CMS to Hold WCMSA Webinar on February 17

The Centers for Medicare and Medicaid Services updated its Workers’ Compensation Medicare Set Aside (WCMSA) Reference Guide on 1/10/22 adding a section that addresses non-submit MSAs or evidence-based MSAs. The new section makes it clear that CMS will treat the use of such MSAs as a potential attempt to shift the financial burden of future medical care to Medicare.

Since the update, questions have swirled around whether CMS will follow through and deny payment for Medicare beneficiaries with non-submit MSAs.

Now we know CMS does and will.

Tower obtained a recent letter sent to a Medicare beneficiary claimant in which CMS advised that while a certain amount for future medical was agreed to in settlement between the claimant and the employer/insurer, as the claimant chose to forgo the CMS WCMSA review process, Medicare will not pay until the entire settlement minus procurement costs is exhausted.  In other words, the non-submit MSA is not recognized as the limit of settlement funds available to pay for future medical.

The letter states:

Section 1862(b)(2)(A) of the Social Security Act prohibits the Medicare program from making payment where payment was made or may reasonably be expected to be made by another party. 42 C.F.R. 411.46 specifically allows Medicare to deny payment for treatment of work-related conditions if a settlement does not “adequately protect Medicare’s interest”-that is, does not include enough money to pay for treatment of those conditions. Because you did not seek prior review and approval by CMS of the amount set aside in your settlement for your future medical care, Medicare will not pay for the treatment of your work-related condition until you have demonstrated the appropriate exhaustion of your “net” settlement proceeds. Please review the enclosed package for information about the submission of annual attestations. Once you have shown that the settlement proceeds (total settlement amount minus procurement costs such as attorney fees, and minus funds repaid to Medicare for care prior to the date of settlement) have been exhausted, Medicare will make payment again. If you have questions about this letter, please call RO-09 CUSTOMER SERVICE at (415) 744-3658.

Also notable is that CMS issued the letter on 1/13/2022, a few days after the WCMSA Reference Guide update on 1/10/2022.  In addition, the letter references a settlement date of 11/17/2021, one that occurred before the update. This confirms CMS is reviewing non-submit MSAs retrospectively.

The letter shows that CMS does not recognize the amount set aside for future medicals when it has not reviewed and approved the MSA. Instead, the Medicare beneficiary claimant must exhaust the amount in their entire settlement minus procurement costs before Medicare will cover future medicals. The following scenario illustrates this:

Parties settle a workers’ compensation case for $50,000 inclusive of $10,000 for a non-submit or evidence-based MSA.  Procurement costs (attorney’s fees and expenses) are $12,000 of the settlement.  Post-settlement the claimant Medicare beneficiary (whether self or professionally administering the MSA) uses the $10,000 to pay for injury-related treatment and medications. However, treatment is still needed.

At this point, Medicare’s position is that the entire settlement amount minus procurement costs, $50,000 – $12,000 = $38,000 is available to pay for such care.  It would need to be documented to CMS that not just $10,000, but $38,000 was paid for injury-related care before Medicare steps in to pay.

There is no problem with Medicare unless the $10,000 runs out and injury-related care is still needed.

As Tower discussed in our prior article, CMS; Non-Submit MSAs Potentially Shift Costs to Medicare, and in our recent webinar, many questions remain.  Some may be answered in CMS’s upcoming webinar on Thursday, February 17, at 1 p.m. ET.

Here is the announcement:

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

Note, there is no pre-registration, instead just follow the provided link shortly before the webinar start time.

Additionally, Tower is working with our industry colleagues at the National MSP Network (MSPN) to directly address questions around the policy and seek needed clarifications, especially around retrospective applicability, Medicare beneficiary claimant appeal rights, and settlements that do not meet CMS WCMSA review thresholds.

The bottom line is CMS has begun 2022 with a significant effort to assert what it believes is its right to claim the entire settlement amount, minus procurement costs, as available to pay for future injury-related medical when the settlement does not include a CMS-approved MSA. Parties to settlements where the CMS WCMSA review thresholds are met and the MSA is not submitted should be wary of the risks and the potential extent of liability for payment of future medical before Medicare will pay for injury-related care.

Since its founding a decade ago, Tower has recommended MSA submission when CMS review thresholds are met. Consequently, we have extensive experience in the CMS submission process and can identify and address MSA cost drivers and facilitate quick CMS MSA approval.  We would be pleased to discuss a seamless transition from a non-submit to submit MSA program which properly addresses future medical costs while also confirming CMS compliance.

If you have any questions, please contact Dan Anders, Chief Compliance Officer, at 888.331.4941 or daniel.anders@towermsa.com.

A recent study finds Medicare treatment denials systematically occur in medical claims for Medicare beneficiaries with Medicare Set-Asides (MSAs).

“Don’t worry so much about the Medicare Set-Aside; Medicare will never deny post-settlement treatment claims.”  That is the refrain from some when the matter of an MSA inclusion in settlement arises.

Tower has consistently warned that Medicare has steadily increased efforts to protect the agency’s interests. One need only look at CMS’s Section 111 Mandatory Insurer Reporting platform or its two conditional payment recovery contractors, the CRC and BCRC, to see CMS is serious about enforcing the Medicare Secondary Payer (MSP) Act. Still, some believe that Medicare will not deny claims post-settlement.

Thanks to our Professional Administrator Partner Ametros, we now know CMS will deny post-settlement claims for injury-related treatment.

Ametros wanted to know what happened when a Medicare beneficiary with a fully funded, CMS-approved MSA failed to report proper exhaustion of funds to Medicare and then billed Medicare for injury-related claims.  To find out, Ametros’ General Counsel Shawn Deane and Senior Strategic Account Executive Jayson Gallant worked with the Research Data Assistance Center (ResDac) to analyze Part B claim data.

The result?

Researchers examined a random sample of five percent of the Medicare beneficiary population over a three-year period. They estimated the following number of claims were denied because WCMSA funds were responsible for their payment.

• 35,980 in 2018
• 36,060 in 2019
• 30,720 in 2020

The key conclusion of the report is “Medicare is systematically denying MSA recipients’ claims, and with steady frequency.”

You can download the free report “A Study of CMS Policy on Treatment Denials for Injured Workers with a Medicare Set Aside from Ametros’ website (ametros.com/medicaredenials).  Plus, Ametros will present the study’s findings in a February 15 webinar starting at 1 p.m. EST. Register here.

Practical Implications

As Tower always suspected–and as CMS always warned–the agency will deny claims that should be covered by an MSA.  Consequently, the most important implication is the need for the proper administration of those funds whether that is with professional administration or self-administration assistance.  Both services are available through our partner Ametros and are recommended for most MSAs.

The study specifically indicated it did not consider non-submit MSAs or non-CMS-approved MSAs.  One might argue then that a non-submit MSA is the better option because if CMS is not aware of the MSA, it will not deny payment for injury-related medical care.  Such a position is problematic for the following reasons:

• While CMS may not be aware of a non-submit MSA, it is aware of any settlement involving a Medicare beneficiary claimant because these are reported through the Section 111 reporting process.
• CMS recently updated its WCMSA Reference Guide to add Section 4.3 which views non-submit/evidence-based MSAs “as a potential attempt to shift financial burden” to Medicare.  The guidance goes on to state that “CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses.”
• Given CMS has a process in place to deny injury-related treatment in CMS-approved MSAs, where a CMS-approved MSA is not on records, CMS can presumably use the Section 111 reporting information to deny payment for medical treatment up to the settlement amount.

Accordingly, a non-submit MSA when the MSA qualifies for CMS review/approval presents its own risks and with CMS’s increased focus on non-submit MSAs, these risks are heightened.

Whether a CMS-approved MSA or non-submit MSA is used, payers should commit to producing MSAs that balance care, cost and compliance and strongly encourage those MSAs are professionally administered by a company like Ametros.

Tower will host a webinar on February 5 at 2 p.m. ET, WC Settlements in Light of CMS Policy on Non-Submit MSAs which will touch on the Ametros study and further discuss the implications of CMS policy toward non-submit MSAs.  Register here.

Please contact Dan Anders at daniel.anders@towermsa.com or 888.331.4941 with any questions.

The Centers for Medicare & Medicaid Services updated its Workers’ Compensation Medicare Set-Aside Reference Guide (Version 3.5) with new language on non-CMS-approved products used to address future medical care.

The update specifically addresses products commonly called evidence-based MSAs or non-submit MSAs. CMS says these products may be viewed as a potential attempt to shift financial burden to Medicare when they are not submitted, reviewed, and approved before settlement.

CMS Addresses Non-Submit MSAs in Updated WCMSA Guidance

CMS states that it cannot be certain Medicare’s interests are adequately protected unless a proposed amount is submitted, reviewed, and approved through the process described in the reference guide before settlement.

As a matter of policy and practice, CMS says it will deny payment for medical services related to the workers’ compensation injury or illness until the claimant demonstrates appropriate exhaustion. This could require exhaustion equal to the total settlement less procurement costs, rather than only a CMS-approved WCMSA amount.

Key Takeaways From the CMS Policy Update

CMS directly addresses evidence-based and non-submit MSAs in the reference guide.

The agency says non-CMS-approved products may be treated as a potential attempt to shift financial burden to Medicare.

CMS also states that it may deny payment for medical services related to workers’ compensation injuries until the total settlement has been exhausted.

This policy does not appear to be limited only to future MSAs. It could also affect existing non-submit MSAs unless CMS provides further clarification.

Questions About Non-Submit MSAs and CMS Approval

This does not appear to be a completely new CMS position. CMS has long stated that when an MSA is not approved, Medicare may deny related medical claims or pursue recovery for claims it paid, up to the full amount of the settlement.

What is different is that CMS now directly addresses evidence-based MSAs, non-submit MSAs, and vendor indemnifications that may accompany those arrangements. CMS also indicates that a claimant may need to demonstrate complete exhaustion of the net settlement amount before Medicare resumes primary payment for injury-related care.

What This Means for Payers and Beneficiaries

If a non-submit MSA was used to settle a case, CMS involvement is typically triggered when Medicare is asked to pay for injury-related medical care.

If the MSA amount is enough to cover that care, the beneficiary may not have an immediate issue. However, if the MSA is exhausted, CMS has made clear that it may deny payment.

For payers, this may create concern if indemnification, guarantees, or other liability provisions were used in connection with a non-submit MSA. Those provisions may be tested if Medicare denies payment for future injury-related care.

Cost-Effective CMS-Approved MSAs Are Possible

The non-submit MSA route is often based on the belief that CMS-approved MSAs include unrealistic allocations. However, Tower MSA Partners has found that MSA costs can often be contained while still pursuing CMS approval.

Tower does this through a clear understanding of CMS’s MSA pricing methodology, proactive record review, and targeted physician statements. This process helps move cases toward settlement while reducing the risk that CMS may later deny payment for future injury-related medical care.

Please contact Chief Compliance Officer, Dan Anders, with any questions about this or any other MSP compliance issue at Daniel.anders@towermsa.com or 888.331.4941.

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