blog - Solutions for Workers' Compensation and Liability Settlements

13/Jan/2026

It is that time of year again 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 that time arrives, the WCMSA Reference Guide should be considered a single point of reference for both Liability and Workers Compensation cases. To download the WCMSA Reference Guide Version 4.4, dated July 14, 2025, 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 individuals can pay their 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.”

MSA Tax Planning

How Medivest Handles the 1099-INT:

Medivest will advise the Member to prepare their 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

14/Jul/2025

On May 12, 2021, the Court of Appeals of Iowa published its opinion number 20-1250 in Forbes v. Benton County Agricultural Society and reminded everyone that in order to avoid surprises that lead to bad settlement results, plaintiffs in liability cases or employers in Workers’ Compensation cases, should always perform a lien investigation into the existence of any lien holders, entities, or plans that could assert a claim for reimbursement of paid claim charges (for this article, all simply referred to as liens). The next steps upon identifying any such liens would be to follow up with the lien holder or recovery agent resolution for an audit of claim relatedness, before moving forward to report settlement details and negotiate a final payment to resolve the lien. While the negotiation of the lien is often finalized after settlement, it could easily be a form of legal malpractice for an attorney to move to settlement without first inquiring as to whether liens exist.

In August of 2017, Larry Forbes sustained an injury while on the premises of the Benton County Iowa fairgrounds, and hired an attorney to file a negligence action. After initial discovery, counsel for the Benton County Agricultural Society (Ag. Society), made an offer to Forbes’s counsel to settle for $10,000.

The letter referenced TRICARE but not Medicare and stated: “Based on information you have provided to date, Mr. Forbes had an excellent recovery, and his actual medical bills totaled $2,732, for which Tricare apparently had a subrogation interest.” Burris added, “There is no indication that Mr. Forbes had to pay anything out-of-pocket, or that the medical providers are actually charging anything beyond the $2,732 paid.”

After negotiating, Forbes agreed to settle his suit with the Ag. Society for $12,500. In return, Forbes would dismiss the suit with prejudice. Counsel for the Ag. Society then informed Forbes’ counsel that if Forbes was Medicare eligible, her client would require “final CMS letter, showing the amount owed, if any, in reimbursement to Medicare.” However, after reaching the agreement, Forbes’ attorney learned that Medicare was pursuing a Medicare lien in the amount of $25,482 for reimbursement of conditional payments it made toward Forbes injury related medical expenses. Forbes’ attorney attempted to renegotiate the settlement once the existing Medicare conditional payments came to light. However, the Ag Society pushed back, insisting Forbes accepted the agreed upon terms of the settlement and was aware of his obligations to Medicare. The Ag Society moved to enforce the settlement by filing a motion for summary judgment.

When the case went to court, Forbes argued the agreement was unenforceable and claimed there was a “mutual mistake” because the parties failed to reach a “meeting of the minds.” The Iowa District Court for Benton County disagreed with Forbes and ruled in favor of the Ag. Society granting it summary judgment, based on its position that the settlement contract was enforceable. The Court of Appeals of Iowa affirmed the District Court’s ruling, reaching its affirmation under the theory that settlement agreements are essentially contracts and because the District Court properly applied contract law. The Court of Appeals confirmed that the lower court record showed a “meeting of the minds,” and that Forbes therefore, bore the risk of the mistake.

The Court of Appeals provided a detailed analysis on how a party may be considered to bear the risk of a mistake, such as when:

“(a) the risk is allocated to him by agreement of the parties, or

(b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or

(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.”

The court decided that Forbes bears the risk of mistake in two of these exceptions:

“The first of those two exceptions is called “conscious ignorance.” See id. cmt. c. Under that exception, even if Forbes did not agree to bear the risk of mistake, he was aware when he agreed to the settlement that he had limited knowledge about potential Medicare payments. And despite that uncertainty, he “undertook to perform” the bargain. See id. In doing so, he assumed the risk of the mistake. See id. We agree with the district court that Forbes had exclusive access to his medical records and the ability to investigate whether Medicare would seek a recovery claim.

On the second exception, even if Forbes were not consciously ignorant about the possibility of a Medicare recovery claim, the district court was still reasonable in assigning the risk of mistake to him. See Pathology Consultants v. Gratton, 343 N.W.2d 428, 438 (Iowa 1984); see Restatement (Second) of Contracts § 154 cmt. a. As the court noted, Forbes’s fall occurred nearly two years before he sued. In that time, he had the opportunity and the burden to inquire thoroughly into the payment of his medical bills. It made sense for the court to allocate the risk of any mistake to Forbes.”

The full opinion and summary of the case can be read here: https://www.iowacourts.gov/courtcases/12533/embed/CourtAppealsOpinion.

Takeaways

Lien Investigation should be addressed during the pendency of any liability claim to determine which health plan paid for the injured party’s injury related treatment and whether they will be asserting any contractual or statutory claim for reimbursement/lien.

Law firms representing injured parties should request and gather all bills for treatment when they also request copies of medical records. They should determine which health plans paid those bills.

They should ask their clients for copies of the front and back of all insurance cards issued to them, including any plans that begin covering the injured party during the representation. This is especially important for those who are eligible/enrolled in any type of government-issued medical insurance plan such as Medicare, Medicaid, VA/TRICARE/CHAMPVA, or who works/worked for a government entity (Such as FELA or FEHBA), or whose health plan is governed by federal law (such as an employer based self-funded ERISA plan). This is because for many of these plans, little or no steps are required by the plan to perfect their lien to be able to make a claim for reimbursement.

Injured parties almost always want “their money” fast. However, patience is a virtue, and often will protect the injured party and their attorney, especially in Lien Resolution and Lien Investigation. For example, response times for Conditional Payment Letters/Medicare liens from CMS can sometimes take up to 45 days if CMS has no prior notice of the claim and settlement. Responses from VA/TRICARE/CHAMPVA often take longer.

Parties should take this into consideration and be proactive and inquire as to liens early in the case, so that if a settlement opportunity arises, they are able to have an accurate picture of all outstanding liens at the right time. Otherwise, they may be settling prematurely and, as Mr. Forbes learned, at their peril. If all liens are correctly identified but some of the payments claimed for reimbursement are not injury related, or if there may be a pending request to reduce the claim beyond the often standard procurement cost reductions allowed under Medicare Lien Resolution for the pro-rata fees and expenses to obtain the settlement, such as under an equitable principle such as the Made Whole Doctrine, an attorney may maintain the entire amount of the requested lien, while disbursing fees, expenses, and the non-disputed portion to the client, so that their client, and their firm will be protected.

Neglecting to address liens early on or certainly close to the time of settlement is taking an unnecessary risk.

Working with an experienced lien resolution group will often produce faster response times and more money into your injured clients’ pockets. Happier clients are more likely to refer your firm more business. Lien Resolution practitioners have familiarity with the various lien processes, have lien holder contacts on file, use electronic portals and secure email systems of recovery agents, often use proprietary diagnosis review software, and should know which remedies may be available when, and how to best help the attorney analyze facts and factors of cases in favor of the injured party when applicable.

Medivest Can Help

Medivest can help you navigate through the complexities of lien resolution while you work toward a desired settlement outcome. Call us to today to speak to one of our highly trained settlement consultants for a free lien case consultation. For more information about Medivest or to refer a case, please call 877.725.2467 | Monday – Friday 8 am to 5 pm EST.

Aaron Winnell

24/Jan/2025

A Medicare Set-Aside (MSA) is a device intended to fund expenses in the future, but it’s a product of the here and now. MSAs are priced based on today’s costs. But inflation assures that tomorrow’s healthcare costs will outstrip today’s healthcare costs. So, it should be no surprise that MSAs are likely to run out of money earlier than projected. That usually means both Medicare and the beneficiary will be stepping in to pay when the money runs out.

Example 1: Lump Sum Funded MSA

Let’s consider a lump sum funded $87,500 MSA for an individual with a life expectancy of 10 years. That’s an average of $8,750 a year in funding to match expenses. The U.S. healthcare inflation rate in December 2024 was 3.1%. Assuming treatment matches the allocation and inflation remains constant, healthcare costs will be a little over 3% higher the next year, and each year following. The table below shows the impact that inflationary healthcare costs have on a Medicare Set-Aside arrangement that, by its standard projection methodology, assumes flat costs across a fixed period.

Lump Sum Funded MSA

Year	Funding	Expenses	Balance	Other Payers
1	$87,500	(8,750)	$78,750	-
2	0	(9,018)	$69,732	-
3	0	(9,294)	$60,439	-
4	0	(9,578)	$50,860	-
5	0	(9,871)	$40,989	-
6	0	(10,173)	$30,816	-
7	0	(10,485)	$20,332	-
8	0	(10,805)	$9,526	(1,279)
9	0	(11,136)	-	(11,136)
10	0	(11,477)	-	(11,477)
TOTAL:	87,500	(100,587)		(23,892)

As we can see, expenses will exceed the available balance by the eighth year and the MSA fund will permanently exhaust. Another payer, preferably Medicare, will become responsible for their share of the beneficiary’s medical expenses and the beneficiary will begin paying Medicare co-pays.

Example 2: Structure-Funded MSA

Let’s take the same MSA from Example 1 and schedule the funding through a structured settlement annuity. The expected average annual expenses and the healthcare inflation rate will be the same.

Structure-Funded MSA

Year	Funding	Expenses	Balance	Other Payers
1	$17,500	(8,750)	$8,750	-
2	$7,778	(9,018)	$7,510	-
3	$7,778	(9,294)	$5,994	-
4	$7,778	(9,578)	$4,194	-
5	$7,778	(9,871)	$2,100	-
6	$7,778	(10,173)	-	(295)
7	$7,778	(10,485)	-	(2,707)
8	$7,778	(10,805)	-	(3,028)
9	$7,778	(11,136)	-	(3,358)
10	$7,778	(11,477)	-	(3,699)
TOTAL:	$87,500	(100,587)	-	(13,087)

We observe two differences in Example 2: First, because the MSA fund is not fully funded up front, the toll of inflationary healthcare costs is felt earlier, but the impact is less severe. Instead of permanent exhaustion in year 8, we begin to see temporary exhaustion in year 6. In each year that follows, the structured annual payments are inadequate to cover the ever-higher healthcare costs. But over the life of the MSA, the total deficit is less than if the MSA was lump sum funded.

Perfect is Probably Not Good Enough

These examples demonstrate how aggressive a self-administering beneficiary will have to be to stretch their MSA funds over the course of their life. Even if their medical providers were to stick to the healthcare regimen contemplated by their MSA (uncommon) and the beneficiary only pays for Medicare allowable, injury-related expenses (thankfully, all beneficiaries are formulary experts) at the fee schedules used to price their MSA (beneficiaries know medical coding and billing, right?), healthcare inflation means they will eventually need Medicare coverage for their injury-related healthcare expenses, and that means Medicare co-pays up to 20%. Snarky parentheses aside, a beneficiary might have to dig into their own pockets for thousands of dollars in copays over their lifetime, even if the MSA administration is perfectly compliant.

Professional Administration Can Be a Hedge Against Healthcare Inflation

Many people think that professional administration is mostly a tool to ensure compliance and protect both Medicare’s interests and the beneficiary’s benefits. But a professional administrator can also obtain considerable savings on healthcare expenses over the life of the MSA. This secondary benefit enhances the first for both Medicare and the beneficiary because if the MSA stays solvent, neither the beneficiary nor Medicare will have to pony up for Medicare allowable, injury-related expenses.

As a professional administrator, Medivest applies a number of strategies to contain the rising costs of healthcare faced by beneficiaries. These include, but are not limited to, pharmacy benefit management relationships, supply and equipment vendor relationships, healthcare networks, negotiation, and system tools that look for excessive rates, inaccurate rates, and double billing. Probably one of the most underappreciated aspects of professional administration is the administrator’s ability to negotiate and obtain payment terms through good communication and establishing rapport with healthcare providers.

Professional administration is more affordable today than it has ever been. And in the face of rising healthcare costs, it may be reasonable to argue that most Medicare set-asides can’t afford to do without it. If you would like to begin the process of setting up a MSA for professional administration or have additional questions about how, in most cases, Medivest is able to stretch the lifespan of a MSA please call us at 877.725.2467 or reach out to us here.

Medivest

14/Sep/2023

On September 13^th 2023, the Centers for Medicare & Medicaid Services (CMS) announced an upcoming increase to the maximum settlement amount for the Fixed Percentage Demand Calculation Option.

When settling a liability or workers’ compensation case, a beneficiary, or their attorney (or other representative) may request that Medicare’s demand amount be calculated using the Fixed Percentage Option. Currently the total settlement amount for the Fixed Percentage Option cannot exceed $5,000. Effective October 2, 2023, the maximum settlement amount will be raised to $10,000.

What is the Fixed Percentage Option?

The Fixed Percentage Option offers a simple, straightforward process to obtain the amount due to Medicare. It eliminates time and resources typically associated with the Medicare Secondary Payer (MSP) recovery process since you will not have to wait for Medicare to determine the conditional payment amount prior to settlement. The Fixed Percentage Option may be elected, if the following eligibility criteria are met:

- - The liability insurance (including self-insurance) settlement, judgment, award or other payment is related to an alleged physical trauma- based incident and;
  - The total settlement is for $5,000 (Note this amount will be raised to $10,000, effective October 2, 2023) or less.
  - You elect the option within the required timeframe and Medicare has not issued a demand letter or other request for reimbursement related to the incident.
  - You have not received and do not expect to receive any other settlements, judgments, awards, or other payments related to the incident.

For More Information

For additional information on the Fixed Percentage Option, please see the Fixed Percentage Option Presentation and the Fixed Percentage Model Language at CMS.Gov and consult the Downloads Section. To learn more about protecting the medical portion of your clients’ workers’ compensation and liability settlements, contact Medivest about Medicare Set-Aside Professional Administration.

Sandy Simpson

25/Jul/2023

On July 19, 2023, the Centers for Medicare & Medicaid Services (CMS) released their list of the Top 10 Section 111 Non-Group Health Plan Reporting Errors between January 1 – June 30, 2023. The chart with the list of errors and their rank can be viewed below. A downloadable PDF of this chart cane be found at the CMS website here.

Medivest will continue to monitor news and updates from CMS, and will keep its readers up to date when important announcements are made. For questions about this chart or any other recent updates, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467.

Natt Reifler, Esq., CMSP, VP of MSP Compliance

21/Jun/2023

Some people may be surprised to learn that an individual does not always need to be a citizen of the United States to qualify for government benefits such as Social Security Income (SSI), Social Security Disability Insurance (SSDI) or Medicare. Provided the individual receives or qualifies to receive SSI or SSDI benefits, and the person otherwise qualifies for Medicare, a non-US citizen (non-citizen) typically qualifies for Medicare Part A without having to pay a premium. They would still need to pay a premium for Medicare Part B. Before addressing how a non-citizen may become eligible to receive Social Security benefits and therefore, be one step closer to qualifying for Medicare, we will first look at the distinctions between SSI and SSDI and how US citizens become eligible for either.

SSDI and SSI Requirements for U.S. Citizens

For U.S. citizens to qualify for SSDI, they must be under 65, have earned enough work credits¹ by working and paying Social Security (FICA) taxes, and have a qualifying disability sufficient to meet the definition designated by the Social Security Administration (SSA). A majority of those who apply for SSDI do not get accepted on the first try. Many injured individuals have found value in retaining attorneys to help with the application (and the commonly required appeals) process.

A major distinction between SSDI and SSI is that SSI does not require any work history or the need for the individual to be disabled, even though disability is one of the ways a person may qualify for SSI. For example, those that are disabled but haven’t accumulated enough work credits to be eligible for SSDI, may qualify for SSI. Furthermore, U.S. citizens who are 65 or older, or who are blind or are disabled, and have limited income and limited resources, and are not confined to an institution, are generally eligible for SSI. Another important distinction between SSDI and SSI is that once a person receives SSDI benefits for two years² , the SSDI recipient will be eligible for Medicare benefits.

Requirements for Non-U.S. Citizens

If a person is a non-citizen and meets the following requirements, they may be eligible for Social Security benefits:

Non-citizens who are legal permanent residents
Active members or veterans of the U.S. military
Foreign workers who have paid FICA taxes for the required time period³
Other non-citizens who are not permanent residents but who can prove that they are here legally (i.e., refugees, those under political asylum, temporary visitors with non-immigrant visas, abuse victims, etc.)

There are many exceptions and rules regarding non-citizens’ status and SSI and SSDI eligibility. Additionally, non-citizens that are allowed to work in the US but not required to pay FICA taxes (and don’t), are not eligible for SSDI.

Aside from standard SSDI eligibility requirements that everyone must meet*, there are two additional requirements that non-citizens must meet in order to qualify for SSDI:

1. If an individual was assigned a Social Security number on or after January 2, 2004, the individual’s number must have been assigned based on their authorization to work in the U.S. or they must have B-1, D-1, or D-2 worker status.
2. Before receiving disability benefits, the individual must show proof that they are in the U.S. legally.

Non-Citizens Returning to their Countries

Once an individual receives either type of Social Security benefits as a non-citizen, if, when and how these benefits will be distributed depends on the country that they are citizens of and how much time they may spend in that country, whether that country is on a restricted list, and whether that country has a bilateral Social Security agreement with the U.S. Some countries that the SSA is restricted from sending Social Security payments to, such as those listed below, are disqualified from accepting Social Security payments.

- Azerbaijan
- Belarus
- Cuba
- Kazakhstan
- Kyrgyzstan
- Moldova
- North Korea
- Tajikstan
- Turkmenistan
- Ukraine
- Uzbekistan
- Vietnam

Ineligible Countries

Legal residents from Cuba, North Korea, and Vietnam may not receive disability benefits, even if they meet the other necessary requirements.

If a citizen of one of the above-listed countries, other than from Cuba, North Korea or Vietnam, goes back to their home country after working and living in the U.S. and otherwise qualifies for a form of Social Security Benefits, the SSA will not send the individual payments and cannot send the payments to someone else on their behalf (unless an exception is granted). The SSA will withhold these payments and will only send them to the individual once they are in a country to which the U.S. may send those payments. Generally, if the SSA is not restricted from sending payments to a particular country, but the country also does not have a bilateral Social Security agreement in place with the U.S., the SSA can send payments to the individual, but will stop the individual’s payments after the person has been outside of the U.S. for six months. If the individual returns to the U.S. and stays for at least a month, they are usually eligible to begin receiving benefits again. The SSA’s website provides information and exceptions concerning these matters including the difference between a person receiving benefits based on their own earnings or residency in the U.S. versus receiving benefits based on the earnings or residency in the U.S. of a dependent or survivor. A pamphlet that provides additional information is available on SSA’s website.

The Medicare Secondary Payer Act (MSP), 42 U.S.C. §1395y(b)(2), enacted in 1980 and aimed at preserving Medicare Trust Funds and reigning in Medicare costs that had up to that point been much larger than projected⁴ , is focused on both the timing of payments and the recovery of Medicare’s conditional payments⁵ for medical expenses⁶ of injured Medicare beneficiaries or injured people who have a reasonable expectation of becoming Medicare beneficiaries within 30 months from settlement, when another (primary) payer is responsible for payment or prompt reimbursement of the injured individual’s injury related Medicare covered medical expenses.⁷ There are several ways people fall into the reasonable expectation of becoming a Medicare beneficiary within 30-month time frame, including reaching 62.5 years of age, applying for SSDI, being denied but considering appeal of SSDI denial, being in the process of appealing the denial, or being diagnosed with end-stage renal disease or ALS, a/k/a Lou Gehrig’s disease.

Contact Us

If you have additional questions regarding government benefits for your clients, please reach out to us here. Additionally, if you are involved in a settlement with a client whose government benefits may be at risk, Medivest would like to provide you with the following data chart. It summarizes a variety of public benefit programs and the best course of action you can take to ensure your clients’ benefits are protected. Click here to download.

The number of work credits needed varies based on the age of the individual at the time they become disabled. Required credits start at 6 credits or 1.5 years of work during the three-year period before the disability started for people disabled in or before the quarter they turn 24 years of age and move up to a requirement for 40 qualifying quarters at or after they turn 62 years of age, with varying requirements in between. [↩]
The two-year requirement does not include the approximate six-month wait time between the date disability is approved and benefits begin. Eligibility begins 30 days after the established onset date (EOD) so along with a mandatory five-month waiting period, it is essentially six months before payments start or 30 months from EOD to Medicare eligibility. [↩]
*According to the SSA website, the required work requirements for non-citizens seem to be different from those of US citizens as well. The requirement for non-citizens does not appear to have a sliding scale for work credits that US citizens are required to have. Here is an example of some non-citizen requirements for SSDI eligibility from SSA’s website: “[t]hey are a Lawfully Admitted for Permanent Residence (LAPR) with 40 qualifying quarters of earnings. Work done in the US by a person’s spouse or parent may also count toward the 40 qualifying quarters of earnings, but only for getting SSI. Quarters of earnings earned after December 31, 1996 are not counted if the individual, spouse, or parent worked or received certain benefits from the U.S. government based on limited income and resources during that period. If a person entered the U.S. for the first time on or after August 22, 1996 they may not be eligible for SSI for the first five years as a LAPR, even if they have 40 qualifying quarters of earnings.” More information regarding this topic is available here. Sometimes depending on the country of citizenship, there may also be other ways for a non-citizen to qualify for SSI including living in the US for required periods of time or having a spouse or parent who has lived long enough in the U.S. (See https://www.ssa.gov/pubs/EN-05-10137.pdf). You are encouraged to consult with an attorney practicing in the SSI and SSDI benefits field to help determine whether any particular person may qualify for Social Security benefits. [↩]
Humana Med. Plan, Inc. v. Western Heritage Ins. Co., 2018 WL 549834 (11^th Cir. Jan. 25, 2018) declining to rehear 2016 11^th Cir. case en banc and citing 5 James B. Wadley, West’s Federal Administrative Practice §6305 2017. [↩]
Or conditional payments by Medicare Advantage Plans that a primary payer should have paid. [↩]
Medical items, services, and expenses, including prescription drug expenses. [↩]
42 U.S.C. § 1395y(b)(2)(A)(ii) prohibits Medicare from making payment to the extent that “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance.” Furthermore, under the Code of Federal Regulations, the Centers for Medicare and Medicaid Services (CMS) has rights to recover any conditional payments Medicare made that a primary payer should have made or reimbursed, specifically, “CMS may initiate recovery as soon as it learns that payment has been made or could be made under workers’ compensation, any liability or no-fault insurance, or an employer group health plan.” 42 C.F.R. § 411.24(b). [↩]

Sandy Simpson

07/Jun/2023

On June 5, 2023 Centers for Medicare & Medicaid Services (CMS) updated the MMSEA Section 111 NGHP User Guide version 7.2. It has been posted to the NGHP User Guide page on CMS.gov. The NGHP User Guide version 7.2 replaces Version 7.1 which was released on April 4, 2023.

To download the updated MMSEA Section 111 NGHP User Guide 7.2 click here.

Who Must Report

An organization that must report under Section 111 is referred to as a responsible reporting entity (RRE). In general terms, NGHP RREs include liability insurers, no-fault insurers, and workers’ compensation plans and insurers. RREs may also be organizations that are self-insured with respect to liability insurance, no-fault insurance, and workers’ compensation.

What’s New – 7.2 Version

New information regarding Mandatory Insurer Reporting for Non-Group Health Plans (NGHPs) and NGHP Town Hall Events is posted here as it becomes available.

MMSEA III – June 6, 2023 – NGHP User Guide 7.2 Version Updates

1. Chapter I: Introduction and Overview
2. Chapter II: Registration Procedures
3. Chapter III: Policy Guidance
4. Chapter IV: Technical Information
5. Chapter V: Appendices
6. 270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting NGHP Entities, Version 5.8

Chapter I: Introduction and Overview – Updates

The updates listed below have been made to the Introduction and Overview Chapter Version 7.2 of the NGHP User Guide. As indicated on prior Section 111 NGHP Town Hall teleconferences, the Centers for Medicare & Medicaid Services (CMS) continue to review reporting requirements and will post any applicable updates in the form of revisions to Alerts and the user guide as necessary. There are no version updates to this chapter.

Chapter II: Registration Procedures – Updates

The update listed below has been made to the Registration Procedures Chapter Version 7.2 of the NGHP User Guide. As indicated on prior Section 111 NGHP Town Hall teleconferences, the Centers for Medicare & Medicaid Services (CMS) continue to review reporting requirements and will post any applicable updates in the form of revisions to Alerts and the user guide as necessary. There are no version updates to this chapter.

Chapter III: Policy Guidance – Updates

The updates listed below have been made to the Policy Guidance Chapter Version 7.2 of the NGHP User Guide. As indicated on prior Section 111 NGHP Town Hall teleconferences, the Centers for Medicare & Medicaid Services (CMS) continue to review reporting requirements and will post any applicable updates in the form of revisions to Alerts and the user guide as necessary. The guidance on determining the ORM termination date based on a physician statement has been clarified (Section 6.3.2). Guidance on what triggers the need to report ORM has been clarified (Sections 6.3 and 6.5.1.1).

Chapter IV: Technical Information – Updates

The updates listed below have been made to the Technical Information Chapter Version 7.2 of the NGHP User Guide. As indicated on prior Section 111 NGHP Town Hall teleconferences, the Centers for Medicare & Medicaid Services (CMS) continue to review reporting requirements and will post any applicable updates in the form of revisions to Alerts and the user guide, as necessary. The NGHP Unsolicited Response File format has been simplified, and filename formats have been added (Section 7.5 and Chapter 10). For liability claims, it is now optional to report ‘NOINJ’ codes in certain circumstances (Section 6.2.5.2).

Chapter 5: Appendices – Updates

The updates listed below have been made to the Appendices Chapter Version 7.2 of the NGHP User Guide. As indicated on prior Section 111 NGHP Town Hall teleconferences, the Centers for Medicare & Medicaid Services (CMS) continue to review reporting requirements and will post any applicable updates in the form of revisions to Alerts and the user guide as necessary. The end-of-line character has been clarified for files using HEW software (Appendix E). The NGHP Unsolicited Response File layout has been simplified (Appendix F).

270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting NGHP Entities, Version 5.8 – Changes for this Release

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

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

22/May/2023

On Tuesday, June 6th, Centers for Medicare & Medicaid Services (CMS) will be hosting a webinar regarding the upcoming implementation of the Section 111 NGHP Unsolicited Response File option. The full notice can be read below:

Section 111 Non-Group Health Plan (NGHP) Unsolicited Response File Webinar Tuesday June 6, 2023

Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation

CMS will be hosting a webinar regarding the upcoming implementation of the Section 111 NGHP Unsolicited Response File option. The format will be opening remarks by CMS, a presentation that will include background as well as how to opt in and what to expect, followed by a question and answer session. For questions regarding this topic, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110- 173SEC111-comments@cms.hhs.gov.

Date: June 6, 2023
Time: 1:00 PM ET

Webinar Link: https://cms.zoomgov.com/j/1601170809?pwd=YU1YN3BGYjhKWTNBR3AyT3o4emFWQT09

Passcode: 558113

Or to connect via phone

Conference Dial In: 1-833-568-8864
Conference Passcode: 160 117 0809

Due to the number of expected participants please log in at least 10 minutes prior to the start of the presentation.

Additional information about recent updates from CMS 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.

Medivest

10/May/2023

On March 24, 2023, Governor Ron DeSantis signed House Bill 837 into law ushering in the most significant tort reform the state of Florida has seen in decades. The new legislation took effect immediately upon signing and will have a huge impact on the judicial system, particularly for personal injury cases against those at fault regardless of whether insured and in lawsuits directly against insurance companies when there are allegations of Bad Faith.

According to Governor Ron DeSantis, “Florida has been considered a judicial hellhole for far too long and we are desperately in need of legal reform that brings us more in line with the rest of the country. I am proud to sign this legislation to protect Floridians, safeguard our economy and attract more investment in our state.”

A Brief Summary

To read the new law in full detail click here. Some of the major highlights of the HB 837 that will have the most impact are as follows:

Modified Comparative Negligence Framework

Florida has in the past been a pure Comparative Negligence state so even if an injured party were more than 50% at fault for their injuries, they could make a claim for damages for the percentage of fault caused by a third party. Plaintiffs will now be barred from recovery if they are more than 50% at fault for their injuries. This change does not apply to actions based on medical negligence.

Two Year Negligence Statute of Limitations

The Statute of Limitations in negligence actions will cut the current statute in half. Claimants will now have two years from the time the cause of action accrues to file suit.

Limiting Bad Faith Lawsuits Against Insurers

The new law states mere negligence alone is insufficient to constitute bad faith in both statutory and common-law actions against an insurer. It also mandates the claimant and the claimant’s attorney to act in good faith when furnishing information regarding the claim, issuing demands, setting deadlines, and attempting to settle.

Attorney-Client Privilege for Treating Physicians

The referral and financial relationships between the plaintiff’s personal injury firms and the treating physicians will no longer be protected under attorney-client privilege.

Standards of Admissibility of Medical Evidence

HB 837 changes what constitutes admissible evidence in establishing past, present and future medical expenses. Going forward, the admissibility of evidence at trial of past medical treatment is limited to the amount actually paid to medical providers regardless of the source of payment (health insurance provider, workers’ compensation insurance carrier, etc.). Additionally, evidence offered to prove the amount necessary to satisfy unpaid charges will be limited to how much the claimant is obligated to pay if the claimant has health care coverage other than Medicare or Medicaid.

Regarding Attorney Fees

HB 837 eliminates multipliers for attorney fees with a presumption that the newly enacted Lodestar method is sufficient and reasonable. Additionally, many of the statutes that provide for one-way attorney’s fees in actions involving insurers have been repealed.

Presumption Against Liability of Property Owners

A new section of the Florida Statutes has been created with a presumption against liability for owners and operators of multifamily residential property in cases based on criminal acts upon the premises by third parties.

Questions About Your Liability Case?

Medivest offers a full suite of settlement solutions that address MSP exposure and protect Medicare’s interests in a liability settlement. For a free case consultation, click here and one of our settlement consultants will assist you.

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270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting NGHP Entities, Version 5.8 – Changes for this Release

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

On Tuesday, June 6th, Centers for Medicare & Medicaid Services (CMS) will be hosting a webinar regarding the upcoming implementation of the Section 111 NGHP Unsolicited Response File option. The full notice can be read below:

Section 111 Non-Group Health Plan (NGHP) Unsolicited Response File Webinar Tuesday June 6, 2023

Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation

A Brief Summary

Modified Comparative Negligence Framework

Two Year Negligence Statute of Limitations

Limiting Bad Faith Lawsuits Against Insurers

Attorney-Client Privilege for Treating Physicians

Standards of Admissibility of Medical Evidence

Regarding Attorney Fees

Presumption Against Liability of Property Owners

Questions About Your Liability Case?

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