CMS Hosts Webinar on WCMSAs; Confirms New Section 4.3 of the WCMSA Reference Guide on Non-Submit MSAs is not a new policy; CMS will Recognize Reasonable Non-Submit MSAs

*This article contains a paraphrased summary of CMS’ February 17, 2022 webinar. CMS will provide a copy of the webinar presentation slides and the audio transcript within a few weeks.

By: Brendon De Souza, Esq., CMSP, Managing Attorney, Sanderson Firm

Today, the Centers for Medicare & Medicaid Services (CMS) hosted a webinar to discuss several Workers’ Compensation Medicare Set-Aside (WCMSA) topics, including, but not limited to, the use of non-submit MSAs, CMS’ assessment of MSA submissions where the injured claimant’s treatment has ostensibly ended, state-specific legal denials, and Amended Review and Re-Review. John Jenkins, whom is a Health Insurance Specialist at CMS, lead the entirety of the webinar.

Hundreds of listeners tuned-in to this highly anticipated webinar given that CMS quietly published a significant update to the WCMSA Reference Guide regarding non-submit allocations early last month without public comment. This article will begin with a spotlight on CMS’ comments regarding non-submit MSAs, and it will then focus on the remaining webinar topics pertaining to submitted WCMSAs.

Non-Submit (or Non-CMS-Approved) Allocations (“Not a New Policy”):

During the webinar, CMS verbally confirmed that it holds “the same position we’ve always held” with respect to non-submit MSAs. To put things simply, Section 4.3 of the WCMSA Reference Guide is, as CMS stated, “not a new policy,” and nothing from a legal, regulatory, or policy standpoint has changed.

So then what prompted CMS to issue written policy guidance regarding non-submit MSAs? CMS cited that an increased frequency of questioning from the MSP community on CMS’ policy toward Non-Submitted MSAs pushed CMS to confirm its position in writing. Unfortunately, CMS’ written position caused some confusion regarding below-threshold MSAs and the usage of non-submit MSAs generally.

With respect to below-threshold MSAs (i.e., a) the claimant is a Medicare beneficiary, but the settlement amount is $25,000 or less, or b) the claimant has a reasonable expectation of Medicare enrollment within 30 months of settlement, but the settlement amount is $250,000 or less), CMS confirmed that such allocations should not be submitted to CMS for review. CMS further confirmed that it will issue a written update to the WCMSA Reference Guide clarifying this misunderstanding as it pertains to non-threshold settlements.

With respect to the safety of non-submit MSAs generally, readers may be aware of a redacted CMS letter circulating within the industry on one particular Non-Submitted MSA where CMS acknowledged that it 1) was notified of a recent workers’ compensation settlement, 2) understands that the settlement included a non-submit MSA, and 3) cautions that it has the legal authority to deny payment for the injured claimant’s work-related medical care if the settlement does not adequately protect Medicare’s interests. While this letter may look daunting, it is simply CMS putting the beneficiary on notice that it retains the right to review the reasonableness of the MSA should the claimant bill Medicare for workers’ compensation injury related treatment. Thus, this letter has no meaning until the claimant: 1) exhausts his/her MSA; and 2) CMS proves that the Non-Submit MSA and/or the claimant’s expenditures out of the MSA account were not reasonable.

Further, it is important to keep in mind, that any CMS intervention will come with administrative appeal rights. Therefore, if the non-submit MSA funds are exhausted, and CMS denies payment, the injured claimant will be presented with an opportunity to demonstrate that the non-submit MSA was an adequate protection of Medicare’s interests before an Administrative Law Judge (ALJ) through the traditional Medicare beneficiary appeals process. If the MSA vendor backs the Non-Submit MSA, the MSA vendor can assist the beneficiary with providing documentation as to the reasonableness / thought-process behind the calculation of the Non-Submit MSA.

Furthermore, CMS’ verbal statements during the webinar confirmed that CMS will not automatically assume that a non-submit allocation, in and of itself, represents a burden-shift to the Medicare Trust Fund. Instead, CMS will evaluate a non-submit allocation amount post-exhaustion to determine whether it was sufficiently funded. It should also be noted that Mr. Jenkins stated several times throughout the webinar that submission of an MSA to CMS is “voluntary.”

CMS’ Evaluation of Traditional WCMSAs (CMS Assumes “Worst-Case Scenario”):

CMS continues to recommend submitting MSAs for review and approval, yet CMS conceded that it assumes the “worst-case scenario” when evaluating an MSA submission package. CMS provided the following examples where it will assume that an injured claimant’s treatment is incomplete:

· The injured claimant has not returned for treatment in several years

CMS assumes the injured claimant may still seek treatment in the future

· Surgery is recommended, but the injured claimant is not medically cleared to receive the surgery

CMS assumes that the injured claimant will become medically cleared in the future or will be entitled to an alternative option in lieu of surgery

· A treating provider does not prescribe the injured claimant with any medications, and the same treating provider documents that no additional treatment is warranted

CMS may assume that the provider is a specialist, and that the injured claimant’s primary care physician may still recommend future medical care. If it is the case that the injured claimant only treated with their primary care physician and such physician indicated that no future care is required, CMS indicated that parties should not submit an MSA for review.

· Surgery is recommended by the treating physician, but an independent medical review denies the need for surgery

CMS assumes that an alternative treatment option may exist, and CMS may also defer to the treating physician’s opinion

· An attorney issues a written legal opinion confirming that the application of state-law precludes the employer or workers’ compensation plan from future medical responsibility

CMS assumes that the attorney’s written opinion is invalid without a court of competent jurisdiction or board order confirming the applicability of state-law preclusion

In each of the above-referenced examples, CMS assumes that additional (or alternative) medical treatment, in some shape or form, remains necessary. Understandably, CMS does not want to be left “holding the bag” so-to-speak, and CMS specifically stated that it would “include all possible treatment” to protect its future interests. That said, where the medical and/or legal evidence supports that CMS’ future interests will remain protected without effectively over-allocating (i.e., assuming the “worst-case scenario”), parties remain free to opt-out of CMS voluntary MSA submission process.

Miscellaneous, Notable Points:

Reminder: CMS must review the settling parties’ settlement documents once settlement has been finalized. Final settlement documents may be submitted electronically through the Workers’ Compensation Set-Aside Web Portal or via regular mail.

· There are currently no potential changes regarding dispensing fees for prescription drugs.

· If parties wish to appeal a CMS-approved allocation that is outside of the six (6) year Amended Review window, the parties do not have any basis to appeal and CMS’ Common Working File will remain “flagged” with the CMS-approved amount (“At the end of the day, CMS will deny treatment for that approved MSA via flag in the CWF”).

· In instances where an approved MSA file misses an annual attestation, that file is audited via a flag in CMS’ Common Working File. The flag will not be removed until there is an attestation confirming appropriate use of account funds.

· Medicare Part D Plans (Prescription Drug Plans) have not specifically asked for CMS to share full MSA details with them.

· CMS confirms that previous policy memoranda are “no longer relevant.” Such memoranda have been intentionally archived and are superseded by the WCMSA Reference Guide.

As indicated by our previous article, no change in CMS non-submit MSA policy has occurred and reasonable Non-Submit MSAs remain a viable option, as submission of MSAs to CMS even where review threshold is met remains a voluntary option. Sanderson Firm maintains that each workers’ compensation payer should carefully consider their settlement goals and risk tolerance when deciding to either pursue a Non-Submit MSA or CMS approval on a WCMSA.

Sanderson Firm continues to offer both traditional Workers’ Compensation Medicare Set-Asides (WCMSAs) and Non-Submit MSAs. We will always back and stand behind our MSA work product, whether the MSA is submitted to CMS or not. Please contact us if you are interested in our Medicare Set-Aside services, or with any questions or concerns regarding the CMS webinar held today.