CMS Issues New Guidance on Evidence-Based MSAs in WCMSA Reference Guide Version 3.5

Earlier this month, CMS issued Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide Version 3.5. The guide includes a new section, The Use of Non-CMS-Approved Products to Address Future Medical Care (Section 4.3), which states:

“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.”

Assessment & Commentary
As a stakeholder actively involved in a non-submit or evidence-based medicine MSA program, we understand how this new wording may be of concern. However, MEDVAL is working to engage CMS and demonstrate that:

  • CMS review of MSAs is a voluntary process (reiterated in this same reference guide in Sections 4.2 and 8.0). However, the language in Section 4.3 indicates there is a penalty for non-participation. This mixed message is confusing and contradictory.
  • Section 4.3 fails to recognize the full extent of 42 C.F.R. 411.46, which also provides if a settlement stipulates that a specific portion of a lump-sum settlement is intended to pay for future medical expenses, then Medicare is excluded from making payment up to the amount designated for future medical.
  • CMS’ description of an evidence-based, or non-submit, MSA is incorrectly labeled as a method “improperly giving reasonable recognition to both medical expenses and income replacement”.
  • The beneficiary will be unjustly burdened by appealing future denial of benefits based upon CMS’ broad policy of deciding that any MSA not submitted through their voluntary review program represents a potential shift of payment of medical expenses to Medicare.

Efforts to Affect Change
MEDVAL plans to work with our customers and partners to make necessary adjustments in the short term, while simultaneously taking action to address the language in Section 4.3. Our strategy includes:

  • serving as a subject matter resource to our customers’ legal teams
  • supporting our customers in evaluating their decisions to maintain or adjust their current MSP compliance programs
  • collaborating with industry trade groups and other MSP compliance companies to present a unified message by identifying areas of concern in Section 4.3
  • lobbying political influencers to affect change

We recommend that your legal team thoroughly review the new reference guide (with a particular focus on Section 4.3) to determine the best course of action for your business – keeping in mind that CMS submission remains a voluntary process, and the statute (42 C.F.R. 411.46) has not changed. For further discussion, please contact us at [email protected].