cms - Solutions for Workers' Compensation and Liability Settlements

29/Jan/2025

When Medicare’s interests (past and/or future) are not considered, are you aware of the unintended consequences which may affect the parties to the settlement? The Centers for Medicare and Medicaid Services (CMS) WCMSA Reference Guide v 4.2, found here, provides language regarding their views and remedies. Understanding CMS’ views and consequences is a good step in helping a party navigate the often-confusing settlement process as it relates to staying compliant with the Medicare Secondary Payer (MSP) statute.

Conditional Payment Recovery

Medicare has a right to seek reimbursement for the conditional payments it makes to providers where another payer may be responsible. The payment by Medicare is conditioned on Medicare taking on recovery at the appropriate time and therefore, is termed to be a “conditional payment” because it must be repaid to Medicare once the settlement occurs. However, when the conditional payments have not been repaid, Medicare may take the following actions:

Priority Right of Recovery or “Super Lien” – Medicare has a Priority Right of Recovery or “Super Lien” without the need to file any notice in a court. CMS states, “If Medicare’s interest is not considered, CMS has a priority right of recovery against any entity that received any portion of a third-party payment directly or indirectly – a right to recover or take back, that payment.”

Subrogation Rights – CMS states, “Medicare has a subrogation right to any such payment it has made. Subrogation means the substitution of one person or entity for another. If Medicare exercises its subrogation rights, Medicare becomes a claimant against the responsible party and/or the liability insurer/medical provider to the extent that Medicare has made payments to or on behalf of the beneficiary for services related to claims against the responsible party and the responsible party’s liability insurance. While Medicare can pursue recovery directly from the responsible party through their “pay and chase” method, utilizing subrogation is usually less common.”

Charging Interest – Additionally, Medicare may and does regularly charge interest on this type of MSP conditional payment debt when a demand has remained unpaid for 60 days. The interest rate is currently over 12%. This can be a factor in how the entities and claimants choose to address any appeals or request to waive the MSP debt. After 120 days from the debt of the demand, the MSP debt may be transferred to the Department of Treasure (DOT) for various DOT collections actions. The most common remedies exercised when the debt is referred to the DOT is the Treasury Off-Set Program or Private Collection Action (PCA).

Referral to the Treasury Department – CMS states, “When the outstanding debt has moved through Medicare’s recovery process, and it is still unpaid, the debt is referred to the Treasury Offset Program (TOP) for further collection activities. The TOP may garnish the beneficiary’s Social Security benefits or seize the primary plan’s federal tax refund.”

Referral to the Department of Justice – CMS states, “The Centers for Medicare and Medicaid Services (CMS) may refer the debt to the Department of Justice (DOJ) for legal action if it determines that the required payment or a properly documented defense has not been provided. The law authorizes the Federal government to collect double damages from any party that is responsible for resolving the matter, but which fails to do so.”

CMS’s Views – NSMSA / EBMSA / WCMSA

CMS has stated that there are no statutory or regulatory provisions requirements to submit a WCMSA amount proposal to CMS for review. As a result, there has been an increase in defendants using Non-Submit Products – MSAs (NSMSA) or Evidence-Based MSAs (EBMSA) instead of having the traditional WCMSA Arrangement prepared and submitted to CMS for review. While there are some similarities in these reports in respect that they each attempt to estimate the future Medicare covered medicals which are likely to be encountered by the injured party after settlement, there are substantial differences in the projection methodology that could open settling parties up to risks.

Non-Submit Medicare Set-Aside (NSMSA) Report – The NSMSA report meets workload review thresholds but is a report (by definition) is not submitted to CMS for review and approval. The defendant may decide to use a non-submit MSA allocation report to speed up the settlement process and because it often projects a lower amount of money for the claimant’s future injury-related Medicare covered medicals (FIRMCM) than a traditional WCMSA written by the WCMSA Reference Guide standards.

Evidence-Based Medicare Set-Aside (EBMSA) Report – The EBMSA report is based on the injured party’s medical records and research trends. When an EBMSA report is used, the parties do not intend to submit the EBMSA to CMS for review and approval. The report’s projection would be guided by evidence-based medicine standards with the treating physician’s recommendations. It uses established evidence-based standards of care to create a medically and legally defensible assessment of the injured party’s future medical needs.

WCMSA Arrangement – The WCMSA report follows CMS’ guidelines when preparing reports and submitting to CMS for review. As part of CMS’ guidelines, they required the report to use average wholesale prices (AWP) to price Medicare Part D drugs, confirm jurisdiction to apply correct fee schedules for treatments, and to use ICD-10 mandatory diagnosis and procedure codes. When reviewing the WCMSA, CMS assesses whether the proposed amount of funds set aside for future medical expenses aligns with Medicare’s standard of care protocols, essentially checking if the proposed treatment plan and cost are considered reasonable and appropriate based on Medicare guidelines for similar conditions.

CMS’ Views – Traditional WCMSAs Arrangements

Below are some of CMS’ views found in section 3.0 of the WCMSA Reference Guide:

“Medicare may also refuse to pay for future medical expenses related to the WC injury until the entire settlement is exhausted.”
“The WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities a finality, with respect to obligation for medical care required after a settlement, judgement, award, or other payment occurs.”
“Once the CMS-approved set-aside amount is exhausted and accurately accounted for to CMS, Medicare will pay primary for future Medicare-covered expenses related to the WC injury that exceed the approved set-aside amount.”

Changes to WCMSA Ref Guide -Section 4.3 – Non-Submit MSA Products

The Medivest blog written on February 3, 2022, titled The Further Review of Section 4.3 of the New WCMSA Reference Guide found here, which outlines the consequences when using the Non-Submit MSA’s products. Below are some of the primary takeaways from that blog:

The party with the most to lose is the beneficiary. The primary consequence referenced in 4.3 is denial of payment for the beneficiary’s injury-related care in the event of MSA exhaustion. CMS says it will continue to deny payment until the entire net settlement has been fully spent down (not the total MSA amount). This could occur in events of permanent exhaustion or during temporary exhaustion periods, when the beneficiary’s MSA is exhausted until the next funding payment is received. Keep in mind that this doesn’t apply to MSAs that do not meet the review threshold. Also, there is an appeal process for denial of payment. But the greatest risk-bearer is the applicant.
Since MSA exhaustion represents the greatest risk to the applicant, a program of proper funds administration is preferable. A burden shift to Medicare can only occur once Medicare becomes the primary payer. An MSA that remains solvent will maintain Medicare’s payment position as secondary indefinitely. While it is impossible to foresee every expense that an MSA may incur over an applicant’s lifetime, a properly funded MSA in the hands of a competent administrator is the best protection of the interests of both Medicare and the applicant.
Thoughtful consideration should be given to the adequacy of an evidence-based or non-submit program. It is entirely possible to produce a fully adequate and reasonable MSA without CMS’s review and approval. However, not all products are created equally. It’s important to be confident that the methodology in use produces MSAs that consider Medicare’s interests sufficiently.

Mismanagement of WCMSA Accounts

An injured party may choose to self-administer their WCMSA funds or have it professionally administered. However, in either case when the funds have not been properly managed and have been misspent, the consequences could be:

If the WCMSA account is not set up, the beneficiary’s Medicare eligibility could be in jeopardy at least to the extent of the injury related FIRMCM claims.
Funds may need to be added to the WCMSA before Medicare pays for FIRMCM.
Medicare can deny payment of future injury-related medicals if the WCMSA funds are not properly used or exhausted.
If the carrier fails to report ORM and/or TPOC/Settlements timely, the carrier may be fined for Civil Monetary Penalties starting in April of 2025 as described in a previous blog. If attestations are not timely delivered to CMS for WCMSA’s, Medicare may deny injury-related treatment until reporting is corrected.

Need for Professional Administration

The mismanagement of funds can negatively affect the beneficiary’s Medicare benefits and delay treatment. That’s why hiring a Professional Administrator can help remove the burden from the injured party/beneficiaries from paying claims, managing funds, and providing attestation report to CMS. Keep in mind CMS states, “Although beneficiaries may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

How to Avoid Medicare’s Consequences

Call Medivest 877.725.2467 to speak with one of our case consultants who will help you navigate a plan that evaluates Medicare’s past and future interests in a settlement or hopeful settlement.
Medivest investigates and assists with the resolution of Medicare’s conditional payments in WC claims on behalf of an employer/carrier/TPA and can act as the eyes of the claimant to make sure that the carrier is paying its share of accepted injury related conditional payments.
Medivest investigates and assists with the resolution of Medicare’s conditional payments, or those of Medicare Advantage Plans (Part C), Prescription Drug Plans (Part D), Department of Veterans Affairs (VA), TRICARE, ERISA, and privately administered insurance plans for liability cases when referred to by the plaintiff’s attorney.
Medivest prepares WCMSA, LMSA and Medical Cost Projection (MCP) reports
Medivest submits WCMSA allocation reports to CMS for review when allowed and desired.
Medivest professionally administers MSA Funds for WC and Liability MSAs. Hire Medivest for Professional Administration to manage the MSA funds.

About Medivest

Founded in 1996, Medivest is a national Medicare Secondary Payer (MSP) compliance company and provider of settlement solutions. Our focus is assisting anyone settling a workers’ compensation or personal injury claim to understand their obligation to consider Medicare’s interests under federal law. Medivest provides pre- and post-settlement solutions that help mitigate exposure from that obligation. Contact us today at 877-725-2467 or at medivest.com/contact-us.

Medivest

22/Jan/2025

On January 17, 2025, CMS updated its Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide to reflect a new policy in Section 4.2 to no longer review zero-dollar WCMSAs as of July 2025. Other announced changes in the WCMS Reference Guide, now in version 4.2, include an update of WCRC Review Considerations in Section 9.4.3 and corrected example calculations for Intrathecal Pump, Spinal Cord Stimulator, and Peripheral Nerve stimulator replacements were made in Section 9.4.5.

On January 21, 2025, CMS indicated via email and its website that it will be implementing two operational changes to the WCMSA review process in the first half of 2025 as follows:

“Amended Reviews: Currently, amended review requests cannot be submitted until 1 year after a WCMSA case has been approved. Effective April 7, 2025, amended review requests will be allowed at any time after a WCMSA case is approved.

Zero-Dollar Set-Asides: Effective July 17, 2025, CMS will no longer accept or review WCMSA proposals with a zero-dollar ($0) allocation. Entities should still consider the parameters available in the WCMSA Reference Guide (PDF) to determine whether a zero-dollar WCMSA allocation is appropriate and should maintain documentation to support that allocation.”

As a refresher, the WCMSA Reference Guide, in Section 4.2, which describes when a zero-dollar MSA is appropriate, used to list three conditions to determine when Medicare’s future interests in a Workers’ Compensation settlement had been protected. The Reference Guide’s updated Section 4.2 has been revised significantly, and now includes only two conditions to indicate when Medicare’s future interests are protected in a WC settlement with several examples of when the second condition is met as listed in the text below:

“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 they are true, they indicate that Medicare’s interests are already protected:

a) 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); and

b) 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.

These conditions may be demonstrated through one of the following:

• The individual’s treating physician documents in medical records that to a reasonable degree of medical certainty the individual will no longer require any treatments or medications related to the settling WC injury or illness; or

• The workers’ compensation insurer or self-insured employer denied responsibility for benefits under the state workers’ compensation law and the insurer or self-insured employer has made no payments for medical treatment or indemnity (except for investigational purposes) prior to settlement, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future or past medical or pharmacy services as a condition of settlement; or

• A Court/Commission/Board of competent jurisdiction has determined, by a ruling on the merits, that the workers’ compensation insurer or self-insured employer does not owe any additional medical or indemnity benefits, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services; or

• The workers’ compensation claim was denied by the insurer/self-insured employer within the state statutory timeframe allowed to pay without prejudice (if allowed in that state) during investigation period, benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services.

In addition, if a settlement leaves WC carriers with responsibility for ongoing medical and prescription coverage once the settlement funds are fully spent, then a WCMSA is not necessary.

Effective July 17, 2025, CMS will no longer accept or review WCMSA proposals with a zero- dollar ($0) allocation. Entities should consider the above parameters in determining whether a zero-dollar WCMSA allocation is appropriate and maintain documentation to support that allocation.

Notes:

… If Medicare made any conditional payments for WC injury-related services furnished prior to settlement, then Medicare will recover those payments. In addition, Medicare will not pay for any WC injury-related services furnished prior to the date of the settlement for which it has not already paid.

CMS will not issue “verification letters” stating that a WCMSA is not necessary.

In instances where the above conditions are not met, CMS’ voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS’ approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment.”

The second to last paragraph of Section 9.4.3 was substituted from:

“The WCRC relies on evidence-based guidelines for prescription medication and medical treatment allocations; however, these are guidelines, not rules. The final determination is also based on the claimant’s past use and future recommended treatment as supported by the medical records and by current peer-reviewed medical literature. See Appendix 4 for a list of resources the WCRC uses.”

to the following:

“The WCRC final determination relies on the claimant’s past use and future recommended treatment as supported by the medical records. Evidence-based guidelines for prescription medication and medical treatment allocations and current peer-reviewed medical literature are also reviewed; however, these are guidelines, not rules. See Appendix 4 for a list of resources the WCRC uses. Treating provider plans are given preference where the two are at odds.”

The corrected example calculations in 9.4.5 for intrathecal (IT) pump pricing should be reviewed by allocators and their price coders to make sure that WCMSA pricing for IT pumps is consistent with the corrected calculations in the updated Reference Guide.

Take Aways:

• The new “no review” policy for zero-dollar MSA’s seems driven in large part to spirited feedback provided to CMS from the WCMSA community. There were several CMS panel discussions with MSP Network membership at the September 2024 MSP Network educational conference in Baltimore during which many of the concerns now addressed in updated Section 4.2 of the Reference Guide concerning WC cases with no payments toward denied body parts (other than during investigation periods), determinations made by WC judges/commissions at the state level, and statutory limits on payment of future medicals by WC carriers were brought up and debated.

• The drop of the one year waiting period before submitting Amended Reviews is another step toward more fair reviews by CMS and also seems to be a result of strong advocacy by those who submit allocation reports, the attorneys, who represent those entities, and the MSP Network stakeholder community at large.

• This is encouraging as it shows that CMS does listen to feedback from the MSP stakeholder community.

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.

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Sandy Simpson

07/Jan/2025

On January 6, 2025, the Centers for Medicare & Medicaid Services (CMS) updated the MMSEA Section 111 NGHP User Guide to version 7.9. The newer version has been posted to the NGHP User Guide page, found here. The NGHP User Guide to version 7.9 replaces Version 7.8 which was released on December 6, 2024.

MMSEA III – January 6, 2025 – NGHP User Guide version 7.9 Downloads

Chapter 1: Introduction and Overview

The updates listed below have been made to the Introduction and Overview Chapter Version 7.9 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 changes for this version.

Chapter II: Registration Procedures

The update listed below has been made to the Registration Procedures Chapter Version 7.9 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 changes for this version.

Chapter III: Policy Guidance

The updates listed below have been made to the Policy Guidance Chapter Version 7.9 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. As of January 1, 2025, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals (Section 6.4).

Chapter IV: Technical Information

The updates listed below have been made to the Technical Information Chapter Version 7.9 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. As of January 1, 2025, the threshold for physical trauma-based liability insurance settlements will remain at $750. CMS will maintain the $750 threshold for no-fault insurance and workers’ compensation settlements, where the no-fault insurer or workers’ compensation entity does not otherwise have ongoing responsibility for medicals (Section 6.4).

Chapter V: Appendices

The updates listed below have been made to the Appendices Chapter Version 7.9 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 changes for this version.

270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting Non-GHP Entities Version 6.0

The email address for contacting an Electronic Data Interchange (EDI) Representative has changed to COBVA@bcrcgdit.com. However, COBVA emails coming from CMS now show the address as COBVA@mail.cms.hhs.gov (Customer Support).

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.

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Sandy Simpson

07/Jan/2025

The Centers for Medicare & Medicaid Services (CMS) presentation originally held on October 17, 2024, regarding Medicare Secondary Payer and Certain Civil Money Penalties for Non-Group Health Plan has been updated to include Q&A from the webinar. The updated presentation can be found here. The updated presentation is also available in the Download section of the Mandatory Insurer Reporting for Non-Group Health Plans What’s New page on CMS.gov.

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 regarding the information presented in this webinar or any other recent CMS updates, please reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467.

Medivest

17/Dec/2024

On December 16th, Centers for Medicare & Medicaid Services (CMS) announced that 2025 recovery thresholds for physical trauma liability, no-fault and Workers’ Compensation settlements, judgments, awards or other payments by CMS (Settlements) will remain at $750. The full announcement can be read here.

This threshold does not apply to ingestion, implantation or exposure Settlements. The $750 threshold will continue to apply to Workers’ Compensation and no-fault insurance settlements as long as the entities do not have ongoing responsibility for medicals. As usual, there is no Section 111 reporting requirement for Settlements under $750, and CMS will not seek recovery for conditional payments/Medicare liens arising from below threshold Settlements.

Additional information regarding the methodology used to determine the threshold has been provided here.

For Additional Information

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.

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Sandy Simpson

11/Dec/2024

On December 6, 2024, the Centers for Medicare & Medicaid Services (CMS) updated the MMSEA Section 111 NGHP User Guide to version 7.8. It has been posted to the NGHP User Guide page, found here. The NGHP User Guide to version 7.8 replaces Version 7.7 which was released on October 7, 2024.

MMSEA III – December 6, 2024 – NGHP User Guide Downloads 7.8

Chapter 1: Introduction and Overview

The updates listed below have been made to the Introduction and Overview Chapter Version 7.8 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 changes for this version.

Chapter II: Registration Procedures

The update listed below has been made to the Registration Procedures Chapter Version 7.8 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 changes for this version.

Chapter III: Policy Guidance

The updates listed below have been made to the Policy Guidance Chapter Version 7.8 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. A new section has been added that discusses Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs), within the workers’ compensation TPOCs section (Section 6.4.4).

Chapter IV: Technical Information

The updates listed below have been made to the Technical Information Chapter Version 7.8 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. A new section has been added that discusses Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs), within the workers’ compensation TPOCs section (Section 6.4.4.1).

Chapter V: Appendices

The updates listed below have been made to the Appendices Chapter Version 7.8 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 changes for this version.

270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting Non-GHP Entities Version 6.0

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.

Medivest

05/Dec/2024

On November 26th, 2024, the Centers for Medicare & Medicaid Services (CMS) shared a new report titled Workers’ Compensation Medicare Set-Aside (WCMSA) Fiscal Year Statistics 2024. The report provides five fiscal years of data regarding Workers’ Compensation Medicare Set-Aside (WCMSA) Proposed Value and Workers’ Compensation Review Contractor Values (WCRC) from 2020 to 2024.

Analysis

There was a 5.6% decrease in the number of WCMSA allocation reports that were submitted to CMS for review from 15,743 in Fiscal Year (FY) 2023 to 14,862 in FY 2024. There was also a drop in average settlement value of 4.7% from an average of $159,976.93 in FY 2023 to only $152,487.15 in FY 2024.

Despite this drop in settlement values, the WCMSA proposals for allocation reports submitted to CMS remained relatively flat, only dropping less than 2/10ths of one percent from $70,887.33 in FY 2023 to $70,775.58 in FY 2024. Counterhighers from CMS, correspondingly remained relatively flat moving from its published increase between the submitted versus recommended amount of 22% in FY 2023 to an increase of 21% in FY 2024.

The biggest change in the WCMSA CMS review statistics in recent years is that in 2022, when Section 4.3 was first added to the Reference Guide, the average counterhigher jumped from a 13-15% increase for FY 2020-2022 to what may be a “new era” for the last two years being between a 21-22% increase. Taking the average of 14% from FY 2020 – FY 2022 to the average of a 21.5% counterhigher increase for FY 2023 – FY 2024, this amounts to 31% increase in the counterhigher percentages!

Proposed MSAs and Total Settlement Amounts

Pre-CMS review WCMSAs constituted around 46% of the total settlement amount in FY 2024 up from 44% in FY 2023.

Medical vs Rx

Medical items and services represented approximately 79.3 % of the approved MSA amounts, whereas Rx represented 20.7% of the approved WCMSA amounts in FY 2024. The medical portion was 76.9% in FY 2023 with Rx accounting for 23.04% of the MSA in FY 2023. In FY 2020 by contrast, the medical portion was 68.6% and Rx expenses represented 31.4% of approved WCMSA amounts. Rx expenses have declined by 34% since FY 2020 as a percentage of the WCMSA . 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.

Take Aways

While reviews by CMS could in theory include acceptances or even reductions in the amount proposed by submitters as counterlowers, those who submit WCMSA’s have come to know that CMS reviews of WCMSA’s most often come back in the form of a counterhigher. It is important to distinguish a counterhigher from the term counter offer used in contract negotiations. While the WCMSA submission process is entirely voluntary, CMS’s Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (WCMSA Reference Guide) language and CMS operations consider the CMS review/approval response to be CMS’ final position on the acceptable amount to be set aside to protect Medicare’s future interests in the settlement, unless there is a successful Re-Review (allowed only for instances where there is a math error or the discovery of a document in existence prior to the time of submission but not included in the submission which is then allowed to be provided for the once only Re-Review opportunity). As a result, many in the industry say CMS uses the counterhigher to “voluntell” the parties the amount required to be set aside from their settlement for their WCMSA amount and that if an alternate amount is set aside or no amount is set aside, injury related medicals otherwise covered by Medicare could be denied by Medicare up to the settlement amount minus procurement costs instead of up to the CMS approval amount.

As background, 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 seemed to have been a reversal of that trend until the 14,862 number for FY 2024 was reported. This seems to be the market shaking out the initial scare from Section 4.3. in which CMS had for the first time discussed “non-submit” or “evidence-based” MSA allocation reports as potential attempts to shift the burden of payment for injury related Medicare covered medicals to Medicare.

Proposed vs Recommended

While one can understand that CMS wants to protect the Medicare Trust Funds for both Medicare Part A and Part B, it does not seem to be productive for CMS to unfairly punish those who decide to voluntarily submit MSA’s in accordance with CMS WCMSA Reference Guide methodology. The statistics described above show that while the settlements have come down recently, the amount of the submitted WCMSA’s have not, so it’s not as if submitters have been lowballing their submissions. Those carriers who embraced a non-submit program in recent years to avoid higher WCMSA amounts associated with large counterhighers from CMS, may have not yet seen enough consequences to encourage a large return to voluntary submission practices.

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 for those who submit have been consistent, but there has still been an increase in the counterhigher percentages, what has changed at CMS? While the fear in the stakeholder industry used to be focused on financial recovery by CMS under the Medicare Secondary Payer Act (MSP), could it be that CMS’s position concerning non-submitted WCMSA’s is evolving in the form of future Medicare denials for injured claimants who will be left to their own devices to attempt administrative appeals over those denials? The discussions of Section 4.3 of the WCMSA Reference Guide may have just the start of the new era, while CMS continues to build out its computer system in the background. Now, we are aware that there are new Section 111 Reporting requirements include the reporting of WCMSA amounts for all TPOC settlements involving current Medicare beneficiaries whether the WCMSA was submitted to CMS for review or not. Furthermore, the new Civil Monetary Penalty enforcement for untimely Section 111 reporting of ORM and TPOC applicable as of October of this year to be audited in October of 2025 seem to be clear additional steps of the new era, with additional data for CMS to continue to expand Medicare medical and Rx denials in the future. Routine reviews of business practices are prudent in any industry and as we head into another fiscal year, it is a great time to review your business practices to confirm your firm or company is taking the steps to help ensure best in class compliance standards that align with your clients’ interests and risk tolerances.

For Additional Information

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Sandy Simpson

07/Oct/2024

On October 7, 2024, the Centers for Medicare & Medicaid Services (CMS) updated the MMSEA Section 111 NGHP User Guide to version 7.7. It has been posted to the NGHP User Guide page, found here. The NGHP User Guide to version 7.7 replaces Version 7.6 which was released on July 2, 2024.

MMSEA III – October 7, 2024 – NGHP User Guide Downloads 7.7

Chapter I: Introduction and Overview (PDF)

Updates: The updates listed below have been made to the Introduction and Overview Chapter Version 7.7 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 table describing system-generated emails has been updated to include information for the RRE ID Notification email that is sent once a user completes the initial registration function and the Successful Registration PIN email that is sent once vetting is successful on the Section 111 COB Secure Website (COBSW) (Table 7-1).

Chapter II: Registration Procedures (PDF)

Updates: The update listed below has been made to the Registration Procedures Chapter Version 7.7 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 table describing system-generated emails has been updated to include information for the RRE ID Notification email that is sent once a user completes the initial registration function and the Successful Registration PIN email that is sent once vetting is successful on the Section 111 COB Secure Website (COBSW) (Table 6-4).

Chapter III: Policy Guidance (PDF)

Updates: The updates listed below have been made to the Policy Guidance Chapter Version 7.7 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. For clarification, a note has been added to indicate that settlements, judgments, awards, or other payments obtained entirely under the wrongful death theory of liability, which do not claim and release medicals, or have the effect of releasing medicals, are not required to be reported (Section 6.5.1.4).

Chapter IV: Technical Information (PDF)

Updates: The updates listed below have been made to the Technical Information Chapter Version 7.7 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. For NGHP claim files, a new “04” warning flag will be applied to claim response files with open ORM records when the later date of either the CMS Date of Incident on the claim record or the Part A Add Date is greater than 135 calendar days from the Start Date of the RRE’s submission period. Additionally, compliance flag fields have been renamed warning flag (Sections 6.1 and 6.9.1 and Chapter 7). The table describing system-generated emails has been updated to include information for the RRE ID Notification email that is sent once a user completes the initial registration function and the Successful Registration PIN email that is sent once vetting is successful on the Section 111 COB Secure Website (COBSW) (Table 12-1). The description of Response File disposition code 03 has been clarified (7.1).

Chapter V: Appendices (PDF)

Updates: The updates listed below have been made to the Appendices Chapter Version 7.7 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. For NGHP claim files, a new “04” warning flag will be applied to claim response files with open ORM records when the later date of either the CMS Date of Incident on the claim record or the Part A Add Date is greater than 135 calendar days from the Start Date of the RRE’s submission period. Additionally, compliance flag fields have been renamed warning flag (Appendix C and Appendix G). The description of Response File disposition code 03 has been clarified (Appendix G).

270/271 Health Care Eligibility Benefit Inquiry and Response Companion Guide for Mandatory Reporting Non-GHP Entities Version 6.0

Changes for This Release: The email address for contacting an Electronic Data Interchange (EDI) Representative has changed to COBVA@bcrcgdit.com. However, COBVA emails coming from CMS now show the address as COBVA@mail.cms.hhs.gov (Customer Support).

For Additional Information

Sandy Simpson

03/Oct/2024

On September 23, 2024, CMS released new announcements regarding Civil Money Penalties. This follows other recent updates and webinars from CMS that have placed additional emphasis on reporting settlement details, and an even greater preference for claimants to use professional MSA administration.

A New NGHP Webpage for Civil Money Penalties

A new webpage for NGHP Civil Money Penalties (CMP) for Section 111 Reporting is now available. Click here to view it. The new webpage is a tool for Responsible Reporting Entities (RREs) to comply with Section 111 of the Medicare, Medicaid, and SCIP Extension Act. The RREs are required to report to CMS regarding the Medicare beneficiaries including information about liability insurance (including self-insurance), no-fault insurance, and workers’ compensation claims where the injured party is a Medicare beneficiary. The new page offers details on the CMP Final Rule, a CMP Workflow Chart, and more.

Expanding Reporting Requirements

The increased MSA mandatory reporting requirements fields enhance oversight and ensure proper coordination of benefits. Historically, CMS has had limited or incomplete information on MSAs which is why CMS has expanded the existing S111 mandatory reporting requirements. The expanded data fields will capture information on all WC claims involving Medicare beneficiaries who received a settlement.

Beginning April 4^th, 2025, all workers’ compensation settlements involving Medicare beneficiaries that include a MSA of $750 or more, must be reported to CMS, even if the settlement was previously reported voluntarily or did not previously meet the CMS review threshold for MSA submission, which remains at $25,000. For further details regarding reporting requirements, please refer to the NGHP User Guide.

A Reminder of the Expanded Data Reporting Fields

- MSA Amount
- MSA Period (# of Years)
- Funding Type (Lump Sum or Annuity)
- If Structured
- Initial Deposit Amount
- Anniversary (Annual Deposit Amount)
- Case Control Number
- Professional Administrator EIN

What Does All of This Mean?

CMS wants to be made aware of settlement details. The new NGHP CMP webpage is the most recent example that CMS is focused on S111 reporting, non-compliance, review of records for auditing to identify non-compliance, penalty amounts of non-compliance, and the process of how non-compliance decisions will be handed down.

On September 12, 2024, CMS presented a webinar (click here to view presentation) on Section 111 NGHP Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation. Additionally, a second webinar has been announced for another Medicare Secondary Payer & Civil Money Penalties webinar, scheduled for October 17, 2024, to provide a stage for any last-minute inquiries. CMS is taking every opportunity to promote its push for emphasis on receiving accurate and timely settlement information from RREs.

With the new expanded data requirements, very little will change in the way cases are handled by a professional administrator. On the other hand, claimants choosing to self-administer their MSA may find themselves exposed to greater risk of jeopardizing their Medicare benefits.

Reminder: Claimants who self-administer their MSA funds have hefty obligations so they do not jeopardize their Medicare benefits. These obligations include:

- - MSA funds held in an interest-bearing account
  - MSA funds may only be used for Medicare-covered and injury related expenses
  - Keep accurate record of expenses paid out of the MSA account
  - Coordination of health insurance benefits
  - Annual attestation reporting submitted to Medicare

Why Choose Medivest Asure for Professional Administration

With the additional responsibility and penalties looming overhead, doesn’t it make sense to work with an experienced Professional Administrator? Medivest was the first to professionally administer a MSA Account, and has been providing this service since 1998 – longer than any other company. Asure members have their MSA accounts managed by the Medivest team who will:

- - Ensure funds are spent down according to the allowable guidelines
  - Communicate with doctors, pharmacists, and DME suppliers for proper billing
  - Negotiate fees for medical services and future surgeries
  - Coordinate benefits with other health insurance plans including Medicare
  - Prepare required annual compliance documents for Medicare
  - Work with the medical providers and pharmacies of your choice
  - Protect Medicare entitlement by ensuring compliance with Medicare regulations

To download a Medivest Asure flyer, click here.

For Additional Information

Medivest

26/Sep/2024

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

CMS will be hosting a webinar regarding Certain Civil Money Penalties for NGHP Responsible Reporting Entities (RREs). The format will be opening remarks and a presentation by CMS that will include reminders about the Final Rule, the auditing process and important dates, followed by a question and answer session. RREs who would like to submit questions in advance of the webinar are encouraged to do so using the dedicated resource mailbox at Sec111CMP@cms.hhs.gov.

Date: October 17, 2024
Time: 1:00 PM ET

Webinar Link: https://cms.zoomgov.com/j/1602011678?pwd=e54vgVqZczEGeWbDf4hk95AeozMh47.1
Passcode: 145914

Or to connect via phone:

Conference Dial In: (833) 568-8864
Conference Passcode: 160 201 1678

Important Note: This is a public webinar and there is no pre-registration needed. The webinar link should only be utilized the day of the webinar. Due to the number of expected participants, please log in at least 10 minutes prior to the start of the presentation.

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

Older Posts

Conditional Payment Recovery

CMS’s Views – NSMSA / EBMSA / WCMSA

CMS’ Views – Traditional WCMSAs Arrangements

Changes to WCMSA Ref Guide -Section 4.3 – Non-Submit MSA Products

Mismanagement of WCMSA Accounts

Need for Professional Administration

How to Avoid Medicare’s Consequences

About Medivest

Take Aways:

For Additional Information

MMSEA III – January 6, 2025 – NGHP User Guide version 7.9 Downloads

For Additional Information

For Additional Information

MMSEA III – December 6, 2024 – NGHP User Guide Downloads 7.8

For Additional Information

Analysis

Proposed MSAs and Total Settlement Amounts

Medical vs Rx

Take Aways

Proposed vs Recommended

The Big Question

For Additional Information

MMSEA III – October 7, 2024 – NGHP User Guide Downloads 7.7

For Additional Information

A New NGHP Webpage for Civil Money Penalties

Expanding Reporting Requirements

A Reminder of the Expanded Data Reporting Fields

What Does All of This Mean?

Why Choose Medivest Asure for Professional Administration

For Additional Information

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

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