Employers, carriers and claimants frustrated by the inability to obtain a revised CMS MSA approval after a substantial change in the claimant’s pre-settlement medical condition may find relief from CMS in 2017. Also in 2017, CMS will be issuing a policy regarding use of utilization reviews in MSA submissions. These potentially significant improvements in the CMS MSA review process are provided in a 12/21/2016 “teaser type” announcement on CMS’s website which states:

The Centers for Medicare & Medicaid Services recently revisited the task of reviewing its process for addressing requests for CMS to “re-review” otherwise approved Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts. In Calendar year 2017, CMS expects to update its existing re-review process to address situations where CMS has provided an approved amount, but settlement has not occurred and the medical care that supported the approved amount has changed substantially. CMS also expects its updated process to address situations where certain states rely on Utilization Review Processes to justify proposed WCMSA amounts.

A link to the announcement may be found here.

What are the implications of this announcement from CMS?

No immediate change to CMS MSA review policies

Importantly, this is an announcement of an expected change to the MSA re-review process and the introduction of a UR policy in 2017. CMS provides no timeline beyond future announcements will occur in 2017. Consequently, there is presently no change to CMS MSA review processes or policies.

Substantial change in medical may present opportunities for revised MSA approvals

The announcement implies CMS will be expanding its MSA re-review process to cover MSA approvals where there has been a “substantial change” in the claimant’s medical condition. According to the CMS statement, this policy would only apply to cases “where settlement has not occurred.” In other words, if settlement has occurred (we assume settlement of medical) CMS will not consider a re-review.

Based upon the limited announcement it is also unclear how CMS will define “substantial change.” For example, must an actual reduction in medical care and/or prescription medication use be documented or simply a certain monetary threshold increase or decrease versus the prior MSA amount be demonstrated? This is an important question CMS will have to address as while a claimant’s medical care may not have substantially changed, the cost of the claimant’s prescription medications may have substantially reduced such as when a medication goes generic.

While the definition of “substantial change” will be the subject of a future CMS policy announcement, Tower MSA nonetheless expects this MSA Re-Review expansion to present a significant opportunity for carriers/employers and claimants to settle medical on cases which have languished unsettled for years as a result of prior high CMS MSA approvals. Reductions in a claimant’s medical costs over the years or the successful implementation of a plan to reduce a claimant’s inappropriate prescription medication regimen will yield not only a lower MSA allocation, but CMS approval of this updated MSA. The opportunity for an updated and lower MSA will facilitate claim settlements and closures.

Wait and see approach warranted regarding CMS policy on URs

The extent CMS will recognize state Utilization Review processes remains unclear based upon this announcement. Presently, CMS generally recognizes California UR determinations as a limitation on medical care in the MSA if upheld through the statutory Independent Medical Review (IMR) process as the IMR component is understood by CMS to be a final determination subject to appeal only under very limited circumstances. Other state UR processes have not been recognized as they are not considered by CMS to be final determinations. Accordingly, Tower MSA recommends taking a wait and see approach to how CMS defines its policy on URs in MSAs.

Concluding thoughts

Tower MSA applauds the potential expansion of the CMS MSA Re-Review process to encompass pre-settlement MSA approvals where there has been a substantial change in medical care as this gives carriers/employers and claimants a second-chance to settle long-standing open medical claims. We are also hopeful CMS will expand its policy on recognizing state UR process beyond California’s IMR process. We will closely monitor CMS for an announcement concerning the implementation of this policy change and provide you further analysis and recommendations.

If you have any questions regarding this CMS announcement please contact Dan Anders, Tower MSA Chief Compliance Officer, at (847) 946-2880 or Daniel.anders@towermsa.com