CMS Issues New Guidance on Zero-Dollar WCMSAs and Updates Calculation Methods for Intrathecal Pumps

by B. Smith & C. Chovanec
The Centers for Medicare and Medicaid Services (CMS) issued a new Workers’ Compensation Medicare Set-Aside Reference Guide version 4.2, dated January 17, 2025. Updates in this version of the Guide include a new policy impacting the review of zero WCMSA submissions, and a correction to the calculation method for Intrathecal Pumps.
Zero-Dollar WCMSA Submissions
Although submission of a WCMSA is never required, CMS has been reviewing WCMSA zero-dollar allocations without much, if any, written guidance, as to what is specifically needed to obtain approval. This has sometimes led to inconsistent decisions and directives from CMS. As such, submissions are much more of an art than a science when it comes to zero-dollar allocations. To this point, IMPAXX has maintained a documented 96% success rate obtaining WCMSA approvals on zero-dollar MSAs.
CMS has noted for several years that they do not prefer to review zero-dollar MSA submissions and, as noted in Section 4.2 of the Guide, beginning July 17, 2025, will no longer be doing so. CMS has also provided guidance to determine if a zero-dollar MSA is appropriate.
This section states that submitting a WCMSA for review is never required, a WCMSA is not necessary if the claimant is only being compensated for past medical, and there is no evidence that the claimant is attempting to maximize other aspects of the settlement to Medicare’s detriment. CMS goes on to note that these conditions can be demonstrated through any of the following:
- The individual’s treating physician documents in medical records that to a reasonable degree of medical certainty the individual will no longer require any treatments or medications related to the settling WC injury or illness; or
- The workers’ compensation insurer or self-insured employer denied responsibility for benefits under the state workers’ compensation law and the insurer or self-insured employer has made no payments for medical treatment or indemnity (except for investigational purposes) prior to settlement, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future or past medical or pharmacy services as a condition of settlement; or
- A Court/Commission/Board of competent jurisdiction has determined, by a ruling on the merits, that the workers’ compensation insurer or self-insured employer does not owe any additional medical or indemnity benefits, medical and indemnity benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services; or
- The workers’ compensation claim was denied by the insurer/self-insured employer within the state statutory timeframe allowed to pay without prejudice (if allowed in that state) during investigation period, benefits are not actively being paid, and the settlement agreement does not allocate certain amounts for specific future medical services.
Significantly, CMS states that entities should maintain documentation to support the zero-dollar allocation. CMS also goes on to state that they will not issue verification letters, and they do not waive their potential recovery for conditional payments made prior to the settlement.
It is imperative that parties to a settlement who are contemplating a zero-dollar allocation have support for the same and meet these guidelines. Working with a partner who has a successful track record obtaining zero-dollar approvals from CMS and an understanding of what CMS is looking for now and going forward is also critical for success. Keep in mind, this comes at a time when Responsible Reporting Entities will need to report the amount of the WCMSA as part of their Section 111 Reporting requirements, and this includes zero-dollar MSAs. IMPAXX stands ready to answer questions and work with customers to develop program parameters around zero-dollar MSAs.
Calculation Methods for Intrathecal Pumps
In Section 9.4.3, titled WCRC Review Considerations, and section 9.4.5, titled Medical Review Guidelines, CMS provides additional updates around how they review cases submitted to them, and how to calculate future costs of intrathecal pumps.
In section 9.4.3 CMS added specificity to their internal review process. The updated language calls out the use of claimant’s past use and future recommended treatment as supported by the medical records as carrying the most weight, followed by evidenced-based guidelines for prescription medications and medical treatment allocations etc. The remaining language in this section is unchanged.
In Section 9.4.5, Medical Review Guidelines, CMS recognized a flaw in calculating the revision of intrathecal pumps and spinal cord stimulators and updated the instructions for calculating these replacements. Instructions remain the same for calculations when the device has not yet been implanted. CMS includes examples to demonstrate the calculations, and the end result allows the review contractor and allocator to arrive at the same accurate result.
For more information or if you have any questions about these updates, please reach out to the IMPAXX Settlement Consultant team at [email protected].