wcmsa - Solutions for Workers' Compensation and Liability Settlements

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02/Aug/2024

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 4.1 on August 1, 2024. This Reference Guide replaces Version 4.0 which was released on April 1, 2024. There are a few notable changes when comparing the two Reference Guides.

Changes in Version 4.1 of this Guide Include the Following Changes

By CMS’ request, the guide has been updated with details about WCMSA coordination with other health insurers (Section 4.1.3).

To download the new WCMSA Reference Guide v4.1 click here.

This guide reflects information compiled from all WCMSA Regional Office (RO) Memoranda issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules. The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.

For Additional Information

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.

Sandy Simpson

29/May/2024

When resolving a workers’ compensation case, the employer looks to see if the injured employee is a Medicare beneficiary and if there will be injury-related future medical care. If the answer to both questions is yes, then they must comply with the guidelines set forth by the Medicare Secondary Payer (MSP) statute.

With healthcare and Medicare costs on the rise and as the open claim moves through the settlement process, below are some settlement objectives to help keep costs down and stay MSP compliance.

WCMSA Arrangement: Centers for Medicaid and Medicare Services (CMS) recommends this method to ensure that Medicare’s interests are protected when settling a workers’ compensation claim that includes future medical expenses. Note that the WCMSA Arrangements are prepared based on today’s costs.
MSP Compliance: Employers are mandated to follow the MSP statute; it will ensure Medicare compliance when considering Medicare’s interest in the settlement. Failure to do so, you could face legal consequences from breaching the settlement agreement. CMS can also obtain reimbursement of injury related payments made from anyone involved in the settlement, including the worker, workplace, insurance companies and attorneys.
Cost Control: Striving to move an open claim toward settlement in the least expensive manner.
Future Medical Care: Employers can help prioritize the injured employee’s well-being for future medical care after settlement by hiring Medivest for Professional Administration services. Medivest Professional Administration ensures the Medicare Set-Aside (MSA) funds are spent according to the allowable guidelines whereby preserving the MSA dollars.

When to Request a WCMSA?

A WCMSA is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease that would normally be covered by Medicare. All parties involved in a workers’ compensation case have significant responsibilities under the MSP statute to protect Medicare’s interests when resolving cases that include future medical expenses.

Does the settlement contemplate future medical needs?
Is the injured employee eligible or receiving Medicare benefits?
Has the injured employee applied or re-applied for Social Security Disability Insurance (SSDI)?
Is the injured employee 62.5 years old?

Common WCMSA Cost Drivers

When a Medivest WCMSA Arrangement is ordered, a Cost Driver Analysis report will be included. A Cost Driver Analysis report identifies the various costs that are driving up the WCMSA amount, such as opioids, injections, and surgeries. Below are some common WCMSA cost drivers when a report is prepared.

Poly Pharmacy: The use of multiple drugs and lifetime pharmacy costs.
Implantable Devices: Devices such as spinal cord stimulators, intrathecal pain pumps which also includes replacement cost and mediation refills.
Surgeries and Replacement Costs: Non planned surgeries.

WCMSA Cost Mitigation Strategies

When carriers and employers optimize cost mitigation strategies, they can achieve an accurate and timely settlement. The following are examples of helpful strategies.

RX Drug Cost: Reducing prescription drug costs can be used as a pre-MSA strategy by weaning/tapering off some medications, choosing a generic substitution, or using a physician letter (to address changes in medications.
Cost Drivers: Identify treatments or medications that are driving up the total amount of the WCMSA. Review and possibly implement the recommendations provided in the Cost Driver Analyst report to help reduce the WCMSA amount.
Rated Age: If medical records show evidence of a reduced life expectancy, then a Rated Age may be obtained and used when calculating the WCMSA. CMS approves Rated Ages when used in WCMSAs which reduces the life expectancy thus reducing the overall amount of the WCMSA figure.
Structured Settlement: Fund the MSA with a structured settlement instead of a lump sum. CMS approves MSAs to be structured and Medicare will cover expenses for the injured employee during temporary exhaustion if the MSA allocation was approved by CMS. Also, utilizing a structure can provide significant cost savings for the funding party compared to a lump sum payment.

Ready To Order Your WCMSA?

Begin by completing an online referral by clicking here and upload the following documents.

Most recent 2 years of medical records
Most recent 2 years of Rx invoice
Most recent 2 years of indemnity payouts (Work Comp cases only)

About Medivest

Medivest has worked with carriers and employers for over 2 decades to understand their unique needs and responsibilities to their injured workers. Every WCMSA Arrangement is produced by a highly trained nurse that possesses a wealth of knowledge and experience in the preparation of these reports. We understand that creating and maintaining a WCMSA can be complex, let Medivest prepare your next report. Our nurses and staff hold industry certifications or designations including CMSP, CMSP-F, CPC, MSCC, CSSC, JD, RN, and BSN.

Sandy Simpson

02/Apr/2024

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 4.0 on April 1, 2024. This Reference Guide replaces Version 3.9 which was released on May 15, 2023. There are a few notable changes when comparing the two Reference Guides.

Changes in This Version 4.0 of this Guide Include the Following Changes:

Instruction specific to beneficiaries has been added to encourage them to use their Medicare.gov access to the portal for the most efficient method of submitting attestations (Sections 11.1.1 and 17.5). This user-friendly mechanism which allows CMS to gain potentially more MSA spending information than it has received via traditional mailing, may lead to CMS denying more future medical claims or potentially considering whether recovery of future medical payments that slipped through the cracks is viable.
The CDC Life Table link was updated (10.3) – available to view here.

To download the new WCMSA Reference Guide v4.0 click here. This guide reflects information compiled from all WCMSA Regional Office (RO) Memoranda issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules. The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.

For Additional Information

Sandy Simpson

08/Jan/2024

It is getting close to that time of year when mailboxes begin to receive W-2 statements and 1099-INT statements. If an injured individual has either a Self-Administered Medicare Set-Aside (MSA) account or a Professionally-Administered MSA account, the individual will be sent a 1099-INT by January 31^st and a copy will be filed with the IRS. The 1099-INT shows interest earned in the account during the previous tax year.

Liability and Workers Compensations cases should follow the Workers Compensation Medicare Set-Aside (WCMSA)Reference Guide, until CMS publishes a Liability Medicare Set-Aside (LMSA) Reference Guide. Until then, the WCMSA Reference Guide should be considered a single point of reference for Liability and Workers Compensation cases. To download the WCMSA Reference Guide Version 3.8, Dated November 14, 2022, click here.

What the WCMSA Reference Guide states:

MSA funds must be placed in an interest-bearing account that is separate from the individual’s personal savings and checking accounts.
The interest must be deposited into the MSA account to be used for MSA-covered expenses.
You can use the MSA account to pay for the income tax on the interest income.

For further clarification regarding how the individual can pay for the taxes from the interest incomed earned in their account, refer to the CMS Memo Dated July 11, 2005, Subject: Medicare Secondary Payer (MPS) – Workers’ Compensation (WC) Additional Frequency Asked Questions.

“Q6. Treatment of Taxable Interest Income Earned on a WCMSA – If I receive a Form 1099-INT for the interest income earned on my WCMSA account, may I charge the income tax on that amount against the WCMSA?

A6. Assuming that there is adequate documentation for the amount of incremental tax that the claimant must pay for the interest earned on this set-aside account, the claimant or his/her administrator may withdraw an amount equal to the additional tax as a “cost that is directly related to the account” to cover the additional tax liability. Such documentation should be submitted along with the annual accounting.”

How Medivest Handles the 1099-INT:

Medivest will advise the Member to prepare his/her tax return two ways to determine the increased income tax burden, if any:

Include the MSA interest income in the income tax return
Exclude the MSA interest income in the income tax return

In other words, if the Member must pay the IRS an increased income tax amount as a result of the interest earned from their MSA account, the additional income tax burden can be paid from the MSA account. This is considered a cost associated with having the MSA account and CMS allows this expense to be paid from the MSA account. Once a year, Medivest will send CMS an attestation for every applicable professionally-administered MSA account. Any MSA reimbursement of the additional income tax burden will be included in this attestation.

Answers to Common Questions

Question 1. If I am taxed on the earned interest, why can’t I have it?

Answer 1. CMS’ guidelines state that Medicare Set-Aside funds place must be placed into an interest-bearing account and are to be used for covered medical expenses.

Question 2. Why do I have to report the earned interest to the IRS?

Answer 2. Per IRS guidelines, all interest income is taxable, unless specifically excluded.

Question 3. Isn’t my injury settlement tax-exempt?

Answer 3. Any compensation you receive from a settlement because of physical injuries or sickness is not taxable. However, the interest earned after the settlement occurs is taxable.

Best Practices

Medivest’s highly trained representatives 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. For questions about your account or setting up a new professional administration account please contact us here.

Medivest

06/Dec/2023

On December 4th, 2023, Centers for Medicare & Medicaid Services (CMS) shared a new report titled Workers’ Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics 2023. The report provides four fiscal years of data regarding Workers’ Compensation Medicare Set-Aside (WCMSA) Proposed Value and Workers’ Compensation Review Contractor Values (WCRC) from 2020 to 2023.

Takeaways

Total Submissions
Total WCMSA submissions to CMS declined steadily between CMS’ FY 2020 and FY 2022, descending from 16,517 to 13,752, a reduction of almost 17% in three years. FY 2023’s 15,743 submission count represents a reversal of that trend for the time being. This may be the result of the appearance of Section 4.3 in the WCMSA Reference Guide in 2022, in which CMS speaks about “non-submit” or “evidence-based” MSA programs, describing them as “a potential attempt to shift financial burden”.

Proposed vs Recommended
Those who decided to voluntarily submit their proposed WCMSA to CMS for review were rewarded with recommendations that were, all told, 22.95% percent higher than the proposed amount. For comparison, the average percentage difference between the submitter’s proposed MSA and CMS’ recommended MSA for CMS’ FY 2020 through FY 2022 was 13.9%. This is an increase of roughly 65% in CMS’ FY 2023 versus the prior three years’ average. Not only is the counter percentage higher, but the total recommended amount is higher. So, it’s not as if submitters have been lowballing their submissions. For those who embraced a non-submit program for fear of significantly higher MSA counters, CMS dangled no carrots in FY 2023 to encourage a return to voluntary submission.

Proposed MSAs and Total Settlement Amounts
WCMSAs submitted by the industry have, on average, consistently ranged between a proposed amount of $70,439 and $74,847 between CMS’ FY 2020 and FY 2023. Total Settlements utilizing WCMSAs over the same period have averaged between $159,579 and $171,170. Accordingly, WCMSAs constitute around 43% of the total settlement amount in which they are included (pre-CMS recommendation).

Medical vs Rx
Medical expenses with MSAs have increased steadily in recent years and CMS’ FY 2023 is no exception. CMS’ recommended total for the medical portion of submitted WCMSAs is up 13% since 2020. Conversely, Rx expenses have declined by 33%. While several factors are likely to be at play here, CMS’ use of sometimes aggressive NDCs to price drugs may be one culprit. Medivest consistently sees submitted MSAs priced using drug NDCs unavailable in the actual market, and well below market average.

The Big Question

These are statistics from those WCMSA’s submitted for approval, meaning they were written by industry-trained professionals in an attempt to match CMS’ recommended methodology. If the industry is consistent, what has changed at CMS? Also, what does this say about CMS’s position concerning non-submitted WCMSA’s that were written to Evidence-Based Medicine or other non-submit standards in light of the previously modified Section 4.3 of the WCMSA Reference Guide?

For Additional Information

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 directly at 877.725.2467.

Sandy Simpson

31/May/2023

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.9 on May 15, 2023. This Reference Guide replaces Version 3.8 which was released on November 14, 2022. There are a few notable changes when comparing the two Reference Guides.

To download the new WCMSA Reference Guide v3.9 Click Here.

CMS’s Version 3.9 Reference Guide

Section 1.1 includes the following changes:

- All WC letters currently signed with CMS’ Director of Financial Services Group name and signature image have been updated to reflect the current CMS customer service contact information (Appendix 5).
- The CMS Regional Offices are no longer responsible for approving initial determinations. Process language and contact information have been updated throughout the guide (Sections 9.0, 9.4.6, 9.5, and 18.0, and Appendix 5).
- Clarification has been provided regarding intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacement frequency calculation (Section 9.4.5).
- The maximum time limit for eligibility has been removed from the Amended Review process (Section 16.3).
- The 94585 ZIP code has been added to the Walnut Creek Medical Center in the table listing major medical centers (Appendix 7).
- The CDC Life Table link was updated (Section 10.3)

Appendix 5: CMS Customer Service Contact Signature Image Updated to All WC Letters

All WC letters currently signed with CMS’ Director of Financial Services Group name and signature image have been updated to reflect the current CMS customer service contact information (Appendix 5). The following letters have been updated:

Approval Letter
Zero Set-Aside Letter
Below Threshold Letter
Beneficiary Below Threshold Letter
Development Letter
Closeout Letter

CMS Regional Offices No Longer Responsible for Approving Initial Determinations

The CMS Regional Offices are no longer responsible for approving initial determinations. Process language and contact information have been updated throughout the guide (Sections 9.0, 9.4.6, 9.5, and 18.0, and Appendix 5). Clarification has been provided regarding intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacement frequency calculation (Section 9.4.5). The maximum time limit for eligibility has been removed from the Amended Review process (Section 16.3). The 94585 ZIP code has been added to the Walnut Creek Medical Center in the table listing major medical centers (Appendix 7). The CDC Life Table link was updated (Section 10.3).

9.0 Updates: Process Language and Contract Information

WCMSA Submission Process Overview

3.8 version: The WCRC applies the CMS’ criteria in reviewing proposals and forwards the proposals along with a recommendation on the appropriate funding amount to the assigned CMS Regional Office (RO) for a final determination.
3.9 version: The WCRC applies CMS’ criteria in reviewing proposals and making a determination, forwards the final determination on the appropriate funding amount to CMS.

9.5 Updates: Regional Office Receipt to Determinations

3.8 version: Regional Office Receipt

When the WCRC completes its review and recommendation, the case is sent to the RO assigned to the case based on the claimant’s state of residence and CMS’ state and region logic. Although the RO assignment is based on the state of residence of the beneficiary, a case may be transferred from one RO to another based on the case’s legal state of venue, or because the RO that the case was originally assigned to no longer processes WCMSA cases. When the RO receives the case, they review the WCRC recommendation and make a final determination in the case.

3.9 version: Determinations

*The update pertains to cases may not progress to approvals for a number of reasons, basically switches the responsibility from the Regional Office (RO) over to the Workers’ Compensation Review Contractor (WCRC).

New Language Added

- - The WCRC may determine that the case should be closed. This can happen for a number of reasons, included: the parties are not longer settling, the case should be Black Lung instead of WC, the case is Liability rather than WC case, or the submitted has failed to submit necessary information after repeated development requests. The submitted is notified of the case closure for ineligible cases closed for insufficient information.
  - When the WCRC completes its review and recommendation, CMS issues its determination in the form of an Approval letter to the submitter with copies sent to any eligible parties. Then the case is transferred to the Consolidated Regional Office to await receipt of the settlement documents so that the case may move to Final Determination/Case Completion.

9.6 Updates: From Final Determination to Case Completion

3.8 version: Final Determination

If the claimant is living, the case meets workload review threshold, any needed development has been received, and the case is not closed for other reasons, the RO reviews the WCRC’s recommendation and makes a determination as to the final CMS-approved WCMSA amount.

3.9 version: Case Completion

If the claimant is living, the case meets workload review thresholds, any needed development has been received, the case is not closed for other reasons, and the WCRC’s recommendations have been provided, then an approval letter is issued to the submitter with a determination as to the final CMS-approved WCMSA amount.

9.4.5 Clarifications: Medical Review Guidelines

Intrathecal Pumps

3.8 version: 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.
3.9 version: CMS policy assumes that a beneficiary would obtain the prescribed therapy within the first year following settlement if not already placed, or at the next routine interval for replacement. The routine replacement interval for IT pump devices is every seven years from the most recent placement date. If the IT pump is not already placed, one year is removed from the life expectancy before the replacement calculation occurs to account for that initial replacement. To calculate the number of replacements, the claimant’s life expectancy less the number of years from the most recent placement date is divided by seven, decimals are dropped, and the whole number is used for determining replacement over the life expectancy.

Examples:

- - - Beneficiary life expectancy is 21 years and no IT pump is yet placed. Take the 21 years, subtract one year for the initial placement, divide the remainder by seven, and use the whole number with that result.
    - (21-1)/7 = 20/7 = 2.86
    - One initial placement is needed, plus 2 replacements.
    - Beneficiary life expectancy is 12 years and an IT pump was placed three years prior. Take the 12 years, subtract four years for the most recent placement, divide the remainder by seven, and use the whole number with that result.
    - (12-4)/7 = 8/7 = 1.14 One replacement is needed.

Spinal Cord Stimulators

3.8 version: Permanent placements of SCS devices are included every 7 years for non-rechargeable and every 9 years for rechargeable: the claimant’s life expectancy is divided by the frequency of replacement of type, decimals are dropped, and the whole number is used for determining replacement over the life expectancy.
3.9 version: CMS policy assumes that a beneficiary would obtain the prescribed therapy within the first year following settlement if not already placed, or at the next routine interval for replacement. The routine replacement interval for SCS devices is every seven years for non-rechargeable and every nine years for rechargeable from the most recent placement date. If the SCS is not already place, one year is removed from the life expectance before replacement calculation occurs to account for that initial placement. To calculate the number of replacements, the claimant’s life expectancy less the number of years from the most recent placement date is divided by seven (or nice, depending on the unit type), decimals are dropped, and the whole number is used for determining replacement over the life expectancy.

Examples:

- - - Beneficiary life expectancy is 33 years and no SCS is yet placed, but a non-rechargeable unit is appropriate. Take the 33 years, subtract one year for the initial placement, divide the remainder by seven, and use the whole number with that result.
    - (33-1)/7 = 32/7 = 4.57
    - One initial placement is needed, and 4 replacements are needed.
    - Beneficiary life expectancy is 17 years, subtract six years for the most recent placement, divide the remainder by seven, and use the whole number with that result.
    - (17-6)/7 = 11/7 = 1.57
    - One replacement is needed.

Pricing for Peripheral Nerve Stimulator (PNS) Surgery

(PNS) Surgery PNS surgery involves the placement of an electrode(s) in the direct vicinity of a specific peripheral nerve located outside the brain or spinal cord, thereby directly stimulating the painful peripheral nerve. CMS policy assumes that a beneficiary would obtain the prescribed therapy within the first year following settlement if not already placed, or at the next routine interval for replacement. The routine replacement interval for PNS devices is every seven years for non-rechargeable and every nine years for rechargeable from the most recent placement date. If the PNS is not already placed, one year is removed from the life expectancy before replacement calculation occurs to account for that initial placement. To calculate the number of replacements, the claimant’s life expectancy less the number of years from the most recent placement date is divided by seven (or nine, depending on unit type), decimals are dropped, and the whole number is used for determining replacement over the life expectancy. PNS replacement calculations are done the same as for SCS surgeries.

Examples:

- - - Beneficiary life expectancy is 27 years and no PNS is yet placed, but a non-rechargeable unit is appropriate. Take the 21 years, subtract one year for the initial placement, divide the remainder by seven, and use the whole number with that result.
    - (27-1)/7 = 26/7 = 3.71
    - One initial placement is needed, and three replacements are needed.
    - Beneficiary life expectancy is 15 years and a rechargeable PNS was placed two years prior. Take the 15 years, subtract two years for the most recent placement, divide the remainder by seven, and use the whole number with that result. (15-2)/7 = 13/7 = 1.86
    - One replacement is needed.
    - Surgery pricing includes physician fees, facility fees, and anesthesia fees, if applicable.
    - Physician fees: CPT codes are identified and priced based on the appropriate state fee schedule (or usual and customary charges from a state).
      - 64555, Percutaneous implantation of neurostimulator electrode; peripheral nerve
        
        64555, Percutaneous implantation of neurostimulator electrode array; peripheral nerve (excludes sacral nerve)
        
        64590, Insertion or replacement of peripheral or gastric neurostimulator generator
        
        01941, Anesthesia
    - Facility fee: Generally, this procedure is handled in an outpatient setting. The appropriate APC should be included based upon surgery type.
      - 5462, Stimulator Trial
        
        5464, Stimulator Placement
        
        5464, Stimulator Replacement Consider the number of leads to be used.
    - Analysis Services: CPT 96972 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.
      - 95972 – Electronic analysis of implanted neurostimulator pulse generator system (e.g., rate, pulse amplitude, pulse duration, configuration of wave form, battery status, electrode selectability, output modulation, cycling, impedance, and patient compliance measurements); complex spinal cord, or peripheral (i.e., peripheral nerve, sacral nerve, neuromuscular, except cranial nerve) neurostimulator pulse generator/transmitter, with intraoperative or subsequent programming.
    - Anesthesia fee: The anesthesia fee is calculated by multiplying the time-value unit by a base value. The time-value unit is the reasonable time for a procedure. The base value is either established by the fee schedule, or by Medicare and conversion factors.
    - Trials: If an associated trial takes place before the surgery, the trial is assumed to be successful and included with the cost of surgery. PNS is one time after trial, if successful. If a trial fails, a repeat trial is usually not appropriate unless there are extenuating circumstances that led to the trial failure (equipment malfunction, early lead migration, etc.), technological advances, or an alternative neuromodulary technique that may lead to a more successful second trial (see LCD L34328). If submitters give a detailed breakdown of their proposed surgery prices, the reviewer will consider the proposed amounts.

16.3 Updates: Amended Review

3.8 version: CMS has issued a conditional approval/approved amount at least 12 but no more that 72 months prior.
3.9 version: CMS has issued a conditional approval/approved amount at least 12 months prior.

For Additional Information

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.

Sandy Simpson

15/Nov/2022

The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.8 on November 14, 2022. This Reference Guide replaces Version 3.7 which was released on June 6, 2022. There are a few notable changes when comparing the two Reference Guides.

CMS’s Version 3.8 Reference Guide, Section 1.1 includes the following changes:

Changes in This Version of the Guide Version 3.8 of this guide includes the following changes: Clarification has been provided regarding re-review requests when errors exist in the submission documentation, as well as re-review limitations (Sections 16.1 and 16.2). Note: These re-review changes are only available for approvals from September 1, 2022 forward.

To download the new WCMSA Reference Guide v3.8 Click Here.

For your convenience, we have included the entirety of Section 16.1 and 16.2, so you will have the most up to date information regarding the process of re-review:

16.1 Re-Review

When CMS does not believe that a proposed set-aside adequately protects Medicare’s interests, and thus makes a determination of a different amount than originally proposed, there is no formal appeals process. However, there are several other options available. First, the claimant may provide the WCRC with additional documentation in order to justify the original proposal amount. If the additional information does not convince the WCRC to change the originally submitted WCMSA amount and the parties proceed to settle the case despite the lack of change, then Medicare will not recognize the settlement. Medicare will exclude its payments for the medical expenses related to the injury or illness until WC settlement funds expended for services otherwise reimbursable by Medicare use up the entire settlement. Thereafter, when Medicare denies a particular beneficiary’s claim, the beneficiary may appeal that particular claim denial through Medicare’s regular administrative appeals process. Information on applicable appeal rights is provided at the time of each claim denial as part of the explanation of benefits.

A request for re-review may be submitted based one of the following:

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

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.

Submission Error: Where an error exists in the documentation provided for a submission that leads to a change in pricing of no less than $2500.00, a re-review request may be made by submitting updated documents free of errors that caused the original review outcome. Amended documents must come from the originators with appropriate notation to identify that the error was corrected, along with the date of correction and no less than hand-written “wet” signature of the correcting individual. Note: This submission option is only available for approvals from September 1, 2022 forward.

- Examples include, but may not be limited to; medical records with incorrect patient identifying information or rated ages where the rated-age assessor provided incorrect information in the rated-age document.

16.2 Re-Review Limitations

Note: The following re-review limitations are only available for approvals from September 1, 2022 forward.

Re-review shall be limited to no more than one request by type.

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.

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.

Medivest

24/Mar/2022

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.

Craig Pawley, Vice President of Business Development

01/Mar/2022

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. 1. 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 11^th, 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.

Medivest

23/Feb/2022

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 1^st 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.

Older Posts

Changes in Version 4.1 of this Guide Include the Following Changes

For Additional Information

When to Request a WCMSA?

Common WCMSA Cost Drivers

WCMSA Cost Mitigation Strategies

Ready To Order Your WCMSA?

About Medivest

Changes in This Version 4.0 of this Guide Include the Following Changes:

For Additional Information

What the WCMSA Reference Guide states:

MSA funds must be placed in an interest-bearing account that is separate from the individual’s personal savings and checking accounts.

The interest must be deposited into the MSA account to be used for MSA-covered expenses.

You can use the MSA account to pay for the income tax on the interest income.

For further clarification regarding how the individual can pay for the taxes from the interest incomed earned in their account, refer to the CMS Memo Dated July 11, 2005, Subject: Medicare Secondary Payer (MPS) – Workers’ Compensation (WC) Additional Frequency Asked Questions.

“Q6. Treatment of Taxable Interest Income Earned on a WCMSA – If I receive a Form 1099-INT for the interest income earned on my WCMSA account, may I charge the income tax on that amount against the WCMSA?

How Medivest Handles the 1099-INT:

Medivest will advise the Member to prepare his/her tax return two ways to determine the increased income tax burden, if any:

Include the MSA interest income in the income tax return

Exclude the MSA interest income in the income tax return

Answers to Common Questions

Question 1. If I am taxed on the earned interest, why can’t I have it?

Answer 1. CMS’ guidelines state that Medicare Set-Aside funds place must be placed into an interest-bearing account and are to be used for covered medical expenses.

Question 2. Why do I have to report the earned interest to the IRS?

Answer 2. Per IRS guidelines, all interest income is taxable, unless specifically excluded.

Question 3. Isn’t my injury settlement tax-exempt?

Answer 3. Any compensation you receive from a settlement because of physical injuries or sickness is not taxable. However, the interest earned after the settlement occurs is taxable.

Best Practices

Takeaways

The Big Question

For Additional Information

CMS’s Version 3.9 Reference Guide

Appendix 5: CMS Customer Service Contact Signature Image Updated to All WC Letters

CMS Regional Offices No Longer Responsible for Approving Initial Determinations

9.0 Updates: Process Language and Contract Information

WCMSA Submission Process Overview

9.5 Updates: Regional Office Receipt to Determinations

New Language Added

9.6 Updates: From Final Determination to Case Completion

9.4.5 Clarifications: Medical Review Guidelines

Intrathecal Pumps

Examples:

Spinal Cord Stimulators

Examples:

Pricing for Peripheral Nerve Stimulator (PNS) Surgery

Examples:

16.3 Updates: Amended Review

For Additional Information

CMS’s Version 3.8 Reference Guide, Section 1.1 includes the following changes:

To download the new WCMSA Reference Guide v3.8 Click Here.

For your convenience, we have included the entirety of Section 16.1 and 16.2, so you will have the most up to date information regarding the process of re-review:

16.1 Re-Review

A request for re-review may be submitted based one of the following:

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.

Examples include, but may not be limited to; medical records with incorrect patient identifying information or rated ages where the rated-age assessor provided incorrect information in the rated-age document.

16.2 Re-Review Limitations

Note: The following re-review limitations are only available for approvals from September 1, 2022 forward.

Re-review shall be limited to no more than one request by type.

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.

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.

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

9.4.1.1 Most Frequent Reasons for Development Requests – Expanded Explanations

The five most frequent reasons for development requests by the WCRC:

Insufficient or out-of-date medical records. Medical records are required documents for all submissions, including situations where the parties are in dispute.

Documents that are referenced in the file are not provided—this usually occurs with court rulings or settlement documents.

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

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:

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.”

To download the new WCMSA Reference Guide v3.6 click here.