Everyone updates, including the Centers for Medicare and Medicaid Services (CMS). In October, the CMS released its updated Medicare Set Aside (MSA) reference guide, version 3.0, which replaces version 2.9 released just in January of this year. As participants in the MSA system make changes to reflect the new guidelines, they should be careful to note and follow the new standards.
Not All Changes are Equal
Not surprisingly, because the CMS is an immense bureaucratic organization, some of the changes are relatively small and more administrative in nature. These, while interesting, won’t affect the processing of MSAs to any great extent. Other changes offer insights into interesting trends that may not have an impact in the near future but suggest more changes may be coming in the next year or so. Still other changes, however, carry critical legal ramifications, so understanding and implementing those new requirements will be necessary to remain in compliance with MSA administration standards.
Notable Changes – Need to Know
There are two notable changes to the Guide that will have an impact on every future MSA: the revised “Consent to Release” rules, and the extension of the “Amended Review” opportunity from four to six years.
“Consent to Release” Form rules
Date of compliance: April 1, 2020
What it Says
The new rule requires all MSA applications to attach an updated “Consent to Release” form that includes language indicating that the beneficiary understands the details of the MSA process. It must also reflect their comprehension that their medical and other records will be shared with CMS and its agents (in particular, the WC Review Contractor – WCRC). The critical language will indicate that the injured party understands:
- the intent of the MSA;
- how the MSA submission process works, and
- how the administration of the established MSA will work.
Additionally, at the very least, the claimant’s initials should appear on the consent form to establish its validity, but full signatures are the optimal choice.
Why it’s Important
‘Informed consent’ is a significant legal principle that ensures that when people give up their rights in exchange for something, they are doing so knowing the full ramifications of the transaction. “Informed” means that the person has been given all the information needed to understand and make decisions about the circumstances at hand.
- In the legal sphere, informed consent is needed when criminals negotiate plea deals, for example, or people undertaking a contract agree to perform certain functions in exchange for contract benefits.
- In the healthcare sphere, informed consent means that patients are given all the information available about their condition, its treatment options, alternative options, and the benefits and risks involved in each.
The premise behind ‘informed consent’ is that a person can only truly commit to an action when they understand all the potential impacts it may have on their life.
In the MSA sphere, and in the MSA application process in particular, ‘informed consent’ means four things:
- that the injured person intentionally agrees to share all their relevant information with not just their medical team, but also with the insurers, the legal people and the CMS MSA administrators;
- that the injured person understands the intent of the MSA (to cover future, injury-related medical costs) and agrees that they will comply with that agreement once it is established;
- that they understand the process of establishing the MSA, including the requirement of sharing all the details of their case with the other parties to the WC claim, and
- that the CMS will maintain continued vigilance over the established MSA (via regular reports, etc.) after it’s approved and the underlying legal case has closed.
Failure to obtain and submit proof of informed consent often renders moot whatever decisions were made without it. Failure to provide evidence of informed consent by an injured worker in a WC case may result in the setting aside of either or both the negotiations and final ‘agreements’ of the parties to the ‘final’ MSA contract.
The CMS includes a template for an appropriate Informed Consent document in the new Guide. Those forms are required in MSA application submissions after April 1, 2020.
Extension of the “Amended Review” Period
What it says
The new Guide states that requests to review the details of a submitted MSA application can now be submitted up to 72 months after that initial MSA application was sent in. The previous rule limited such submissions to 48 months after the initial documents were transmitted.
Why it’s Important
This change is significant because it reflects CMS’s awareness that medical conditions, treatment options, and outcomes change and that MSAs can be rendered obsolete or insufficient as a result. While the 24 months between four years and six years may not seem like a significant length of time, in the healthcare field, it could mean the difference between a lifetime of pain or a complete recovery due to advanced interventions. For employers, it could mean the avoidance of significant medical expenditures for workers who, because of new healthcare developments, are able to achieve improved outcomes at less cost.
There are, of course, caveats to the new rule:
- It applies when a potential MSA case hasn’t settled but already has a conditional CMS approval for an MSA when it does.
- It is only available when the new information suggests a change (increase or decrease) of 10% or $10,000 (whichever is greater) in the cost of injury-related care over the cost indicated in the initial application.
The change in care costs must be justified by noting in line items to the proposal:
- Details regarding the costs of benefits already received by the beneficiary, including references to supporting records. References to those records must also be included in the new plan;
- Details reflecting where initially proposed care is no longer needed. If replacement care is substituted for that which was noted in the initial proposal, the amended proposal must include references to the replacement care, and
- Additional line items detailing the new types of care not included in the initial plan.
- All requests for changes to treatment plans must include medical records supporting the claim.
When approved by CMS, the approved amount becomes effective on the date of settlement of the case. Also, note that substituting generic drugs for non-generic drugs is not a justification for an amended review unless it is included among the justifications listed above.
CMS has provided additional information for electronic filing for those considering how to manage a newly available Request for Re-Review opportunity.
Interesting Changes – Good to Know
CMS has also enhanced its requirements on individual elements of the MSA process:
- CMS “highly recommends” using a professional WCMSA administrator – rather than self-administration – to manage the MSA account when the claimant is prescribed controlled substances that are (by CMS definition) “frequently abused drugs.” This clarification takes note of the Opioid crisis and the relationship between WC cases an opioid addiction and abuse, and CMS recommends establishing a Drug Management Program when such drugs are prescribed.
- When considering the terms of the MSA, CMS now requires using the updated 2016 Life Table to determine lifetime expectancies. Just in January, the agency recommended the 2015 table. Comparison of those tables indicates that, while most of the predictions remain stable (the average life expectancy for every child born today is 78.7 years), life expectancy for blacks have declined by .2 years: for males, from 72.2 years in 2015 to 72 years in 2016; and for females, from 78.5 years in 2015 to 78.3 years in 2016. The life expectancy for Hispanic males has also declined by .2 years (from 79.3 to 79.1 years), while Hispanic females experienced no such decline.
The change, however slight, would impact the overall value of an MSA in the event of
the need for lifelong care.
- When a claimant dies before the funds in the MSA are exhausted, a new clarification gives guidance. It requires that, for self-administered MSAs, the CMS Benefits Coordination and Recovery Center (BCRC) managing the MSA should be notified of the death so it can ensure that all providers are fully paid with MSA funds. If there are still funds remaining, then state law would govern their dispersal.
- Administratively, CMS enhances electronic management of the MSA account by permitting electronic attestations for both Self and Representative accounts. Users can now electronically file their annual Attestations and upload supporting documentation through the portal. The enhanced filing opportunity also assists beneficiaries who wish to review their files, and who can do so using a link they can set up at the MyMedicare.gov site.
For all participants in the Medicare Set-Aside arena, the updated Guide offers important information for future MSA development and management. These new rules reflect the Agency’s awareness and acknowledgment of today’s realities:
- People need to be fully apprised of the circumstances of their case before they can commit to the MSA terms;
- Injury-related medical care evolves over time, and sometimes more time is required to identify the full scope of the injured worker’s medical plan.
- Drug addiction concerns continue to plague Medicare; MSAs should reflect sensitivity to that concern.
- Technology will continue to improve the communications and management of MSAs into the future.
We can only assume that future updates will be as thoughtful and comprehensive as this one is.