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 and Medicaid Services’ updated Workers’ Compensation Medicare Set-Aside Reference Guide (Version 3.5) has a new section on the use of “Non-CMS Approved Products to Address Future Medical” that says CMS views non-submit/evidence-based MSAs “as a potential attempt to shift financial burden” to Medicare.  Below is the new section followed by key takeaways and Tower answers to questions stemming from the new policy.

4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care

 A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.  

As a matter of policy and practice, 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. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.

Key Takeaways

1. CMS specifically speaks to evidence-based / non-submit MSAs for the first time in the reference guide.
2. CMS will treat the use of non-CMS approved products as a potential attempt to shift the financial burden to Medicare, calling this process “improper”
3. As a matter of “policy and practice,” CMS will deny payment for medical services related to WC injuries until total settlement has been exhausted. 
4. CMS does not limit this to future MSAs only…this could impact existing non-submit MSAs.

Questions and Answers

Does this represent a change in CMS policy toward non-approved MSAs?

No. As mentioned in other sections of the reference guide, CMS has consistently stated that when an MSA is not approved, Medicare may deny related medical claims or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement.

What CMS does do in this version of the reference guide is to directly address evidence-based and non-submit MSAs along with MSA vendor indemnifications that sometimes accompany such MSAs.  It presumes non-CMS-approved products may represent a cost-shift to Medicare.

This presumption then leads to their next statement in which they indicate the claimant will need to demonstrate complete exhaustion of the net settlement amount before CMS will pay primary for injury-related medical care.  Consequently, this could mean that even with an MSA, the claimant would need to access their settlement funds to pay for future injury-related medical care.

Is Section 4.3 applicable to all MSAs ever done or prospective MSAs?

There is no indication that this policy only applies to future MSAs and settlements.  Consequently, unless CMS says otherwise payers should assume that CMS takes this position for any settlement whether past or future.

If a non-submit MSA was used to settle a case does the beneficiary have cause for concern?

Keep in mind that CMS involvement is only triggered when Medicare is requested to pay for injury-related medical care.  If the MSA amount sufficiently pays for such care, then the beneficiary does not have to worry. However, if the MSA amount is exhausted, then CMS has made it clear that it will deny payment.

What happens if the claimant wants to dispute the denial?

The claimant Medicare beneficiary has a statutory right to appeal Medicare’s denial.  Presumably, the beneficiary or someone on their behalf will need to submit an appeal.  The appeal would assert that the non-submit or evidence-based MSA was reasonable at the time of settlement.  The outcome of this is uncertain as to date CMS has not routinely denied medical care in settlements involving non-submit and evidence-based MSAs.

If a non-submit MSA was utilized to settle a case does the payer have cause for concern?

If the payer provided some type of indemnification or guarantee or is otherwise open to liability for a failure to properly fund future medical, those provisions may be tested.

What about non-submit MSAs that could not be submitted because the CMS MSA review threshold was not met?

If CMS was to deny payment in these cases the Medicare beneficiary could rebut the denial based on the reasonableness of the MSA at the time of settlement and on the basis that there was no CMS WCMSA review process available to ascertain whether the amount appropriately addressed Medicare’s interests.

How does this affect my MSA program?

If you have a program that largely obtains CMS MSA approval when review thresholds are met, then Section 4.3 is not relevant except for MSAs that were under threshold. (However, I believe Section 4.3 targets settlements that meet CMS MSA review thresholds.)

On the other hand, if you have maintained a program that largely does not submit MSAs to CMS for approval, then the risk of MSA exhaustion and denial of injury-related medical is real.

Tower recommends taking a critical look at whether non-submit/evidence-based MSAs remain the best policy for you and the injured worker.  Once plaintiff attorneys review this policy, they may not consider a non-CMS-approved MSA sufficient to protect their client’s access to Medicare for injury-related care in the future.

Cost-Effective CMS-Approved MSAs are Possible

The non-submit MSA route has usually been taken based on an assumption that all CMS-approved MSAs contain unrealistic allocations.  While there are some of those, Tower has found that MSA costs can be contained so that a CMS-approved MSA can pave the way to settlement.  We do this through a clear understanding of CMS’s MSA pricing methodology and knowing exactly what will lead to MSA increases or development letters that delay CMS MSA approval.  Tower proactively obtains records and physician statements or works with our clients to do this so cases can be settled without concern that CMS may 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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