10,191.40)”

Appendix 4-1 | WCRC Proposal Review Reference Tools

CMS’ Update: “Strataware® is a tool, for repricing medical bills to state mandated fee schedules, as well as usual, customary and recommended (UCR) rates.”

Change 3 – Pricing Updates Includes refills when pricing intrathecal pumps

Section 9.4.5 | Medical Review Guidelines Intrathecal (IT) Pumps

Pricing clarification was updated for Intrathecal pumps to stress that pump refills should be projected for the claimant’s life expectancy.

CMS Update: “The WCRC follows the most recent guidance from CMS on intrathecal (IT) pump pricing and frequencies. Permanent placement of IT pump devices are included every 7 years: the claimant’s life expectancy is divided by 7, decimals are dropped, and the whole number is used for determining replacement over the life expectancy. Pricing includes necessary pump refills over the claimant’s life expectancy.”

“Pricing for Spinal Cord Stimulator (SCS) Surgery

. . .

Consider the number of leads to be used.

Analysis Services: CMS LCDs (L34705 and L35648) can be billed every 30 days and more frequently in the first month. It should be priced four times in the first 30 days, monthly for the first year, and twice a year after the first year.

5. LCD L34705 – SCS (Dorsal Column Stimulation) – “Generally, electronic analysis services (CPT codes 95970, 95971, 95972, and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.”

6. LCD L35648 – SCS for Chronic Pain – Under Utilization Guidelines: “Generally, electronic analysis services (CPT codes 95970, 95971, 95972 and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.

Section 10.2 | Consent to Release Note

CMS’ Update: “Consent to Release documents must be signed (by hand or electronically) with the full name of either the claimant, matching the claimant’s legal name, or by the claimant’s authorized representative, if documentation establishing the relationship is also provided. It must be a full signature, not initials.”

Section 16.2 | Amended Review

On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.

CMS’ Update:
- In the event that treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for denied treatments will be required if medical records do not indicate a change. Requests for changes to treatment plans will not be accepted without supporting medical documentation.
- The approval of a new generic version of a medication by the Food and Drug Administration does not constitute a reason to request an amended review for supposed changes in projected pricing. CMS will deny the request for re-review if submitters fail to provide the above-referenced justifications with the request for re-review. Submitters will not be permitted to supplement the request for re-review, nor will they be developed.
- Re-review and amended review requests may be made electronically or by mail.

See the WCMSAP User Guide at https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual.pdf for details on electronic submission. Professional Administrators who are not the original submitter, see Section 19.4.

Section 19.4 | Change of Submitter

Provides Helpful Information to Professional Administrators that did not submit the WCMSA on How to Gain Access on the WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.

CMS’ Update: Professional Administrators whose EIN does not match the EIN of the original submitter, contact BCRC to gain access to the case via the WCMSA Portal; otherwise you must submit by mail. Submitter changes will not be accepted after settlement, and does not constitute a reason for a re-review (See Section 16.0 for re-review requirements). CMS will not provide copies of existing documentation to the new submitter. Any documentation must be obtained from the incumbent submitter or insurer.”

Change 4 – The Major Medical Centers table was updated for a Missouri entry (Appendix 7)

Click Here for the updated list of Major Medical Centers by State, NPI, and ZIP Code with the new Missouri entry.

Sandy Simpson

05/Apr/2021

NPRM: Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047)

The Office of Information and Regulatory Affairs Office of Management and Budget (OIRA/OMB) issued a Notice of Proposed Rulemaking (NPRM) for the Centers for Medicare & Medicaid Services (CMS) dated 03/00/2021 found here.

Essentially the proposed rule would clarify existing Medicare Secondary Payer Act (MSP) obligations associated with payment for future injury related and Medicare allowable medical items, services, and expenses, including prescription drug expenses (Future Medicare Allowable Medicals) related to settlements, judgments, awards, payments, or other arrangements (Settlements) paid by primary plans such as liability insurance plans (including self-insureds), No Fault plans, or Workers’ Compensation plans. Specifically, this rule would clarify that an individual Medicare beneficiary is responsible to satisfy Medicare’s interests with respect to Future Medicare Allowable Medicals related to such Settlements, in addition to the already well known and regulated obligation for Medicare beneficiaries and their attorneys to satisfy Medicare’s past interest in such Settlements by verifying the existence of and resolving any conditional payments (i.e. “Medicare liens”) stemming from Settlements.

This proposed rule would also remove obsolete regulations. While it is projected to focus on the protection of Medicare’s interests in the previously unregulated liability and No Fault Settlement market, the new NPRM could provide additional clarification regarding protecting Medicare’s future interests in Workers’ Compensation Settlements as well

Is this NPRM update laying the groundwork to issue the long awaited LMSA Regulations/Guidance? Only time will tell. Medivest will continue to monitor the OIRA/OMB website for any NPRM updates to keep you informed. You can be assured that Medivest is here to help guide you through some of the complexities associated with MSP compliance.

OIRA/OMB has issued similar proposed release date Notices of Proposed Rule Making (NPRM) for CMS regarding this RIN 0938-AT85 as follows:

Proposed Release Date: 03/00/2021 – https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202010&RIN=0938-AT85
Proposed Release Date: 08/00/2020 – https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&RIN=0938-AT85
Proposed Release Date: 02/00/2020 – https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201910&RIN=0938-AT85
Proposed Release Date:10/00/2019 – https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201904&RIN=0938-AT85
Proposed Release Date: 09/00/2019 – https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201810&RIN=0938-AT85

To stay up to date regarding any changes with LMSA Regulations/Guidance, please visit Medivest’s blogs:

Take Aways

Considering and protecting Medicare’s past interests has become the industry standard and a “no brainer” for all NGHP settlement types – liability, self-insurance, No Fault, and Workers’ Compensation.
Whether the announced guidance comes this August or not, it makes sense to help ensure that Medicare’s future interests are protected in accordance with existing federal law, i.e. the MSP.
Helping to ensure that Medicare is not prematurely billed for injury related futures for any settlement type is the right thing to do and helps protect the Medicare Trust Funds.

Sandy Simpson

21/Dec/2020

As we enter the final weeks of 2020, Medicare Secondary Payer Act (MSP) stakeholders will have to continue to wait for Liability Medicare Set-Aside (LMSA) Regulation/Guidance to be released. The last time the Centers for Medicare & Medicaid Services (CMS) mentioned the LMSA Regulation/Guidance it was scheduled to be released in August 2020. Professionals in the MSP industry have speculated that new regulations or guidelines are not likely to be published until March 2021, however as of December 17, 2020 no announcement date has been set. CMS first announced a Notice of Proposed Rulemaking (NPRM) to be issued in September of 2019 but has delayed the announcement multiple times over the past two years. The NPRM would “clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items and services related to liability (including self-insurance), no fault insurance, and workers’ compensation settlements, judgements, awards or other payments. Specifically, this rule would clarify that an individual or a Medicare Beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgements, awards, or other payments. This proposed rule would also remove obsolete regulations.”

Injured individuals, their attorneys, and entities settling liability claims, including consultants that assist in the settlement process such as structured settlement and MSP compliance planners/consultants (Settlement Professionals) interested in complying with the MSP and ensuring that Medicare will not make payments for injury related and Medicare covered medicals post settlement, have regularly read and interpreted the CMS Stalcup Handout dated 05/25/2011, characterizing the obligation of considering and protecting Medicare’s interests in liability and Workers’ Compensation settlements as being one and the same (see below). Furthermore, in the absence of specific regulations or guidance directed toward liability settlements, Settlement Professionals have also read and interpreted the guidance issued by CMS in its Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide v 3.2.

The WCMSA Reference Guide of course only gives examples of situations where Workers’ Compensation settlements fall outside the workload review thresholds allowing for review by CMS but in the two examples it provides in Section 8.1 titled Review Thresholds, it indicates that “not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the Settlement.” In the same section of the Reference Guide, CMS indicates in another example, “The settling parties must consider CMS’ future interests even though the case would not be eligible for review.” Because of the double damages provision allowed for recovery actions under the MSP, and regardless of what CMS’ enforcement position has been in the past, insurance carriers, Self-Insureds, and attorneys representing injured plaintiffs have taken precautions to reduce the likelihood of any recovery against them for future conditional payments. Many have surmised that this is only a plaintiff issue and have argued insurance companies and Self-Insured need not worry about Medicare covered futures. Nobody knows exactly where the future guidance in this area is going to fall but it is clear that Medicare’s Trust Funds need protecting because as recently as 2018, Congress predicted Medicare’s Part A Trust Fund to be depleted in 2026.*

Highlights from the CMS Stalcup Handout 05/25/2011

…“Medicare’s interests must be protected; however, CMS does not mandate a specific mechanism to protect those interests. The law does not require a ‘set-aside’ in any situation. The law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Workers’ Compensation or Liability case. There is no distinction in the law.”

…here is no formal CMS review process in the liability arena as there is for Workers’ Compensation. However, CMS does expect the funds to be exhausted on otherwise Medicare covered and otherwise reimbursable services related to what was claimed and/or released before Medicare is ever billed. CMS review is decided on a case by case basis.

…“Each attorney is going to decide, based on the specific facts of each of their cases, whether or not there is funding for future medicals and if so, a need to protect the Trust Funds.”

Click here to download entire memo

Office of Management and Budget (OMB) issued the following Notices of Proposed Rule Making (NPRM) regarding RIN 0938-AT85:

To stay up to date regarding any changes with LMSA Regulations/Guidance, please visit Medivest’s blogs::

Take Aways:

Considering Medicare’s interests in any settlement with some type of analysis regarding the protection of those interests has become the industry standard for all NGHP settlement types – liability, self-insurance, No Fault, and Workers’ Compensation.
Whether the announced guidance comes out soon or not, doesn’t it make sense to help ensure that Medicare’s future interests are considered and protected in accordance with existing federal law – i.e. the MSP?
Helping to ensure that Medicare is not prematurely billed for injury related future Medicare covered medicals for any settlement type is the right thing to do and helps protect the Medicare Trust Funds.

Medivest will continue to monitor the OMB website for any NPRM updates in order to keep you informed. Count on Medivest to help guide you through some of the complexities associated with MSP compliance.

* Medicare has two Trust Funds. One for Part A that covers hospital insurance for the aged and disabled and one for both Part B that mainly covers doctors’ visits and Part D that covers prescription medications, for the same population of Medicare enrollees. It was announced in June 2018 that the Part A Hospital Insurance (HI) Trust Fund is projected to be depleted in 2026, three years earlier than predicted just a year ago. The Part B and D Trust Fund is not as bad off due to a financing system with yearly resets for premium and general revenue income and is projected to have adequate funding for the next ten years and beyond.

Total Medicare expenditures were reported to be $710 billion in 2017. Medicare expenditures were projected to increase at a faster pace than either aggregate workers’ earnings or the economy, and to increase from approximately 3.7 percent in 2017 to between 6.2 percent and 8.9 percent as a percentage of Gross Domestic Product (GDP) by 2029, causing substantial strain on our nation’s workers, the economy, Medicare beneficiaries, and the Federal budget.

A 2018 Annual Report of the Boards of Trustees of the two Medicare Trust Funds recommended a legislative response [2] to help protect the Part A Trust Fund. However, instead of waiting years for Congress to act, if parties to third party or workers’ compensation settlements involving Medicare beneficiaries [3], proactively address both past and future interests of Medicare, that could help slow Medicare Trust Fund depletion, in line with the above-described intent of the MSP.

Sandy Simpson

20/Nov/2019

Are you self-administering your Medicare Set-Aside (MSA) funds or do you have a client doing so? If so, you are not alone. According to the National Council on Compensation Insurance, Inc. (NCCI) recently published a research brief updating its 2014 study on Workers’ Compensation MSAs (WCMSAs) and WCMSA reviews and reported that, between 2010 and 2015, approximately ninety-eight percent (98%) of the Workers’ Compensation cases included in the over 10,000 case sample, settled with the injured worker choosing to self-administer their MSA funds. Due to the large percentage of injured workers opting to self-administer, the Centers for Medicare & Medicaid Services (CMS) published a free downloadable, 31-page “Self-Administration Toolkit”, now in Version 1.3 which was updated on October 10, 2019.

If you’re a Claimant/Applicant/Petitioner’s attorney settling a WC case and your client is considering self-administration, below are a couple of blogs you may consider reading before deciding if self-administration is the best option.

CMS simply states that a competent administrator must be chosen to administer the MSA funds. The key word is competent, and it is the responsibility of the settling parties to deem whether the injured person is sufficiently competent to self-administer an MSA account. Below are a couple of scenarios regarding options for administration of MSA funds.

Injured Person Self-Administers his/her MSA Funds – The injured person handles his/her own MSA funds and assumes responsibility for handling the MSA funds per CMS’ guidelines for Medicare Secondary Payer (MSP) compliance.
Engage a Professional Administrator – Engage a third-party professional administration company to administer the MSA funds, coordinate all aspects of billing, complete annual reporting to Medicare as needed, maintain accounting records, etc. The Administrator assumes responsibility for handling the funds per CMS’s guidelines for compliance. Per CMS’s guidelines, fees for professional administration cannot be deducted out of the corpus of the MSA funds.
Engage A Trustee – Engage a person or professional entity (like a bank or trust company) who manages property or assets that have been placed in a Trust (i.e. a Special Needs Trust (SNT)). Per CMS’s guidelines, fees for a trustee cannot be deducted out of the corpus of the MSA funds.
Appointed Guardian or Conservator – An individual that has been determined to be mentally or physically incapacitated by a court of law, or when a minor is in need of an adult to manage his/her property, a guardian or conservator may be appointed.

Post Settlement Tips for Self-Administration

Per CMS’ guidelines, do not co-mingle MSA funds with personal funds. Place the MSA funds into a separate, interest bearing, FDIC insured account.
Keep pertinent documents regarding the settlement in a safe place. You may need to refer to these documents for paying claims, if applicable. Examples include: o Executed Settlement
o Power of Attorney
o Conservator or Guardianship appointment
o Trust documents
o MSA Allocation Report / Life Care Plan / Medical Cost Projection Report
or a report that was prepared and used in the settlement to determine
and allocate the total future Medicare Set-Aside (MSA) funds.
o CMS Approval Letter, applicable if the MSA was submitted to CMS for review
o Accurate annual accounting, post settlement
o Keep track of all post settlement expenses, receipts paid and copies of bills
o Annual attestation letters, post settlement (these can now be submitted electronically)
o Any correspondence from CMS, post settlement
Document Retention – How long should you keep settlement documents, CMS letters, etc? These documents you may want to keep for the life of your account. How long should you keep payments of medical bills, annual accounting, and yearly attestations? State laws generally govern how long medical records are to be retained. However, the Health Insurance Portability and Accountability Act of 1996’s (HIPAA) administrative simplification rules require a covered entity, such as a physician billing Medicare, to retain required documentation for six years from the date of its creation or the date when it last was in effect, whichever is later. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE1022.pdf
What type of MSA funding arrangement was decided at the time of settlement? There are two types of MSA funding arrangements.
1. Lump Sum Funding – After settlement, a check for a one-time payment representing all future medical expenses that are injury related and Medicare allowable is issued.
2. Structured Annuity Funding – A combination of a check for the initial deposit or seed money used to fund the MSA. The amount of the seed deposit typically includes the first surgical procedure or replacement and the equivalent of two years of annual funds along with the yearly annuity payment beginning on the 1-year anniversary of settlement. Note: Medicare recognizes a structured settlement annuity as a viable method of funding MSAs. Medicare will become the primary payer of injury-related medical expenses, once documentation is provided showing the MSA funds were spent appropriately and there is no other available primary coverage to pay for injury-related Medicare covered medical expenses – until the next upcoming annuity payment has been deposited into the MSA account. For topics unique to Structured WCMSA Accounts, please refer to this link.
Before the injured person’s case settles, the WC claims adjuster typically will have paid for medical treatments and prescription medication that were related to the injury. After settlement occurs, the MSA funds should be used to pay injury-related and Medicare allowable expenses from the settlement date forward until exhausted.
If you are a Medicare beneficiary, you will need to continue to pay Medicare premiums, co-payments, and deductible amounts. Medicare updates its plans, premium costs, and coverage on a yearly basis. Each year, Medicare publishes a free downloadable handbook called “Medicare and You”.
If the injured person is Medicare eligible, he/she can add coverage to or change his/her plan during Medicare’s Open Enrollment period. The Open Enrollment period would not have an impact on their MSA Funds that they are currently self-administering. Every year, Medicare’s Open Enrollment period begins October 15th and ends December 7th for most Medicare plans. For Medicare Advantage plans, open enrollment runs from January 1st through February 14th. Medicare has designed a Medicare Plan Finder which it describes as a convenient way to compare coverage options, shop for plans, and feel confident about the coverage choices Medicare enrollees make. It also lets Medicare beneficiaries build and track their drug list to determine the best Part D (prescription drug) plan that meets their medical needs, including the display of lower-cost generic alternatives. Some details regarding Medicare Advantage Plans can be reviewed by clicking this link so you can compare covered benefits.
Medicare-Certified Providers – When choosing providers to receive care, consideration should be given whether the providers will be able to bill Medicare in the event MSA funds have either temporarily or permanently exhausted (depleted), or in the event a Medicare beneficiary may need Medicare covered treatment that is not injury related. If a provider cannot file claims to Medicare, the Medicare beneficiary may be billed for services in select circumstances. To locate providers that are Medicare-certified, please click here.
Reimbursement of Medicare Conditional Payments before and after settlement. If Medicare pays for care related to your injury, it may be doing so on the condition that Medicare will later be reimbursed for such payments. More information about Medicare’s right to recovery may be found here.
At the end of each year, interest earned on MSA funds will need to be identified as interest income generated from the MSA account for the prior tax year. Under CMS’ guidelines, the interest earned is to be deposited and remain in the MSA account to pay only for Medicare allowable expenses related to the injury, or used for other allowable purposes, such as to cover banking fees related to the account, mailing/postage fees related to the account, miscellaneous related document copying charges, and income tax on interest income from the MSA account.

Mismanaged MSA Funds

During the pre-settlement phase, the pricing of medical items and services for most MSA allocation reports are prepared using Workers’ Compensation state fee schedules for the state where the injury occurs. For liability cases, those medical items and services are priced at the Usual and Customary rate for the geographic region. For both WC and liability cases, prescription drug expenses are typically priced at Average Wholesale Pricing (AWP). Injured parties might not subscribe to or otherwise access the AWP pricing rates or state fee schedule rates and could end up paying for medical treatment or prescriptions drugs at amounts higher than they should.
When the injured person mistakenly pays for a non-Medicare allowable expense out of the MSA account, Medicare reserves the right to deny all injury-related Medicare covered claims until the MSA funds have been replenished or the injured worker can demonstrate appropriate usage equal to the full amount of the MSA.
If a provider mistakenly sends the bill to Medicare when it should have been paid out of a MSA account, the claim may be denied by Medicare and this could lead to CMS initiating an audit of the MSA funds.
Medicare may accidentally pay for an injury-related claim when it should have been paid out of the MSA account. The injured person may end up being billed or charged for the Medicare copay, coinsurance, or deductible amount, and later, still have to reimburse Medicare from the MSA funds.

When considering all the factors described above, doesn’t it make sense to strongly consider the use of a professional administrator? Also, The Centers for Medicare & Medicaid Services (CMS) published in the WCMSA Reference Guide, that professional administration is highly recommended.

Simply put, Professional Administration makes sense. If you are an attorney or an injured person who has questions regarding switching from self-administration to professional administration, Medivest is here to answer any questions you may have.

Sandy Simpson

22/Oct/2019

The Centers for Medicare & Medicaid Services released Version 1.3 of the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs) on October 10, 2019. The latest Self-Administration Toolkit Version 1.3 is now available to download here. Furthermore, the newest version 5.9 of the WCMSAP User Guide was updated on October 7, 2019. That can be accessed here. It contains updates similar to those found in the updates to the Self-Administration Toolkit discussed in this article.

The three most notable changes included in Version 1.3 are as follows:

1. A new method for submitting annual attestations electronically via the WCMSA portal (WCMSAP).

Section 8: Annual Attestation – of the Self-Administration Toolkit conformed its language to that of the WCMSA Reference Guide, Section 19.2 titled Death of The Claimant, and can be viewed here. Now, self-administering claimants can access and submit attestations via the same WCMSAP web portal that professional administrators use.

If you are a beneficiary administering your own account, you can submit your year attestation online by accessing the WCMSA Portal through the MyMedicare.gov website.

If you are a representative or other identified administrator for the account, you can log in directly to the WCMSA Portal to submit the yearly attestation. To access, go to https://www.cob.cms.hhs.gov/WCMSA/login

The WCMSAP User Guide, available under the Reference Materials header once you log in to the site, has details regarding the submission of attestations online.

CMS will be hosting two (2) webinars regarding the recent WCMSAP enhancements which will allow Medicare beneficiaries or their representatives to submit annual attestations electronically for approved WCMSAs.

Workers’ Compensation Medicare Set-Aside (WCMSA) Electronic Attestation Enhancement Webinar. Click here for more information regarding this seminar taking place on Wednesday, October 30, 2017 at 1:00pm EST.
Workers’ Compensation Medicare Set-Aside (WCMSA) Electronic Attestation Enhancement for Professional Administrators. Click here for more information regarding this seminar
taking place on Wednesday, November 6, 2019 at 1:00pm EST.

2. A more detailed description of why WCMSA accounts are kept open for a period of time after the death of the Medicare beneficiary when WCMSA funds have not permanently exhausted.

Section 10: Inheritance – Added language regarding notifying the BCRC when death of the Medicare beneficiary occurs before the WCMSA is permanently exhausted. A summary follows: In such cases, the respective Medicare Regional Office (RO) and the BCRC will coordinate to help ensure all timely filed bills related to the WC claim have been paid. This may involve keeping the WCMSA account open for some time after the date of death, as health care providers can submit their bills to Medicare up to 12 months after the date of service. Any remaining WCMSA funds may be paid in accordance with the respective state law and administration agreement if applicable, once Medicare’s interests have been protected. Often the settlement itself will state how to spend funds after the death of the claimant and payment of care-related expenses.

3. Updated mailing addresses for the Benefits Coordination and Recovery Center (BCRC)

Section 12: Where to Get Help – The mailing address to where WCMSA Proposals, Final Settlements, and Re-Review Requests are to be sent was updated to be consistent with the current WCMSA Reference Guide. That address is:

WCMSA Proposal/Final Settlement
P.O. Box 13889
Oklahoma City, OK 73113-8899

On Page 18 of the Self-Administration Toolkit

The mailing address for situations when the WCMSAP or MyMedicare.gov portals are not being used, self-administering claimants may submit attestations yearly account attestations and expenditure letters to the following address:

NGHP
P.O. Box 138832
Oklahoma City, OK 73113

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Getting Familiar With Public Benefits

Government benefits are categorized into two types which are Needs-Based Benefits and Entitlement Benefits.

Needs-Based Benefits – Also referred to as “means-tests,” these are based on an individual’s income and/or assets

Non-Needs Based Benefits Aka Entitlements Based – These are determined by what an individual has contributed or paid into a given benefits system

Common Government Benefits

Below is a list and summary of the most frequently used government benefit programs. However, this is not a complete list, and a full investigation of a client’s use of government benefits should be conducted before the settlement process begins.

Medicare

Social Security Disability (SSDI)

Payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide monthly benefits to people who have a medically determinable disability that restricts their ability to be employed.

Social Security Income (SSI)

Means-tested program that provide cash payments to disabled children, disabled adults, and individuals aged 65 or older who are citizens or nationals of the United States.

Medicaid

Health coverage programs operated by states, within broad federal guidelines. Although the federal government pays a portion of the costs, Medicaid is administered and operated by states, and each state’s program is different and based on the needs and goals of the individual state.

Medicaid Adult / Disability-Based

Permanently disabled & unable to work

Only Income Test applies in California

Income & Asset Test applies

Supplemental Security Income (SSI) recipients

In-Home Support Services (IHSS) recipients

Home & community-based waivers participants

Long-Term Care Facility residents

Medicaid Adult / Non-Disability Based

Able to work & income is below the Federal Poverty Level (FPL)

MAGI Medicaid on household income

Assets are not counted toward

Pregnant women

Medicaid – Children Health Insurance Program (CHIP)

This program is administered by the United States Department of health and Human Services that provides matching funds to states for health insurance to families with children.

Section 8 – Housing Assistance

Veterans Administration (VA)

The United States Department of Veterans Affairs of the federal government providing life-long healthcare services to eligible military veterans at VA medical centers and outpatient clinics.

Our Complimentary Reference Guide for Government Benefit Protection

What is the Medicare Secondary Payer Statute?

What is a Medicare Set-Aside (MSA) Proposal?

Guidance from Medicare for Liability Cases

Litmus Test – Is a MSA Proposal Recommended?

In order to determine if a MSA allocation is recommended to cover Medicare’s interest in your settlement, there are several key items to review. Attorneys can do a quick MSA litmus test to determine whether or not a MSA is recommended.

Your client is currently Medicare-eligible

Your client is 62.5 years old and within 30 months of becoming eligible for Medicare benefits

Your client has either applied for Social Security Disability Insurance (SSDI) or has an open or pending application Will there be any money after medical liens have been resolved to fund a Medicare Set-Aside (MSA) account?

Medicare Eligibility

What is Medicare’s criteria for an individual to become Medicare eligible? Medicare is available for people aged 65 or older, younger people with disabilities, and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).

Social Security Disability Insurance (SSDI)

An individual who has either applied or has reapplied for Social Security Disability Insurance can become Medicare eligible. Social Security Disability Insurance (SSDI) is a federal program that helps those who have become disabled from work. An individual can apply for SSDI when:

A person is unable to engage in any “substantial gainful activity” due to an illness or disability and;

When a person is not able to return to work for 12 months or more and;

When a person has accumulated enough work credits in the last 10 years to qualify.

30 Months to Become Medicare Eligible

The reason why it takes 30 months to become Medicare eligible after the individual has either applied or reapplied for SSDI is that:

The individual needs to wait one month after the date of injury to apply for SSDI.

After the SSDI applicate date, there is a waiting period of 5 months to receive SSDI entitlement.

From the date of SSDI entitlement, Medicare has 24 months waiting period to become Medicare eligible.

Medicare Set-Aside (MSA) – Not Required by Law

Best Practices

Our highly trained Medicare Expert Case Advisors can help you figure out if Medicare may have an interest in your settlement. We assist all settling parties to navigate the MSP complexities and provide you with cost-saving strategies for your settlement.

To receive our complimentary MSA Decision Tree, “When Is a MSA Allocation Recommended?” click here.

CMS’s Version 3.4 Reference Guide, Section 1.1 includes the following changes:

Change 1 – CDC Life Table Updated Link

Change 2 – Seed Calculations Include Cost of First Surgery/Procedure for Each Injured Body Part

Change 3 – Pricing Updates Includes refills when pricing intrathecal pumps

Change 4 – The Major Medical Centers table was updated for a Missouri entry (Appendix 7)

NPRM: Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047)

OIRA/OMB has issued similar proposed release date Notices of Proposed Rule Making (NPRM) for CMS regarding this RIN 0938-AT85 as follows:

To stay up to date regarding any changes with LMSA Regulations/Guidance, please visit Medivest’s blogs:

Take Aways

1. A new method for submitting annual attestations electronically via the WCMSA portal (WCMSAP).

2. A more detailed description of why WCMSA accounts are kept open for a period of time after the death of the Medicare beneficiary when WCMSA funds have not permanently exhausted.

3. Updated mailing addresses for the Benefits Coordination and Recovery Center (BCRC)

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