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Medivest
24/Mar/2022
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WCMSA Reference Guide Version 3.6 Updates of Significance

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.6 on March 15, 2022. This Reference Guide replaces Version 3.5 on January 10, 2022. 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 3.6.
To download the new WCMSA Reference Guide v3.6 click here.
Version 3.6 of this guide includes the following changes:
Clarification has been provided regarding the use of non-CMS-approved products to address future medical care (Section 4.3), as well as documentation and re-review tips (Sections 9.4.1.1, 10.2, and 16.1).

 

4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care – Additions and Replacements

A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.”
42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.
As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.
CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met. 

 

9.4.1.1 Most Frequent Reasons for Development Requests – Expanded Explanations

The five most frequent reasons for development requests by the WCRC:
    1. Insufficient or out-of-date medical records. Medical records are required documents for all submissions, including situations where the parties are in dispute.
    2. Insufficient payment histories, usually because the records do not provide a breakdown for medical, indemnity or expenses categories. Payment histories are required documents for all submissions, including situations where the parties are in dispute, and must include breakdowns for payment categories along with identification of any category codes.
    3. Failure to address draft or final settlement agreements and court rulings in the cover letter or elsewhere in the submission. Draft or final settlement agreements and court rulings are required documents for all submissions, if they exist. For settlements where conditional payments are made as an element of the agreement, the WCRC will not accept a letter indicating that draft or final settlements do not exist.
    4. Documents that are referenced in the file are not provided—this usually occurs with court rulings or settlement documents.
    5. References to state statutes or regulations without providing sufficient documentation (i.e., to which payments the statutes/regulations apply or a copy of the statute or regulation, or notice of which statutes or regulations apply to which payments).

 

10.2 Section 10 – Consent to Release Note – Additions

The Consent to Release note is the claimant’s signed authorization for CMS, its agents and/or contractors to discuss his or her case/medical condition with the parties identified on the authorization in regard to the WC settlement that includes a WCMSA. When you submit your WCMSA, you are required to include the signed consent, plus any applicable court papers if the consent is signed by someone other than the claimant (for example, a guardian, power of attorney, etc.). Do not include unsigned consents or consents to obtain medical records from a provider.
All consent-to-release notes must include language indicating that the beneficiary reviewed the submission package and understands the WCMSA intent, submission process, and associated administration. This section of the consent form must include at least the beneficiary’s initials to indicate their validation.
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 just initials. For electronic standards, only the use of an E-SIGN Act-compliant e-signature or initials are considered valid.
If there is a change in submitter, please see Section 19.4 for more information.

 

16.1 Re-Review – Additions

A request for re-review may be submitted based one of the following:
    1. Mathematical Error: Where the appropriately authorized submitter or claimant disagrees with CMS’ decision because CMS’ determination contains obvious mistakes (e.g., a mathematical error or failure to recognize medical records already submitted showing a surgery, priced by CMS, that has already occurred), or
    2. Missing Documentation: Where the submitter or claimant disagrees with CMS’ decision because the submitter has additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal and which warrants a change in CMS’ determination.
      • Disagreement surrounding the inclusion or exclusion of specific treatments or medications does not meet the definition of a mathematical error.
      • Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.
      • Should no change be made upon response to a re-review request (i.e. no error was identified), additional requests to re-review the same error will not be entertained.”

 

Analysis

The removal of the reference to indemnification in the first part of Section 4.3 seems to have been CMS’s way of expressing its realization that the intent of settling parties in using non-submit WCMSAs is to protect Medicare’s interests as opposed to being designed merely to protect against MSP exposure via a shift of risk from one company’s errors and omissions coverage to another’s.
[Old Section 4.3 phrase]: “with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries.” [New Section 4.3 phrase]: “for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide.”
Does the additional language about expectations for WC settlements that do not meet workload review threshold in Section 4.3 now really clarify what the plan for future care should be when the two examples in Section 8.1, titled Review Thresholds still describe recoveries by CMS for payments and care related to the injury up to the total value of the settlement if the settling parties fail to consider Medicare’s future interests/fail to establish “some plan for future care” ?  The referenced examples are listed below for ease of access:
Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00).
Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The  steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. 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.

 

Stay Up To Date

Count on Medivest to help you navigate your risk tolerance in light of the new CMS WCMSA Reference Guide language to see if we can’t find the right balance to reasonably protect Medicare’s interests in your settlement. Medivest will continue to monitor changes in the guidance and regulations published by CMS and will keep its readers up to date when such changes are announced/made. For questions regarding these updates, please reach out to a Medivest representative in your area by clicking here or by calling us direct at 877.725.2467.

 

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Craig Pawley, Vice President of Business Development
01/Mar/2022
cmswcmsawebinar

Summary of CMS’ February 17th Webinar with Commentary

On February 17, Centers for Medicare & Medicaid Services (CMS) held a webinar concerning Workers’ Compensation Medicare Set-Aside (WCMSA) and updates from Section 4.3 of the New WCMSA Reference Guide. John Jenkins, Health Insurance Specialist for CMS, and Contracting Officer’s Representative (COR) hosted the presentation and addressed a variety of questions on the topics.

Note: CMS opened the call with a disclaimer indicating that if there are any discrepancies between what is said on the call and what is written in the Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (WCMSA Reference Guide or Reference Guide), what is written in the Reference Guide will control.

Treatments

When the Injured Worker (IW), due to comorbidities, is not medically cleared to have a recommended surgery CMS still wants the surgery to be included in the Medicare Set-Aside (MSA). It cannot assume the IW will not be able to meet the medical clearance requirement in the future.

 

No Treatment Necessary

  • According to Jenkins, if there is a reasonable expectation that there is or will be future treatment for an ongoing medical condition, the Workers’ Compensation Review Contractor  (WCRC) has a reasonable expectation that future care should be projected. If a specialist opines that care has concluded, the WCRC feels that it is extremely rare that an individual has only one provider, and there may be other providers including a primary treating physician that would recommend future care. If the individual truly does not need future care beyond a settlement and this is documented, the file should not rise to the level that requires submission. *
Medivest commentary: While not specifically mentioned on the call, Section 4.2 of the Reference Guide lists three requirements that should be met for this no future treatment necessary to take effect as an indication that Medicare’s future interests in a settlement are protected: 
“4.2     Indications That Medicare’s Interests are Protected
Submitting a WCMSA proposed amount for review is never required. But WC claimants must always protect Medicare’s interests. A WCMSA is not necessary under the following conditions because when all three are true, they indicate that Medicare’s interests are already protected:
        1. The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement);
        2. 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
        3. 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 WC injury.”

 

Denial / State Specific / Hearings on the Merit

  • CMS recognizes there is such a thing as a legal denial. Jenkins emphasized that CMS standards say there must be some written response from a court of competent jurisdiction or associated board with authority under the law, pursuant to a disputed hearing on the merits. CMS will not decide whether a specific medical condition is or is not causally related to the compensated claim or whether it is or is not catastrophic if a statute limits WC benefits after a set time for catastrophic injuries. If you submit an unfunded “Zero MSA” for approval, CMS and its WCRC expects that such legal support will be included as documentation for the same. Any documentation must be signed by the legal authority.

 

Regarding a Medical Item, Service, or Expense Recommended by the Treating Physician but Denied by an Independent Medical Review (IMR)

  • It depends on whether an alternative treatment plan is provided. In California, the initial IMR denial is only good for a period of one year and does mean that the denial won’t be overturned on appeal. CMS’s position is if a submitter is going to send in a package and has an item, service, or a prescription drug that the IMR states does not meet the requirements of appropriate treatment, then the item, service, or expense will not be considered unwarranted by the WCRC unless an alternative treatment is provided. If there is no alternative item, service, or expense provided by the treating physician after any such denial, CMS will default to what the treating physician originally recommended.
Medivest commentary: This discussion addressed several areas discussed in the Reference Guide under Section 9.4.5 Medical Review Guidelines specifically listed in its subsection titled State-Specific Statutes, with the main points being listed below for additional clarification:
“A submitter requesting that CMS review the applicability of a state WC statute must include a copy of the statute with the submission and indicate to which section the topic in the submission the statute applies.
Submitters requesting alteration to pricing based upon state-legislated time limits must be able to show by finding from a court of competent jurisdiction, or appropriate state entity as assigned by law, that the specific WCMSA proposal does not meet the state’s list of exemptions to the legislative mandate. For those states where treatment is varied by some type of state-authorized utilization review board, the submitter shall include the alternative treatment plan showing what treatment has replaced the treatment in question from the beneficiary’s treating physician for those items deemed unnecessary by the utilization review board. Failure to include these items initially will result in pricing at the full life expectancy of the beneficiary or the original value of treatment without regard to the state utilization review board recommendation.
Note: Failure to include the required documentation at the time of original submission will not constitute a reason for the request of a re-review.”

 

Regarding RX Drugs

  • CMS is open to input from the MSP compliance community regarding improvements that might be made in the future regarding dispensing fees and the lowest-priced accepted national drug code at below average market rate.

 

Amended Review Process

  • CMS did not answer the question posed regarding approved cases that are over 72 months old and did not settle and whether the original MSA approval should be funded for approved cases.

 

Regarding Annual Attestation

  • Jenkins says CMS places a flag in their system related to body parts and treatment as a result of the CMS submission. That flag will not be removed from the system until the individual provides the attestation as per CMS guidelines.

 

Regarding Data Sharing with Part D Prescription Drug Plans (PDPs)

  • CMS is not currently sharing all data with Part D plans because those part D plans have not specifically requested it.

 

Regarding Non-CMS Approved MSAs

  • CMS indicated it had received a lot of questions regarding non-submit MSAs, so that was the driving force behind the inclusion of Section 4.3 in the recently updated WCMSA Reference Guide.
  • Jenkins indicated that CMS’s position with under-threshold WC settlements is that they never would have seen them. He indicated that CMS will issue additional clarification on how to handle those cases in the future.
Medivest commentary: Presumably to add clarification to Section 8.1 entitled Review Thresholds that already provides the two specific examples listed below to illustrate CMS expectations when a WC settlement does not meet Workload Review Threshold: 
“Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00).
Example 2: A 47-year-old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. 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.”
  • With respect to non-approved products, CMS is still putting a marker in their system indicating there is a MSA. The marker allows CMS to avoid making payment.
Medivest commentary:  What was not discussed was how WC settlements compensating for future medicals but not submitted for approval to CMS (such as Evidence-Based Medicine MSAs or other non-submit WCMSAs) that are reported by Responsible Reporting Entities (RREs) for self-insured employers or WC carriers under Section 111 Mandatory Insurance Reporting will also be flagged for medical denials. RREs report the ICD diagnosis codes being compensated in a settlement at the time of their electronic Section 111 submission of data including the total settlement amount. Because an approved WCMSA amount is not listed for non-submitted WCMSAs, the default in the Common Working File (CWF) for the WCMSA amount is the settlement amount. Therefore, it seems highly likely that CMS will become more and more efficient in setting the system flags to deny future payments of medicals that correspond to compensated ICD codes deemed by RREs to be associated with a WC settlement. While the remedy of a denied medical is an appeal, if the goal is to not have an injured worker experience a future Medicare medical denial, CMS seems to suggest that the best way to address this issue would be to submit those WC settlements that meet workload review thresholds.
  • The non-CMS approved products do not allow CMS to put a marker in the system and block payment. Until recently, no one provided CMS with that documentation.
Medivest commentary:  This statement seemed to contradict the prior statement. The theory initially described was that only submitted WCMSAs are flagged for medical denials to help ensure that CMS complies with the MSP by not paying for medicals when the items, services, or expenses for those specific ICD codes were compensated by the WC settlement.  There was no discussion during this webinar on the interplay between Section 111 data and the data obtained via the WCMSA submission process.  We hope that CMS will clarify this issue moving forward.
  • There is the possibility the beneficiary will have to expend some of their funds outside of the MSA in a non-approved product situation – it was stated CMS was allowed to deny medicals up to the entire net settlement (allowing for a deduction for procurement costs to be consistent with existing MSP regulations).
  • CMS does not recognize the use of structured settlements for non-submitted MSA products. The individual must demonstrate they have exhausted the full value. CMS will only consider them as a lump sum settlement. CMS will not make payment until the full MSA amount has been exhausted even if they are notified the funding of the MSA was via structure.
  • The WCMSA does not demonstrate post-settlement compliance. The WCMSA is strictly an agreement between CMS and the CMS beneficiary about what dollar value/time, CMS will return as a primary payor if they can show the funds were used correctly. This is an agreement between CMS and the beneficiary only.
  • CMS will stick to the release date of Jan 11th, 2022, regarding how it handles the use of non-CMS approved products.
  • “If a non-approved product is priced correctly, Medicare is never going to see a bill.”
Medivest commentary: This was possibly the most important statement made by Jenkins.  He is admitting the reality that there certainly can be reasonably priced non-submit MSAs that do exactly what they were intended to do.  If the non-submit MSA accurately reflects the Medicare beneficiary’s injury related Medicare covered medicals and is exhausted exclusively for those purposes, then clearly Medicare’s interests have been protected because Medicare will not be prematurely (or ever) billed for those medicals.

 

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.

 

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Medivest
23/Feb/2022
medicaidmsawcmsa

Medicare Set-Asides and Medi-Cal Eligibility

On November 16, 2021, the State of California’s Medicaid Agency, the Department of Health Care Services (DHCS or Medi-Cal), issued an All County Welfare Directors Letter (ACWDL or Letter) number 21-26 as a memo to all counties and people who administer various state based benefits, including all Medi-Cal Program Specialists/Liaisons.
The Letter provides clarification on Medicare Set-Aside (MSA) funds, as defined by CMS in the Workers’ Compensation realm. The primary message is that “MSAs, also called Workers’ Compensation Medicare Set-Aside Arrangement Accounts (WCMSA), are not countable as income and property on the basis of their unavailability when determining an individual’s eligibility for Medi-Cal.”
This can be significant for several reasons outlined in the Takeaways section.  Traditionally, an injured party that was otherwise eligible for need based benefits would be advised by their attorney to have a 1st Party Special Needs Trust of some type (individual or Pooled Trust – together referred to here as an SNT) established to help assure the eligibility of those benefits at that time or in the future.  However, there may be times when the cost of establishing such an SNT might be cost prohibitive compared to the value of the benefits to be protected.

Summary

The Letter describes that because the funds in the MSA account are to be used for their intended purpose, covering the costs of future medical needs [that are injury related and Medicare covered], they should be considered unavailable income and not countable when determining an individual’s eligibility for Non-Modified Adjusted Gross Income (MAGI) programs. However, the Letter indicates that it is important to note that interest or dividends generated by the interest-bearing account should be considered available income for MAGI eligibility determination.
The Letter explains that MSAs had previously been determined to not be countable as property pursuant to a previous All County Welfare Directors letter numbered 90-01 from 1990.  “MSA funds are considered unavailable property under ACWDL 90-01 (January 5, 1990), Section 50402 of that letter.”
The Letter also provides guidance to California counties on MSAs regarding:
    • MAGI eligibility
    • Non-MAGI eligibility concerning:
      • Property
      • Income
    • Tasks that are County responsibilities
    • Tasks that are NOT County responsibilities
The full ACWDL 21-26 Letter with additional details and information is available here.

Takeaways

  • This Letter does not discuss settlements that exceed the WCMSA amount. Settlements that exceed the WCMSA amount meaning they exceed the injury related Medicare covered medical items, services, and expenses reasonably expected for the injured party and that are paid outside the WCMSA, might disqualify the injured party from Medi-Cal benefits.
  • The Letter also does not discuss that the injured party’s need based benefits may be jeopardized if the injured party moves to another state without taking steps to address the eligibility of the new state’s Medicaid benefits via the use of an SNT within the required time frame to afford such protection.
  • The information in this Letter may come in handy for certain cases where the cost of a SNT is a prohibitive factor that would affect whether a smaller Workers’ Compensation settlement could proceed.
  • The letter does not make it clear how Medi-Cal would view a liability MSA (LMSA), i.e., an MSA allocation report and arrangement for administration pursuant to the settlement of a liability case.
  • As always, you should consult with an attorney licensed in the state where the settlement occurs (as well as disclose to the injured party to consult with an attorney specializing in the protection of need based benefits for the state where the settlement occurs and in any state they plan to move to ahead of their move) to confirm their rights, their entitlement to any specific benefits, and so that they understand that state need based benefit eligibility varies and other states’ laws likely do not afford this same protection.
Count on Medivest to help guide you through some of the complexities associated with Workers’ Compensation and liability settlements that involve some evaluation of Medicare Secondary Payer Act (MSP) compliance, when you are not sure whether a Medicare Set-Aside arrangement should be utilized, or when need based benefits are in the picture or may be in the injured party’s future.
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Medivest
08/Feb/2022
cmswcmsawebinar

CMS Announces Workers’ Compensation Medicare Set-Aside Webinar

On Thursday, February 17 at 1 pm EST, Centers for Medicare & Medicaid Services (CMS) will host a webinar regarding Workers’ Compensation Medicare Set-Aside (WCMSA). The full notice can be read below:

 

CMS will be hosting a webinar to discuss a variety of WCMSA topics, including a summary of what’s new in Medicare set-asides, and addressing questions related to the inclusion of treatments, application of state rules, re-reviews/amended reviews and more. The webinar format will be opening remarks and a presentation by CMS followed by a live question and answer session with representatives from CMS.

Date: Thursday, February 17, 2022
Time: 1:00 PM ET

Webinar URL: https://www.mymeetings.com/nc/join.php?i=PWXW2628369&p=6930242&t=c

and

Conference Dial-In: 800-779-1251
Conference Passcode: 6930242

Please note that for this webinar you will need to access the webinar link and dial in using the information above to access the visual and audio portion of the presentation. Due to the number of participants please dial in at least 15 minutes prior to the start of the presentation.

 

Additional information about recent updates from CMS about WCMSAs can be found here. If you have questions on how topics discussed in this webinar may affect your clients, please contact Medivest here or call us at 877.725.2467.

 

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Medivest
03/Feb/2022
cmswcmsa

Further Review of Section 4.3 of the New WCMSA Reference Guide

1. Section 4.3 of the new WCMSA Reference Guide does not constitute new policy at CMS or new risk for settlement stakeholders. The WCMSA Reference Guide has for a long time maintained the same position on and response to submission and non-submission of MSAs that meet the submission threshold. It is, however, the first time CMS has specifically referenced MSA products branded as “evidence-based” or “non-submit” and given an opinion on those products.

2. CMS is communicating its concern that MSAs specifically designed to forego the submission/approval process may inadequately consider Medicare’s interest. While it is reasonable for CMS to maintain such a concern, the assumption that any MSA not approved by CMS is inadequate is problematic and contradictory to their position on MSAs that do not meet review thresholds. And submission/approval for MSAs that do meet review thresholds is still voluntary.

3. The party with the most to lose is the beneficiary. The primary consequence referenced in 4.3 is denial of payment for the beneficiary’s injury-related care in the event of MSA exhaustion. CMS says it will continue to deny payment until the entire net settlement has been fully spent down (not the total MSA amount). This could occur in events of permanent exhaustion or during temporary exhaustion periods when the beneficiary’s MSA is exhausted until the next funding payment is received. Keep in mind that this doesn’t apply to MSAs that do not meet the review threshold. Also, there is an appeal process for denial of payment. But the greatest risk-bearer is the applicant.

4. Since MSA exhaustion represents the greatest risk to the applicant, a program of proper funds administration is preferable. A burden shift to Medicare can only occur once Medicare becomes the primary payer. A MSA that remains solvent will maintain Medicare’s payment position as secondary indefinitely. While it is impossible to foresee every expense that a MSA may incur over an applicant’s lifetime, a properly funded MSA in the hands of a competent administrator is the best protection of the interests of both Medicare and the applicant.

5. Thoughtful consideration should be given to the adequacy of an evidence-based or non-submit program. It is entirely possible to produce a fully adequate and reasonable MSA without CMS’s review and approval. However, not all products are created equally. It’s important to be confident that the methodology in use produces MSAs that consider Medicare’s interests sufficiently.

6. The best indemnification is a reasonable MSA properly administered. CMS mentions indemnification in their 4.3 language. Many MSA vendors pair specific indemnification language with their non-submit products. The purpose of the indemnification language is to provide stakeholders with a layer of protection for bypassing CMS approval. Those stakeholders will want to pay special attention to any loopholes that condition any protection on the behavior of the beneficiary. Thoughtfully consider indemnification language before going the non-submit route. And as mentioned in #4 above, much of the risk produced by not submitting MSAs to CMS is mitigated by properly written MSAs administered by a competent professional.

Recommendation

Section 4.3 of the latest WCMSA Reference Guide does not produce anything particularly new. Still, it’s important to cover all the bases. For maximum avoidance of risk, submit MSAs to CMS for review that meets the review threshold. If submission is not palatable, it is still possible to write fully adequate MSAs that reasonably consider Medicare’s interests. The important questions to ask are: 1) Does the writing methodology stand on its own apart from CMS submission, rather than taking advantage of the lack of oversight to unreasonably shave costs? 2) If there is indemnification language provided with the non-submit MSA, is it heavily contingent on exceptions that weaken the protection it purports to provide? 3) Understanding that the risk mainly falls in the lap of the beneficiary and is triggered at exhaustion, is a competent administrator with the ability to contain medical costs in the picture to make sure the MSA has the best chance of remaining solvent throughout the applicant’s life?

For a downloadable copy of this piece please click here.

 

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Medivest
18/Jan/2022
cmsmsawcmsa

WCMSA Reference Guide Version 3.5 Updates of Significance

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.5 on January 10, 2022. This Reference Guide replaces Version 3.4 which was released on October 4, 2021.  When comparing the two Reference Guides, a new section 4.3 and new language has been added. Below indicates the new section and language added in the (WCMSA) Reference Guide Version 3.5.

To download the new WCMSA Reference Guide v3.5  Click Here. 

CMS’s Version 3.5 Reference Guide, Section 1.1 includes the following changes:

Clarification has been provided regarding the use of non-CMS-approved products to address future medical care (Section 4.3).   

 

Section 4.3   The Use of Non-CMS-Approved Products to Address Future Medical Care

A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest.  Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.   

 

As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.   

   

Keep in mind the WCMSA Reference Guide states:   

There are no statutory or regulatory provisions requiring that you submit a WCMSA amount proposal to CMS for review. If you choose to use CMS’ WCMSA review process, the Agency requests that you comply with CMS’ established policies and procedures. 

 

Take Aways

  • While CMS added Section 4.3, this language is not entirely new or at least not entirely unexpected.  Similar currently existing Reference Guide language has for years included warnings about what could happen if parties failed to adequately consider Medicare’s future interests in WC settlements.  For example, language from previous Reference Guide versions indicated in Section 8.0 that even for examples where a settlement did not meet CMS workload review thresholds “The settling parties must consider CMS’ future interests even though the case would not be eligible for review.  Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement” (Example 1) and “Not establishing some plan for future care places the settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement”  (Example 2).

 

  • Also in prior versions of the Reference Guide in Section 4.1.4, CMS has warned of its ability and intention to deny injury-related medical services when it said that “If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the entire dollar amount of the entire WC settlement.  Medicare may also assert a recovery claim, if appropriate.”

 

  • On a positive note, CMS has now clarified in the new language in Section 4.3 that it will allow for a procurement cost reduction when there is a denial of service when there was no approved WCMSA submission.  The new language clearly explains that the denial of service amount will not exceed the gross settlement minus procurement costs.  This is more reasonable than denying services up to the entire amount of the settlement as it had previously listed or perhaps denying services up to double the amount of services.  The double damages concept has been sometimes misstated in industry circles.  (In court cases, even double damages claims have first determined the recovery damages by determining the conditional payment amount after applying a procurement cost reduction and then doubling that amount).   The new language actually helps with this issue.

 

  • However, perhaps even more troubling is whether funds earmarked to help protect Medicare’s future interests as WCMSA funds are actually used for the intended purpose.  According to the National Council on Compensation Insurance, Inc. (NCCI) 2018 research brief updating its 2014 survey on WCMSAs, approximately ninety-eight percent (98%) of the Workers’ Compensation cases settled with the injured worker choosing to self-administer their MSA funds.  This 2018 NCCI update published research brief included a sample of over 11,500 WC settlements between 2010 and 2015.

 

  • Perhaps to address this gap between what is said will be done (i.e. WCMSA allocation reports) and what actually is done (the administration of settlement dollars to pay for injury-related medical items, services, and expenses including prescription drug expenses, CMS already has the following language recommending professional administration in its Reference Guide in Section 17:

 “CMS highly recommends professional administration where a claimant is taking controlled substances that CMS determines are “frequently abused drugs” according to CMS’ Part D Drug Utilization Review (DUR) policy. That policy and supporting information are available on the web at https://cms.gov/Medicare/Prescription-Drug- Coverage/PrescriptionDrugCovContra/RxUtilization.html.

Claimants may also administer their own WCMSAs, if State law allows. Claimants should submit annual self-attestations, just as a professional administrator would. This arrangement is subject to the same rules and reporting requirements as any other WCMSA. See Section 17.5 for more on this annual attestation. Although beneficiaries may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

 

  • Perhaps CMS felt that its existing high recommendation language for professional administration was sufficient to encourage settling parties to avoid pitfalls of incompetent administration of WCMSAs.  But has CMS or any other entity ever done research to see what percentage of self-administered MSA funds were properly and fully exhausted before any injury-related medical bills were submitted to Medicare? If a non-submit WCMSA comes in at 80% of the CMS methodology submitted and approved WCMSA (80% because it follows an evidence-based drug tapering program guideline often seen in a state-based Workers’ Compensation medical protocol like the MTUS in California for example) but the WCMSA funds are professionally administered, wouldn’t that seem to protect Medicare’s real-world interests rather than a CMS submitted and approved WCMSA allocation report but self-administered by an injured claimant?

 

Stay Up To Date

Count on Medivest to help you navigate your risk tolerance in light of the new CMS WCMSA Reference Guide language and see if we can’t find the right balance to reasonably protect Medicare’s interests in your settlement. Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions regarding these updates, please reach out to a Medivest representative in your area by clicking here or call us direct at 877.725.2467. 

 

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Medivest
16/Dec/2021
cmsnewsNGHP

NGHP Recovery Thresholds Alert – A CMS Update

On December 15, 2021, CMS issued an alert regarding the Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgments, Awards or Other Payments for 2022.  CMS also issued the methodology for Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements Awards or Other Payments.

 

The CMS alert states, “Beginning January 1, 2022, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals.

This means that entities are not required to report, and CMS will not seek recovery on settlements, as outlined above. Please note that the liability insurance (including self-insurance) threshold does not apply to settlements for alleged ingestion, implantation, or exposure cases.”

 

To view CMS’ Alert for 2022 Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements, Awards or Other payments Click This Link.

 

For the full announcement regarding CMS’ Methodology for Computation of Annual Recovery Thresholds for Certain Liability Insurance, No-Fault Insurance, and Workers’ Compensation Settlements, Judgements, Awards or Other Payment for 2022  Click This Link.

 

Count on Medivest to help guide you through some of the complexities associated with MSP compliance.

 

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Medivest
01/Dec/2021
medicaidscotus

Will the U.S. Supreme Court Mandate Protection of Medicaid Futures?

On Friday, July 2nd, 2021 the U.S. Supreme Court announced it would take up a legal battle that could have a dramatic effect on settlements in the state of Florida, and potentially the entire country. At question in Gallardo v. Marstiller will be whether Florida’s Medicaid program is only entitled to be reimbursed for the money it spent for a Medicaid beneficiary/Member’s past medicals up to the date of a settlement, judgment, award or other arrangement (“settlement”) or whether it is entitled to recover a portion of the settlement that represents future medical expenses too. Gallardo By & Through Vassallo v. Marstiller, 141 S. Ct. 2884 (2021).

A Brief Summary of Events

In 2008, a Lee County school bus struck and seriously injured 13-year-old Gianinna Gallardo. Florida’s Medicaid agency provided $862,688 in medical payments on Gianinna’s behalf. Her parents sued the responsible parties and ultimately agreed to an $800,000 settlement, of which $35,367 was allocated as past medical expenses.

Florida’s Medicaid agency, using the state’s then-current statutory formula to calculate reimbursement, claimed it was entitled to $323,508 of Gianinna’s settlement. However, the state’s statutory formula did not distinguish between past and future medicals and included money in the settlement that was allocated for future medical expenses.

The Gallardo family sued the state Medicaid agency in federal court, arguing that Florida’s reimbursement formula violates federal law because the state should only be able to recover from that portion of her settlement allocated to past medical expenses. The Medicaid agency countered that it was entitled to satisfy its lien from the portion of the settlement representing compensation for both past and future medical expenses.

Between 2017 and 2020 several courts weighed in on similar cases but decisions at odds with each other. In 2017, U.S. District Judge Mark Walker ruled in favor of the Gallardo family. In a 2020 appeal, the 11th Circuit rejected Walker’s decision and ruled that the Florida Agency for Health Care (“AHCA” or “Florida Medicaid”) was entitled to $200,000 of the settlement (Gallardo v. Dudek, 11th Cir., No. 17-13693, June 26, 2020). However, in a separate 2018 case, Giraldo v. Agency for Health Care Admin., 248 So. 3d 53 (Fla. 2018), the Florida Supreme Court said the federal Medicaid Act preempted a state law that authorized Florida Medicaid to seek reimbursement from “portions of (a settlement) that represents future medical funds.” Therefore, that case seemed to indicate that Florida Medicaid was only entitled to recover the portion of money from a settlement that represented past medical expenses

Potential Far-Reaching Effects of a U.S. Supreme Court Medicaid Lien Recovery Decision

All Medicaid agencies have a duty under Federal law to recover past medical payments and most attorneys know to do a lien search when their clients are enrolled in Medicaid.  However, up to now, attorneys never had a legal duty to set aside a portion of settlement proceeds to protect Medicaid’s future interests. The current state of federal law on this topic has been discussed in our prior blog referencing the U.S. Supreme Court’s decisions in Ahlborn and Wos, and their reinstatement via the Budget reconciliation Act of 2018.  Now the U.S. Supreme Court will weigh in this issue – i.e., whether a Medicaid agency like Florida’s is entitled to seek a portion of funds designated for future medical care from a settlement, judgment, award, or other arrangement (each individually now referred to as “settlement”) when it takes up Gallardo v. Marstiller.

How would that be enforced if it is decided that Medicaid’s future interests must be considered at the time of a settlement, judgment, award, or other arrangement? Could this set legal precedent for a nationwide practice of Medicaid beneficiaries setting aside some portion of their settlements to represent Medicaid futures like is done for certain cases involving Medicare beneficiaries or those who have a reasonable expectation of becoming Medicare beneficiaries within 30 months of settlements? Is it possible that a U.S. Supreme Court ruling in favor of Florida Medicaid’s future interests may lead to a federal statute setting forth the protection of Medicaid’s future interests in settlements similar to the way the Medicare Secondary Payer Statute sets the framework for the protection of Medicare’s past and future interests?

The effects could be felt beyond the state of Florida. Perhaps this is the reason that briefs have been filed in this case by or on behalf of the National Conference of State Legislatures, the National League of Cities, the U.S. Conference of Mayors, and the Government Finance Office, the American Justice Association, the Florida Justice Association, the American Academy of Physician Life Care Planners

Additionally, the outcome could increase the awareness of Medicaid lien resolution specifically and lien resolution generally.  Furthermore, if it is determined that Medicaid is entitled to at least some portion of the expected accident-related Medicaid futures, this could affect how Medicare Set-Aside (MSA) allocation reports would be prepared when beneficiaries are dual enrolled, and could increase the need for Professional Administration, due to the complexity of administering funds set aside for protection of both Medicare and Medicaid’s interests.

The Supreme Court’s decision will likely come during the Court’s 2021-2022 term. At that time Medivest will review the decision and provide analysis on what effects it could have on settlement services.

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Sandy Simpson
12/Oct/2021
cmsnewswcmsa

WCMSA Reference Guide Version 3.4 Updates of Significance

 

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.

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Aaron Winnell
17/Aug/2021
Medicare Set-AsideProfessional Administration

Common Pitfalls to Avoid When Pairing a Medical Provider with a Medicare Set-Aside

Medicare Set-Aside (MSA) arrangement beneficiaries have some very specific limitations when it comes to how their money is spent. When it comes to choosing a provider, the options are wide open. A beneficiary will often deal with who they know or a provider that is close to their home. As a cash payer with limited funds to cover all future Medicare allowable and injury related expenses, the wrong choice can put a beneficiary in a world of hurt. Here are some best practices when choosing a provider to treat an injury post settlement and using Medicare Set-Aside funds:

 

Choose a Medicare Certified Provider

While MSA funds can be used to pay any provider that supplies covered care related to the injury, not every provider is able to bill Medicare for these medical goods or services. If a beneficiary properly exhausts their MSA funds in a given year (when the MSA is funded with a structured annuity and receives deposits periodically) or the MSA funds have permanently exhausted, Medicare will assume responsibility to pay Medicare covered expenses related to the injury and coordinate with any other applicable insurance plan. If the provider is not Medicare certified, that provider will not be paid by Medicare even if the beneficiary has maintained Medicare coverage. This can leave the beneficiary as the responsible party if no other insurance benefit is available. We recommend choosing Medicare certified providers to avoid such situations.

 

Choose Providers Who Offer Discounted Cash Rates

A beneficiary with MSA funds is considered a cash payer by medical providers. There is no “in network” policy with set payment rates for cash payers. If the provider is not accustomed to dealing with patients without a primary medical insurance plan, the provider may charge its full retail rate. A beneficiary may have a difficult time negotiating a medical bill on their own or in advance of services being completed and this can add up to a significant expenditure of MSA funds. It is best to ask about cash rates and if any discounts are available when contacting a new provider.

 

Avoid Providers That Don’t Normally Bill Insurance

Billing insurance for medical services means increased access to patients because it agrees to a negotiated contract that reduces the average cost of services. Some providers opt to avoid insurance altogether. This allows these providers to charge higher rates for services because there is no set rate or maximum charge. Moreover, these providers will only take the beneficiary’s cash even if they have a group health plan or public benefit. This lack of flexibility is often costly for the beneficiary.

 

Choose Providers Experienced with Traumatic Injuries

This may seem obvious, but as a professional administrator, Medivest sees beneficiaries choosing providers that are not familiar with treating traumatic injuries post-settlement. This can be problematic from a communication standpoint (while the beneficiary and the administrator know the injury backwards and forwards, the doctor may see very few of these cases) and it can make billing and payment more difficult or present difficulties when seeking a referral to a specialists. The most efficient approach is to choose a provider that KNOWS the beneficiary’s type of injury from direct experience.

 

Choose a Flexible Provider

Here are a few common red flag phrases from providers that limit the beneficiary’s options:

“We only bill Medicare.”

“We don’t deal with liability injuries.”

“We never treat workers’ compensation injuries.”

“We only treat workers’ compensation injuries.”

“We don’t bill third parties.”

“We don’t take cash.”

Providers experienced with multiple scenarios provide the beneficiary with options when it comes to treatment and payment.

 

Beware of Signing Rate Agreements for Specific Services

A beneficiary that is not acquainted with the typical market rate or medical fee schedules is advised to run away from any agreement or contract that would lock them into a guaranteed payment rate. A rate agreement of this nature can put the beneficiary on the hook for significantly inflated cost. If they’re using a professional administrator (and they should be), it can negotiate with the provider directly on the beneficiary’s behalf. Don’t confuse this document with an authorization form to bill insurance or a notification that the beneficiary is responsible for any non-covered services. They’re not the same thing.

 

Avoid buying OTC Supplements or Supplies Directly from a Provider

Over-the-counter supplements or supplies that are sold directly by a provider typically come with a markup and can usually be found cheaper elsewhere. Your providers may recommend a device or a supplement that they conveniently stocks for sale. You should be aware that the providers may be looking to increase their margin per patient. Take your doctor’s advice and do your research.  If the recommended supply of supplement makes sense, shop around for a better price.

 

Do Not Be Discouraged if a Provider Rejects Payment from the MSA

Most providers within the US Healthcare system do not understand what a Medicare Set-Aside is or what it is for. They are frequently hesitant to accept it as a form of payment. They may mistake it for a Medicare Part C plan or out of network benefit. Sometimes, they are highly suspicious and cannot believe that Medicare is not the primary payer. It can be daunting for a beneficiary to be in the position of educating a provider’s billing office. A professional administrator is a great resource for coordinating benefits and having the MSA be the primary payment source, when applicable.

 

Conclusion

A MSA beneficiary with a persistent injury deserves the best care possible, but also needs to be positioned to ensure the MSA funds last. And if they don’t last, that the beneficiary has a proper safety net in place. Part of this strategy includes finding the right providers to not only address the injury with competence but also provide affordable and flexible options to ensure continuity of care and protect the beneficiary from having to dip into other settlement or personal funds.  Even when Medicare is responsible for covering injury care, the beneficiary can be billed for any deductible, copay, or coinsurance balances.

Last, we’d be remiss if we didn’t point out that a professional administrator addresses these challenges every day and not only talks to a beneficiary’s provider on their behalf, but will also coordinate benefits with other insurance, communicate with CMS about the MSA, and negotiate rates in ways a patient will struggle to match. If you or your client is a current or future beneficiary of a Medicare Set-Aside, don’t hesitate to contact Medivest. We help thousands of beneficiaries avoid these and many other MSA pitfalls.

 

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