Michael Stack, CEO of AMAXX and publisher of the Reduce Your Workers Comp blog, has authored another exceptional article, Steps to Optimize Medicare Set Asides Before — and After — Settlement, which, among other topics, provides key indicators of an effective MSA partner and details the importance of clinical intervention to addressing MSA cost-drivers.

Michael is a recognized thought-leader on improving the management of workers’ compensation claims and driving better outcomes. We encourage anyone interested in improving their MSA outcomes to read Michael’s straightforward analysis and his easy to implement recommendations.

Tower MSA Partners can help you define, measure and manage the metrics that yield the best balance of care, cost and compliance to continuously improve your MSA outcomes. For more on our data-driven philosophy, see Tower CEO Rita Wilson’s article, What Gets Measured Gets Managed . . . What’s Your Number?

For questions, or to learn more about Tower’s MSP compliance solutions, please email us at info@towermsa.com or call us directly at 888.331.4941.

In the recently released updated WCMSA Reference Guide (See Version 2.9, January 4, 2019), CMS provides both notable and minor changes to its policies and procedures surrounding its review of workers’ compensation MSAs. Significantly, CMS clarifies its reasoning behind expanded inclusion of Lyrica in MSAs and, through a policy statement and examples, warns settling parties of the necessity of protecting Medicare’s interests in future medicals. We review the highlights from the updated reference guide and add our assessment of the practical implications of these changes.

 

Protection of Medicare’s Interests

 

CMS added the following statement to Section 4.2 Indications that Medicare’s Interests are Protected:

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. 

Further, in an effort to clarify expectations for protecting Medicare’s interests in under threshold situations, CMS added the following to Section 8.1 Review Thresholds:

Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00). 

Example 2: A 47 year old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement. 

 

Practical Implications

The CMS WCMSA Reference Guide previously included language emphasizing the need to protect Medicare’s interests when medical is settled in WC cases. With the changes to Section 4.2 and 8.1 we have another shot across the bow warning of the consequences of not protecting Medicare in settlement. These updates appear directed toward those settling cases above the CMS MSA review thresholds, but not submitting their MSAs to CMS for approval, and those settling cases under CMS MSA review thresholds and either not including an MSA or including, what CMS may deem, an underfunded MSA.

Do these warnings signal increased enforcement by CMS in this area? We are not aware of CMS routinely denying payment for injury related medical care where the settling parties have not submitted an MSA to CMS for review and approval.   Neither are we aware of instances where CMS is seeking to recover from settling parties for Medicare payments for post-settlement injury-related medical care where no MSA was submitted for approval. This is not to say CMS couldn’t take such action in the future, but is an observation based upon 15 years of experience with the CMS WCMSA review process and CMS’s enforcement efforts. Accordingly, whether to submit an MSA to CMS when the review thresholds are met or to include an MSA on an under threshold case remains a risk management decision for the settling parties.

 

Spinal Cord Stimulator Pricing

Modifications were made to Section 9.4.5 Medical Review Guidelines as they pertain to the pricing of Spinal Cord Stimulators (SCS). Notably, CMS advised that if the type of SCS implanted or recommended to be implanted is unknown, then it will default to pricing a non-rechargeable single array SCS versus a rechargeable SCS.

 

Practical Implications

CMS’s statement regarding defaulting to a non-rechargeable SCS when the type implanted or recommended to be mplanted is unknown has been CMS policy for quite some time, just not included as policy in the reference guide. Why is this important? Because CMS policy is to include a revision for a non-rechargeable SCS every seven years while a rechargeable is included every nine years. Consequently, depending upon the life expectancy used in the MSA, defaulting to a non-rechargeable SCS can add a significant cost to the MSA. We are disappointed CMS continues with this policy as our experience has shown a significant majority of implanted SCS are rechargeable versus non-rechargeable.

 

Inclusion of Lyrica

Last October Tower advised of our concern regarding the increased inclusion of Lyrica in MSAs by CMS (See Apparent Change in CMS Policy Expands Inclusion of Lyrica in MSAs). The apparent is now reality with CMS adding the following to Section 9.4.6.2 Pharmacy Guidelines and Conditions:

Example 1: Lyrica (Pregabalin) is cited in MicroMedEx for an off-label medication use related to neuropathic pain from spinal cord injury, and a number of scientific studies indicate that Pregabalin shows statistically significant positive results for the treatment of radicular pain (a type of neuropathic pain). Spinal cord neuropathy includes injuries directly to the spinal cord or its supporting structures causing nerve impingement that results in neuropathic pain. Lyrica is considered acceptable for pricing as a treatment for WCMSAs that include diagnoses related to radiculopathy because radiculopathy is a type of neuropathy related to peripheral nerve impingement caused by injury to the supporting structures of the spinal cord.

 

Practical Implications

Tower’s interpretation of this statement is CMS will allocate Lyrica in the MSA when there is evidence of radicular pain stemming from the spinal cord (cervical, thoracic and lumbar) even when there is no evidence of what is defined as a “traumatic” spinal cord injury. What remains unclear is whether CMS considers nerve pain resulting from an injury outside if the spinal cord, i.e. hands or feet, to be a basis for inclusion of Lyrica in the MSA.

Lyrica is not available in a generic form which can result in a significant cost when added to the MSA. While Pfizer’s patent is set to expire on 6/30/2019, it can still take some time after expiration for a generic to come on the market and even then, the generic may not represent a significant cost reduction from the brand name. Accordingly, alternatives to Lyrica should be considered prior to submitting an MSA to CMS for approval.

 

MSA Administration

Added to Section 18.0 CMS’ Monitoring is the following:

Additionally, the contractor must ensure that Medicare makes no payments related to the WC injury until the WCMSA has been used up. This is accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted. 

 

Practical Implications

This addition emphasizes the technical aspect of CMS’s monitoring of spend from the MSA, whether self or professionally administered. CMS is emphasizing that when an approved MSA is in place it will deny payment for injury-related medical care until such time as the MSA is temporarily or permanently exhausted. Indeed, Tower is aware that CMS has initiated stepped up efforts at monitoring MSA spend and this statement is consistent with that effort.

 

CMS Memorandum

Finally, CMS removed the CMS Memorandum dating back to July 2001 from Appendix 4 WCRC Proposal Review Reference Tools. Also removed from the Reference Guide were most references to prior CMS memorandum.

 

Practical Implications

As CMS states in Section 1.0 of the Reference Guide, “The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents.” As such, removal of the CMS memorandums issued since 2001 is a natural consequence of the Reference Guide becoming the official guidance document for all matters pertaining to CMS review of WCMSAs.

Overall, the WCMSA Reference Guide update confirms policies or practices which have previously been implemented by CMS. We appreciate CMS’s efforts at informing the MSA submitter community of these changes and continue to encourage CMS management to provide such transparency with future modifications to its program.

Please contact Dan Anders at Daniel.anders@towermsa.com or (888) 331-4941 with any questions.

 

This past week the Office of Management and Budget posted two rulemaking notices from the Centers for Medicare and Medicaid Services (CMS), one with implications for the consideration of future medicals in liability settlements and the other regarding criteria for imposing penalties under the Medicare Secondary Payer Act related to the Section 111 Mandatory Insurer Reporting requirements.

 

Liability and Future Medicals

The first notice titled Miscellaneous Medicare Secondary Payer Clarifications and Updates (CMS-6047-P), states as follows:

This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund. Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.

A timetable is given which provides for a Notice of Proposed Rulemaking to be issued by September 2019.   While no-fault insurance and worker’s compensation is mentioned in the notice, it is expected that any eventual rule regarding Medicare Set-Asides will be primarily applicable to liability.

CMS has gone down this road before, having issued an Advanced Notice of Proposed Rulemaking in 2012 which provided proposed options for considering Medicare’s interests in liability settlements. CMS ultimately withdrew its proposal, but in June 2016 announced that it was again considering expanding the WCMSA review process to liability. Notably, CMS included a provision in the contract with the new Workers’ Compensation Review Contractor for an expansion of reviews to liability. However, no such expansion can occur into there are rules and a policy in place to review what would be effectively Liability MSAs.

In regard to those rules, we are somewhat surprised by CMS proceeding the regulatory route. It was our expectation that CMS would follow a similar course as they have done with workers’ compensation, namely a voluntary review process in which a policy has been laid out through a series of CMS memos which culminated in a CMS WCMSA Reference Guide. CMS has either decided to proceed with the regulatory route for a policy pertaining to liability and future medical or they are keeping their options open.

Given the September 2019 date to have a NPRM issued, this signals that a final regulation would not even be in place until at least 2020. And as we have seen before (See below regarding regulations on penalties), the regulatory process can take many years.

 

Mandatory Reporting Penalties

The second notice issued by CMS through the OMB is titled Civil Money Penalties and Medicare Secondary Payer Reporting Requirements (CMS-6061-P) and states as follows:

Section 516 of the Medicare Access and CHIP Reauthorization Act of 2015 amended the Social Security Act (the Act) by repealing certain duplicative Medicare Secondary Payer reporting requirements. This rule would propose to remove obsolete Civil Money Penalty (CMP) regulations associated with this repeal. The rule would also propose to replace those obsolete regulations by soliciting public comment on proposed criteria and practices for which CMPs would and would not be imposed under the Act, as amended by Section 203 of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act).

While the verbiage in this notice is somewhat confusing, what this refers to is CMS is planning to issue a formal document requesting comments and proposed criteria for when CMS would impose what are called Civil Money Penalties (CMPs) for improper reporting or a failure to report under the Medicare Secondary Payer Act. As many will recall, the inducement for workers’ compensation, liability and no-fault carriers and plans to abide by the Section 111 Mandatory Insurer Reporting provisions was the possibility of a $1,000 per day, per claim penalty contained in the statute. However, since the start of mandatory reporting in 2010, no penalties have been issued.

Part of the reason penalties have yet to be issued is because the SMART Act of 2012 required CMS to issue regulations detailing the criteria for imposing penalties before CMS could take such action against what we know as Responsible Reporting Entities (RREs). In December 2013 CMS did issue an Advanced Notice of Proposed Rulemaking (ANPRM) to solicit comments and proposals for criteria under which Civil Monetary Penalties would be imposed under the reporting provisions of the MSP Act. A 60-day period was provided for stakeholders to provide comment to CMS. It was assumed that following this response period the regulatory process would move forward with a final regulation on the imposition of CMPs.

Surprisingly, post the comment period, no further action was taken by CMS. Five years later we now have this notice indicating CMS will once again solicit public comment on imposing CMPs. A due date is given of September 2019.

The implication of this notice is at some point between now and September 2019 CMS will publish a document requesting comment on the criteria for imposing CMPs for failure to comply with MSP reporting requirements. We will keep you apprised of any developments in this regard. Nonetheless, this is one area, penalties, where RREs are likely fine with CMS taking its time.

Lyrica is a brand name only medication which costs $8.91 per pill at 150mg. Over a 20-year life expectancy, this is close to $200K in an MSA allocation. Until recently, CMS largely excluded Lyrica from the MSA on the basis that the diagnosis for which it is being prescribed, typically neuropathic pain stemming from a lumbar injury, is considered non-Medicare-covered. Unfortunately, over the past three months, based upon MSA counter-highers received by Tower, CMS has seemingly begun to add Lyrica where a diagnosed condition of lumbar radiculopathy is present.

CMS Policy on Inclusion of “Medicare-covered” Medications in the MSA

Pursuant to the CMS WCMSA Reference Guide (Version 2.8), CMS will include causally related medications in the MSA under the following criteria:

Medically Accepted Indications and Off-Label Use

 For a drug to be covered under the Part D Benefit, and thus included in a WCMSA, it must be used for a medically accepted indication. A medically accepted indication is any use for a covered outpatient drug which is approved by the FDA or a use which is supported by one or more citations included or approved for inclusion in the recognized compendia.

Off-label use is when a drug is prescribed in a manner that is different from the FDA-approved product labeling. According to Medicare IOM 100-02 Chapter 15 Section, 50.4.2 – Unlabeled Use of Drug (Rev. 1, 10-01-03) B3-2049.3, “An unlabeled use of a drug is a use that is not included as an indication on the drug’s label as approved by the FDA. FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice. In the case of drugs used in an anti-cancer chemotherapeutic regimen, unlabeled uses are covered for a medically accepted indication as defined in §50.5.” There are many off-label indications that are listed in recognized compendia and peer-reviewed sources; thus, they would be covered under the Part D Benefit, and should also be included in a WCMSA.

For example, trazodone is approved by the FDA for the treatment of major depressive disorder but is commonly given off-label to treat insomnia. So the WCRC would include trazodone in a WCMSA if used to treat insomnia if it is related to the workers’ compensation injury.

In summary, based upon this criteria, CMS’s practice has been to include medications in the MSA when either their use is for an FDA approved diagnosis or for a medically accepted indication as found in the “recognized compendia,” namely Micromedex’s DrugDex database or the American Hospital Formulary Service Drug. CMS cites the example of Trazadone which is FDA approved for major depressive disorder but is used off-label to treat insomnia. Insomnia is a medically accepted indication found in the DrugDex.

Inclusion of Lyrica in the MSA

In terms of Lyrica, the FDA approves its use for the following diagnoses:

• Diabetic peripheral neuropathy
• Fibromyalgia
• Neuropathic pain from a spinal cord injury
• Partial Seizure; Adjunct
• Postherpetic neuralgia

If any of the above diagnoses are present in a claimant’s course of injury-related medical care, Lyrica would be included in the MSA, if prescribed. CMS would also include Lyrica if a medically accepted indication was found in one of the two compendia.

CMS’s recent inclusion of Lyrica where it is prescribed to treat lumbar radiculopathy does not fit into any of the FDA approved uses or the medically accepted indications found in the compendia. While an FDA approved use is neuropathic pain from a spinal injury, a spinal cord injury is typically defined as traumatic damage to the spinal cord resulting in permanent changes in strength and/or sensation and other bodily functions. This is very different than the intervertebral disc degeneration or post-laminectomy syndrome which may typically be causative factors for lumbar radiculopathy. Consequently, it is unclear why CMS has determined Lyrica should be included for a diagnosis of lumbar radiculopathy.

Tower MSA has submitted Re-Review requests to CMS, but the response has thus far been their restating of the policy on inclusion of “Medicare-covered” medications in the MSA. What CMS is not explaining is how the policy applied to the FDA-approved uses or compendia identified uses for Lyrica establish the basis for inclusion of the medication in the MSA. The National Alliance of Medicare Set-Aside Professionals (NAMSAP), for which Tower is a member, has reached out to the senior CMS management for clarification of CMS policy toward Lyrica. As of the date of this article, no response has been received.

Practical Implications

As highlighted at the top of this article, the inclusion of Lyrica in the MSA can add a significant sum to the allocation. While CMS has yet to provide a clear explanation as to their actions or issue an official policy statement, the trend from MSA counter-highers points to Lyrica being included in the MSA when lumbar radiculopathy is diagnosed. As detailed above, Tower does not believe this is an appropriate interpretation of CMS’s own rules for determining whether a medication is Medicare-covered and thus included in the MSA.

Until such time as CMS clarifies its policy, Tower will continue to exclude Lyrica from MSAs where we have not identified a medically accepted indication, either as an FDA-approved use or as found in the recognized compendia. As our client, we will advise you of the potential of a counter-higher from CMS, but will continue to challenge any counter-higher we believe inappropriately adds Lyrica.

In terms of options where an MSA includes a diagnosis of lumbar radiculopathy for which Lyrica is being prescribed, they are as follows:

• Submit the MSA and risk a counter-higher;
• Settle without CMS-approval of the MSA;
• Await further challenges to CMS’s Lyrica policy to see if there is a rollback;
• Consider alternatives to Lyrica use; or
• Await Lyrica patent expiration for a price reduction when generics become available*

*While Pfizer’s patent on Lyrica was set to expire in December 2018, the FDA has extended it through June 2019 based on a program encouraging drug companies to demonstrate whether drugs have a pediatric use.

We will provide any updates which provide clarification as to CMS’s inclusion of Lyrica in MSAs. If you have any questions, please contact Dan Anders at (888) 331-4941 or Daniel.anders@towermsa.com.

 

On 10/1/2018, the Centers for Medicare and Medicaid Services (CMS) released updates to the Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide, the Medicare Secondary Payer Recovery Portal (MSPRP) User Guide and the MMSEA Section 111 Medicare Secondary Payer Mandatory Reporting NGHP User Guide. These updates to the reference guide and user guides are all fairly minor, having minimal to moderate impact on the associated CMS MSP processes. A summary of the updates is provided below.

WCMSA Reference Guide

The WCMSA Reference Guide provides for most CMS policies pertaining to the review and approval of MSAs. Version 2.8 of the guide provides as follows:

HICN Replaced with MBI: As CMS explains:

As required by Section 501 of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) of 2015, CMS must discontinue all Social Security Number (SSN)-based Medicare identifiers and distribute a new 11-byte Medicare Beneficiary Identifier (MBI)-based card to each Medicare beneficiary by April 2019. All fields formerly labeled as “HICN” have been relabeled as “Medicare ID” and can accept either a HICN or the new MBI.

Updated CDC Life Expectancy Table Link: While with this Reference Guide update CMS is not presently changing the CDC Life Expectancy Table used for calculating life expectancy in the MSA, CMS is updating the link which was outdated.

Revised Tables Pertaining to Verifying Jurisdiction and Calculation Method: In states where the fee schedule provides for regional adjustments, for example, New York, the Reference Guide lists criteria for determining the correct fee schedule rates to use in the MSA. CMS added an additional level of criteria and revised the table (9-1) that provides what is called an “Order of Precedence” in determining the zip code to utilize for pricing. CMS also added a table (9-2) clarifying pricing rules when claims are filed with U.S. Department of Labor Office of Workers’ Compensation Programs and states where no fee schedule is applicable.

MSPRP User Guide

The MSPRP is a web-based portal providing online access for attorneys, Medicare beneficiaries, insurers and authorized representatives to Medicare conditional payment information, the ability to dispute and/or appeal conditional payments and initiate the Demand Letter process among other tasks. Version 4.3 of the User Guide includes the addition of two new columns to the Case Results page providing for Case Status and Contractor, news fields which provide more relevant and updated information for claims awaiting response from the BCRC and three new warning pages to ensure information related to submitting redetermination, compromise or waiver requests is complete.

A notable improvement comes with the submission of Letters of Authority or Proofs of Representation allowing for third-party representatives, such as Tower MSA Partners, to act on behalf of insurers and Medicare beneficiaries. The process has been once a Proof of Representation or Letter of Authority is submitted through the portal the submitter would be required to wait a few days for the authorization to be authenticated. Updates to the MSPRP now allow authorizations to be uploaded to the portal with immediate authentication. As a result, the cuts down on the time to obtain Medicare conditional payment information.

Section 111 NGHP User Guide

CMS released Version 5.4 of the NGHP User Guide, which provides both policy and technical updates for the Section 111 Mandatory Insurer Reporting process. Notable updates are as follows:

• As a result of Angel Pagan replacing Jeremy Farquhar as the EDI Department Director, new contact information is provided.
• To ensure updates are applied to recovery cases appropriately, RREs are asked to submit the policy number uniformly with a consistent format. When sending updates, enter the policy number exactly as it was entered on the original submission, whether zeros or a full policy number (Section 6.6.5). 
• The excluded and no-fault excluded ICD-10 diagnosis codes have been updated for 2019 (Appendix I and Appendix J)

Practical Implications

We do not anticipate the changes to the WCMSA Reference Guide to have any impact on either increasing or decreasing allocations on CMS-approved MSAs. As noted above, the updates to the MSPRP authorization authentication process will improve the turnaround time for obtaining conditional payment information. Finally, the Section 111 User Guide updates are all minor in nature and have minimal impact on the reporting processes.

If you have any questions regarding these updates, please contact Dan Anders at (888) 331-4942 or Daniel.anders@towermsa.com.

Tower MSA Partners brings you WCI-TV, the televised coverage of the WCI Conference (Aug. 19-22). Be sure to tune into WCI-TV in the conference hall or your hotel or while shuttling back and forth for insights on the topic of Knocking Down Barriers to Settlement of Claims. #WCI2018

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