New WCMSA Reference Guide Provides Much Needed Clarification On Section 4.3
By B. Smith
On March 21, 2022, the Centers for Medicare and Medicaid Services (CMS) released a new Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide, Version 3.6. The update to the Guide includes a revision to Section 4.3 addressing “Non-CMS Approved Products.”
The first Guide issued by CMS addressing non-submit WCMSAs, Version 3.5, was released in January 2022. CMS stated in Section 4.3 of this Guide that “as a matter of policy, 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.”
After the release of this Guide, CMS hosted a webinar. During this webinar CMS acknowledged that the law had not changed, the submission process remained voluntary, and CMS always had the right to review whether an MSA was properly exhausted and / or whether the MSA reasonably considered Medicare’s interest. Despite this acknowledgement, many opined that the language used in the Guide made clear that without approval from CMS, medicals would automatically be denied, and claimants would be forced to spend the entire settlement amount until CMS would take over as primary payer.
Changes to Section 4.3
CMS held various meetings with Medicare Secondary Payer groups and vendors, who asked CMS to eliminate or revise the language in Section 4.3 to be consistent with applicable law and with CMS’ own policies. In Version 3.6 of the Guide, CMS did provide additional revisions to this language which states in pertinent parts as follows:
A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide… 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. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
The new language clarifies that CMS “may” instead of “will” deny payments for medical services related to the Workers’ Compensation injury and require the exhaustion of the total settlement, unless, at the time of exhaustion, it is shown that the MSA was sufficient and properly exhausted. This statement is in line with CMS’ policy and the law. If an MSA is reasonable and is properly administered, CMS will take over as primary payer once the MSA funds are exhausted.
Below Threshold MSAs and Section 4.3 Enforcement
CMS notes that Section 4.3 will apply to notifications of settlement with non-submits it receives after January 11, 2022, and those settlements of which CMS has received notice prior to this date where a Common Working File (CFW) flag has already been issued.
With respect to below threshold MSAs, CMS states as follows:
CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.
In sum, CMS clarified that its interest must be protected in all claims even if settlement is below the CMS review threshold and CMS does not expect or require notification of these below threshold cases.
We have and continue to offer Certified MSAs, non-submit MSAs, and WCMSA submissions to our customers. For additional questions regarding this update or for further information about our services, please contact us.