The Centers for Medicare and Medicaid Services recently hosted a webinar on Workers’ Compensation Medicare Set-Asides (WCMSAs). While the webinar covered several topics around MSA submissions, CMS policy toward non-submit and evidence-based MSAs was an attendance-driver, according to its presenter, John Jenkins, Health Insurance Specialist for the CMS Division of Medicare Secondary Payer Operations.

As Tower’s recent articles CMS: Non-Submit MSAs Potentially Shift Costs to Medicare and CMS Letter Confirms Non-Submit MSA Denial is Real noted, the addition of Section 4.3 to the WCMSA Reference Guide has raised many questions and led some payers to reconsider whether non-submit MSAs are the best option for them.

Here is a webinar summary with Tower’s comments on Mr. Jenkins’ statements pertaining to non-submit MSAs along with a breakdown of some of the other matters discussed.

Non-Submit MSAs

Mr. Jenkins explained that the addition of Section 4.3 on non-submit and evidence-based MSAs was in response to industry requests for CMS’s position on such products.

He said that Section 4.3 is consistent with prior policy announcements which advise that Medicare has a right of recovery up to the settlement amount when the MSA is not CMS-approved and is prematurely exhausted.

• Tower comment:  As we indicated in our prior article on Section 4.3, we believed this would be CMS’s position.

Mr. Jenkins could not clear up the question about MSAs that do not meet the CMS WCMSA review thresholds, i.e., Medicare beneficiary and total settlement higher than $25,000.  First, he said CMS treats these as if they never existed, thus the total settlement would be considered available to pay for future medical. However, later he said that if CMS obtains the non-submit MSA amount, that amount may be used to determine the “marker” in their system (This marker determines whether Medicare will pay for a certain treatment). Ultimately, he indicated further policy guidance will be issued around under-threshold MSAs.

• Tower comment:  The common working file is CMS’s system to coordinate benefits to Medicare beneficiaries so that Medicare does not pay when a primary payer is available to pay. CMS places the marker for certain diagnoses to enable it to deny payment for treatment related to those diagnoses codes.  CMS needs to clarify how under-threshold MSAs will be treated. If parties have included a clinically and/or legally reasonable and defensible MSA in the settlement or have acceptable reasons for not including one, CMS should limit the liability for future medicals to the MSA amount. Perhaps CMS will have a post-settlement review process but its details are not clear at this time.

Mr. Jenkins went on to indicate that if CMS receives the non-submit documentation, settlement, and MSA amount, then it will use this information to place a marker in the common working file to deny medical care until such time as the settlement is exhausted.

According to Mr. Jenkins, CMS expects that Medicare should never see an injury-related bill if the non-submit MSA is priced correctly. If the MSA prematurely exhausts, the Medicare beneficiary will have to provide reasons for its exhaustion. Then it would be up to CMS to determine if the allocation and spending of the MSA were appropriate, using the same process used to approve MSAs.

• Tower Comment:  Mr. Jenkins said that they see many instances of CMS-approved MSA funds exhausting and expects the same from non-submit MSAs. Even the best cost projections for future medical care are, in the end, still predictions. Future medical inflation alone will increase costs in addition to changes in treatment and medications. Thus, while a majority of non-submit MSAs will appropriately cover future medical care, some non-submit MSAs–just like some CMS-approved MSAs–will exhaust.

Mr. Jenkins referenced conducting some type of review if non-submit MSA exhausts, similar to the current pre-settlement WCMSA review process. Naturally, this raises more questions.  First, who is completing the review? The current CMS WCMSA review contractor, CMS itself, or some other contractor? What criteria will be used as part of the review? What documentation must be submitted to support the MSA allocation as sufficient and the fund spending as appropriate? To verify adequate funding, the same documentation used at settlement (medical treatment records, prescription histories, and rated ages) would likely be required. We assume appropriate spending of the funds would be determined using healthcare bills and payment receipts.

Mr. Jenkins advised that if a structured MSA’s funds exhaust in any given year, CMS will not temporarily step in to pay for injury-related care as it does with a CMS-approved MSA.

• Tower Comment:  This leaves anyone with a non-submit MSA annuity in a difficult position. They would need to use their personal funds to pay for medical until next annuity payment is received when they could theoretically reimburse themselves. Even if they can reimburse their medical bills from the annuity payment, CMS is not likely to agree that reimbursing interest payments that occurred from putting medical bills on a credit card is an appropriate use of these funds.

Mr. Jenkins was clear in stating that the MSA, whether CMS-approved or not, is an agreement solely between CMS and the Medicare beneficiary.

• Tower Comment:  This indicates that CMS will not take any action against the employer or insurance carrier as they are not seen as a party to the agreement. That said, there remain repercussions to the payer. A Medicare beneficiary claimant may be reluctant to agree to a settlement with a non-submit MSA. Additionally, the workers’ compensation board, commission or other governing authority may be less likely to approve such a settlement.

Mr. Jenkins stated that a large number of CMS-approved MSAs exhaust early and that non-submit MSAs are even more likely to exhaust early.

• Tower Comment:  The allegation that a large number of CMS-approved MSAs exhaust early is, thus far, unsupported by data from CMS.

As to whether Section 4.3 of the reference guide applies retrospectively or just prospectively, Mr. Jenkins said that while what was stated in this section has always been CMS policy, anything after 1/11/22 must meet this requirement.

• Tower Comment:  We believe this statement is still unclear. Does this mean that CMS will only apply this policy to settlements that occur after 1/11/22 or does it apply to settlements that took place before 1/11/22 when MSA funds continued to be used after that date?

Finally, Mr. Jenkins advised that Section 111 reporting and WCMSAs are not connected. Therefore, the agency does not use the Section 111 Total Payment Obligation to the Claimant (TPOC) data to place a marker in the common working file.

• Tower Comment:  While this has been our understanding, CMS’s statement that it does not use Section 111 reporting data to stop Medicare payment for post-settlement medical is significant. It means that unless the settling parties proactively advise CMS of a non-approved MSA, CMS will continue to pay for injury-related care because it is unaware that an MSA was funded.

While the webinar answered some questions around CMS’s approach to non-submit MSAs, many remain. We believe CMS needs to significantly increase its guidance to Medicare beneficiaries surrounding their rights, responsibilities, and the risks they face when settling a claim with a non-submit MSA. At a minimum, CMS may not automatically acknowledge the non-submit MSA amount as the extent of liability for future medical. Consequently, the Medicare beneficiary may be placed in a position to defend the MSA amount and their spend from that amount at some point years in the future.

Other MSA Matters

• Submission of settlement documents:  CMS continues to identify cases where settlement occurred, and the settlement documents were not forwarded to CMS. These documents must be submitted to make the MSA effective in CMS’s system.
• Electronic attestation:   Mr. Jenkins indicated that MSA administrators are not submitting yearly and final attestations electronically even though this option is available. He encouraged its use.
• State statutes:  Advised that parties who wish to limit the MSA per the Georgia 400-week cap need to provide an order from the Georgia Workers’ Compensation Board confirming the claim as non-catastrophic. Also, if a California Independent Medical Review (IMR) confirms the denial of certain care, CMS will not exclude the denied care from the MSA without an “Alternative Treatment Plan” from the treating physician.
• Pricing of Prescription Drugs:  Addressed a question about whether CMS would consider another pricing mechanism for prescription drugs other than Red Book by saying that CMS is always open to a discussion on alternatives.
• Lack of updated medical treatment:  In situations where the claimant has not been treated in several years CMS will not assume that this is sufficient evidence to demonstrate that no further care is necessary. Instead, CMS will consider the worst-case scenario and assume that the claimant will return for care.
• Comorbidities that prevent surgery:  If a comorbidity, such as cardiac or respiratory problems, prevents a surgery from proceeding, CMS will assume that the person will improve and thus allocate the surgery in the MSA.
• Release from care statements:  If a treating physician releases a claimant from care this does not automatically create a presumption of no future care. CMS assumes that if a specialist releases the claimant from care that there may be follow-up with a primary care physician for ongoing maintenance unless otherwise indicated.
• MSA Amended Reviews:  Advised that parties who have a previously approved MSA that falls outside of the 72-month window for submitting an Amended Review can still fund that older approved MSA as it will be the only one on record with CMS.

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

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.