CMS Updates WCMSA Reference Guide; Provides Much Needed Clarity Around Non-Submit/EBMSAs
Today, after much anticipation, the Centers for Medicare & Medicaid Services (CMS) published an update to the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (Version 3.6, updated March 15, 2022). The description of changes states the following:
“Clarification has been provided regarding the use of non-CMS-approved products to address future medical care (Section 4.3), as well as documentation and re-review tips (Sections 9.4.1.1, 10.2, and 16.1).”
This article will discuss the updates for each of these sections, in turn, below.
Section 4.3 Updates – The Use of Non-CMS-Approved Products to Address Future Medical Care
CMS has, no doubt, very much softened the language to this section of the Reference Guide. The opening sentence specifically notes the “voluntary” nature of participation in the WCMSA review process, which was noticeably absent from the prior version of the Reference Guide. Even though CMS has recently made statements on record confirming that submission of MSAs are voluntary, it is particularly poignant that CMS intentionally makes reference to voluntary submission in the same section previously believed to strong-arm parties into submission.
The following sentence is now also included in Section 4.3:
“As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.” (Emphasis added).
Note that CMS again uses soft and permissive language (“may”) here to describe its ability to deny payment. In the prior version of the Reference Guide, CMS used the phrase “will deny payment.” Also of note, CMS added clarification to confirm that conditional payments were included in the total settlement amount valuation. The prior version simply indicated that CMS’ denial of benefits could potentially equal the total settlement amount less procurement costs.
Arguably, the most important part of this Updated Section 4.3 for workers’ compensation payers that may still be interested in utilizing Non-Submit MSAs in their settlements is that CMS recognizes that a Non-Submit MSA will not be automatically deemed to be a burden shift to Medicare. CMS notes in the above that when the MSA fully exhausts, parties will have an opportunity to demonstrate that both the initial funding of the MSA was sufficient and utilization of MSA funds was also appropriate. An MSA vendor that will stand behind their MSAs makes this a crucial point for settling parties.
Additionally, this updated version 4.3 now confirms that CMS’ review of a non-submit MSA is specifically triggered when the funds have exhausted. In our experience, parties often assume that CMS’ silence serves as an approval of a non-submit MSA. It is imperative that settling parties are fully informed on the duration and scope of an MSA provider’s indemnification program. Failure to inquire about an MSA providers’ indemnification may expose parties to unanticipated exposure.
Finally, this version now explicitly clarifies that “CMS does not expect notification or submission where [Workers’ Compensation Review Contractor – WCRC] thresholds are met,” which was previously a point of confusion. Thus, CMS will not review MSAs/settlements under their current review thresholds, and CMS will not issue a “Does not meet threshold” type letter. Still, CMS maintained its position that settlements must still consider Medicare’s interest, even if review thresholds are met. In other words, there are “no safe harbors” and in under threshold settlements, CMS expects that the parties establish some future medical allocation/Non-Submit MSA to protect the rest of the settlement dollars from CMS recovery.
Section 9.4.1.1 Updates – Most Frequent Reasons for Development Requests
The five most frequent reasons for WCRC remain the same; however, several sentences have been added to the end of the first three bullet points to note that certain documents are required for all submissions.
Section 10.2 Updates – Consent to Release Note
This section now indicates that electronic signatures on Consent to Release documents must be E-Sign Act (The Electronic Signatures in Global and National Commerce Act – signed into law in June of 2000) compliant if signed electronically by the claimant or the claimant’s authorized representative.
Section 16.1 Updates – Re-Review
The following bullet point has been added:
· “Should no change be made upon response to a re-review request (i.e. no error was identified), additional requests to re-review the same error will not be entertained.”
This revision confirms that appealing parties only get one bite of the proverbial apple in pursuing a Re-Review of a CMS determination.
Sanderson Firm Commentary: Sanderson Firm is very pleased to see that CMS provided an open forum for industry feedback, listened to the concerns and confusion of the industry, and implemented the requested changes in official policy guidance. Moving forward, we encourage CMS to expand upon its non-submit MSA policy stance by specifically addressing the administrative appeals process available to Medicare beneficiaries should CMS deny benefits and/or determine that a non-submit MSA does not appropriately protects CMS’ future interests.
All in all, the update was a markedly positive improvement to the previous version given the updates to Section 4.3. While some may remain cautious of non-submit MSAs as a settlement tool, CMS has, in no uncertain terms this time, confirmed that participation in CMS review is wholly voluntary. Sanderson Firm will continue to provide (and fully indemnify) non-submit allocations. The settling parties (not the MSA vendor) should decide the method of funding and administration, and Sanderson Firm is poised to defend the parties’ decision, no matter the settlement structure.
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