The MSA – A Nexus of Legal and Medical Interests

Just as no two car crashes are the same, neither are two Workers’ Compensation cases (WC), especially when the need for a Medicare Set Aside (MSA) account is a possibility. To ensure the protection of the interests of both the injured worker and the Centers for Medicare and Medicaid Services (CMS) throughout the WC claim process, CMS uses both medical and legal principles to confirm the values submitted in every MSA proposal. Companies submitting MSA proposals should be familiar with those principles to avoid unnecessary delays or other complications when working to resolve the case.

 

No Two Injured Workers are the Same

Lawyers will tell you that every legal case is unique. Even incidents with almost identical fact patterns will differ based on the individual circumstances of those specific occurrences. Doctors will tell you the same thing; patients with identical diagnoses will have different treatment plans and prognoses based on their biological circumstances. Consequently, when the Workers’ Compensation Review Contractor (WCRC) reviews an MSA proposal, they look at the individual and unique circumstances of both the legal and medical situations when deciding to accept, modify or reject it. Not surprisingly, those reviews are comprehensive and complex. WC claimants and parties to the WC case who understand and follow the WCRC's procedural review guidelines stand a better chance of obtaining a swift response and acceptance of their proposal so they can resolve the case and move on.

 

New Guide - Clearer Guidelines

CMS recently updated its Workers’ Compensation Medicare Set Aside Reference Guide (now version 3.2) to clarify the steps its WCRCs take when reviewing submitted MSA proposals. Any party seeking an MSA should follow these guidelines and use the same tools used by the WCRC to determine the values they include in their documents.

 

Legal Principles and Factors

The WC case incorporates both legal and medical factors. To resolve the issues in the legal proceeding, the parties work together to determine the exact cause of the injury, who (or what) was responsible for causing it, the nature and extent of the damage, and who will pay for the medical costs needed to help the injured worker recover from it.

 

The WCRC begins its review by ensuring all the legal requirements are met and appropriate:

  • CMS requires that all claimant information be included and accurate, including their status as a Medicare beneficiary or their eligibility for Medicare services within the appropriate timeframe. A signed consent document must also be submitted with the proposal.
  • It then looks for documentation asserting that the case's facts are clearly established and that there are no discrepancies or outstanding issues that might negatively impact their findings. Documentation included here would be the court filings and agreed-upon settlement documents that state how the injury occurred, who or what caused it, and an agreement by the appropriate party that they are responsible for the costs.
  • In addition to the legal documents indicating liability factors are the medical documents showing diagnosis and prognosis and records of payments made for care received to manage the injury. In most MSA cases, CMS covered initial costs of care services until the finalization of the legal determination. CMS is reimbursed for these payments, so the MSA proposal must include a complete payment history of all costs incurred related to that injury. Further, the costs summary must clarify whether payments made were for expenses, medical care, or indemnity.
  • Once the claimant's identity and eligibility are clear, and the documentation is complete, the WCRC then looks at the WC rules that exist within the jurisdiction where the injury occurred. Each of the fifty states uses its individual interpretation of WC laws, so the WCRC will structure its response to the proposal based on the rules that govern within the specific jurisdiction.

 

Medical Principles and Factors

The medical evaluation is more complicated than the legal review. Every claimant presents with individual characteristics, each of which can influence how they experience their injury, the choice of treatment they receive, and the nature and extent of their recovery period. To properly evaluate every claimant, the WCRC team uses a series of tools to ensure their review is as comprehensive to that individual as possible.

  • The team itself is populated by healthcare professionals, including doctors, nurses, and counselors. Many carry a variety of credentials and certifications that indicate their expertise in rehabilitation, life care strategies, and medical coding, as examples. Some are also lawyers and bring that dual perspective to the review.
  • Their medical evaluation tools are extensive and include the International Classification of Diseases (ICD)-9 and -10, and the practice guides for Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding Systems (HCPCS).
  • They also look to current research and industry best practice standards to understand the nature of the injury, the claimant's characteristics, and the medical intervention options that offer the best opportunity for a full recovery. These tools are comprehensive in their oversight of healthcare practices:
    • Milliman - This resource connects diagnoses with procedural codes and helps to identify the proper code for the particular medical procedure. It is also used as a resource to determine evidence-based medicine guidelines.
    • MediRegs - This resource provides pricing and payment guidelines while connecting the actual services to their corresponding CPT codes.
    • PubMed - This source is a portal to over 22 million biomedical and scientific citations and offers the opportunity to find researched evidence needed to prove the appropriateness of medical protocols.
    • MicroMedex/DrugDEX - Pharmaceuticals are usually included in the MSA treatment plan. This resource provides informative guidance on the Federal Drug Administration (FDA) indications for prescription drugs, including for their off-label use.
    • Stat!Ref - This tool is a secondary resource to the DrugDex, and also includes a medical dictionary, evidence-based medicine references, and information on clinical conditions.
    • Red Book - This resource indexes and compiles the Average Wholesale Prices for prescription drugs to use in MSA proposal calculations.
  • They are also well-versed in physiology, anatomy, pharmacology, clinical standards and practices, healthcare privacy regulations, and WC guidelines and pricing practices.

 

The MSA Proposal Review

After the relevant medical and legal elements are clarified, the WCRC then reviews them to determine whether the MSA values suggested are appropriate in this circumstance. This review also looks for other factors that might influence their final valuation estimate. Questions they might ask include:

  •  Whether the injured party suffered from pre-existing injuries that might affect the resolution of this injury. Recovering from a job-related knee injury might take longer if the knee was already compromised when the damage occurred.
  • Whether the claimant has other conditions (not caused by the injury) that might slow the recovery period or hamper the efficacy of the recommended medication or treatment protocols.
  • Clarification of the identities of the treating physicians. In many cases, the injuries require treatment by a series of professionals; CMS looks to ensure that the treatment plan was prepared and overseen by the treating provider.
  • Whether the pricing standards used in the proposal are appropriate for that region.

The WCRC team also reviews the details of treatment and therapy already received as an indicator of the level of treatment that may be needed in the future. This review includes not just doctor visits and lab tests but also pharmaceutical recommendations and allocations, specialist inputs, and any other factors that might influence the claimant's recovery period and the cost of future medical care. At any time in the review process, the team can send the proposal back, requesting more information or corrections for information previously submitted.

 

Getting to Approval

The WCRC team looks at all this documentation to determine whether the proposed future treatment costs - medical, pharmaceutical, and therapeutic - are acceptable, given the parameters and protocols required by CMS and MSA rules. When they conclude the review, they submit a recommendation to CMS about accepting the proposal and whether it protects Medicare's interests:

  •  If the team recommends a lump-sum MSA amount within 5% of the claimant's proposal, then that recommendation acts as an approval of the proposal.
  • In a structured resolution, if the recommended initial 'seed' money is within 5% of the proposer's initial deposit, then the recommendation acts as an approval of the proposal.
  • In those cases where the WCRC's recommended value differs by more than 5% from the proposal, then the team can reply with a counter-offer of a higher or lesser amount, with a detailed rationale as to why their number is more appropriate. This counter-offer allows all the parties, including CMS, to negotiate towards a case resolution that protects both the injured person and their future medical coverage and CMS.

 

Developing an MSA proposal requires attention to detail and extensive legal and medical knowledge. The revised Reference Guide provides a roadmap for MSA professionals to craft a comprehensive document that should move quickly through the CMS approval process.

 

 

 

In 2017, when the Center for Medicare and Medicaid Services (CMS) updated its Medicare Set Aside (MSA) Reference Guide, it added a provision that allowed a one-time opportunity to request an ‘amended review' of a conditionally preapproved MSA account. When a case met the required elements of the new rule, claimants and carriers could re-submit their MSA proposal based on evidence of circumstances that came to light after the initial submission was approved. Over the following three years, experience with the amended review process has provided insights into CMS decision-making, as well as illustrated when making such a request is advantageous to each side of an MSA case.

 

Clarifying "Re-review" vs. "Amended Review"

CMS is offering the new amended review opportunity in addition to the already standard 're-review' of an approved MSA agreement.

 

Re-review

The opportunity to request a re-review of an approved MSA has always been part of the MSA process. WCMSA Reference Guide v3.0 §16.1. It applies when there is an 'obvious error' in the calculation of the value or documentation of the MSA case that changes the value of the MSA account, and that the parties discovered the error only after approval of the MSA application. The reviewed submission will correct the mistake(s). In a re-review case, the underlying facts of the case don't change and the corrected file assures CMS of the protection of its interests as a secondary payer within the case.

 

Amended Review

The opportunity for an amended review arises when the facts of the case have changed, and those changes now alter the value of the MSA allocation by at least 10% or $10,000. WCMSA Reference Guide v3.0 §16.2.Parties can only request the review when their Workers’ Compensation case (WC) has not settled but continues in litigation for more than 12 months (one year) and less than 72 months (six years) after approval of the original MSA. (In October 2019, CMS extended the time window for submitting a request from four years (48 months) to the new six-year standard.)

 

The amended approval opportunity aligns the CMS with several state laws that allow for re-opening the WC case in the event relevant health and healthcare care conditions change after that case has closed. While that opportunity provides for changes to the WC case itself, there was no such opportunity available to make consequent changes to the attendant MSA, when such an account was open. With this new CMS provision, plaintiffs and defendants can modify their MSA agreement to reflect the altered facts of the WC case.

 

Possible Outcomes of an Amended Review

The amended review process facilitates two equal goals: to protect CMS from paying for services that are rightly assignable to the primary payer, and to assist in the resolution and closure of long-term legal cases. It reflects the reality that circumstances change over time, and that 'final resolutions' must also often be fluid. The amended review process allows CMS to take into account those relevant MSA case factors that emerged after the MSA proposal was initially approved and that now might materially change its outcome.

 

Protecting CMS

Per the Mandatory Secondary Payer Act (MSP), CMS is liable for the healthcare costs of injured beneficiaries (or soon-to-be beneficiaries) only after all other 'primary' resources are exhausted. In the case of most MSAs, the MSA document itself clearly defines the obligations of a primary health care resource to an injured worker, and settled medical practices provide the guides needed to establish those medical cost parameters. CMS can sign off on the MSA proposal because it is assured that the primary payers are accepting and will follow through with their obligation to cover the short-, mid-, and long-term costs of the specific injury.

 

In those cases that suggest an amendment is in order, the circumstances of the case will have changed, and CMS is no longer confident that it will not be asked in the future to cover costs arising from the work-place injury. In these cases, the total value of the MSA may need adjustment for one of two reasons if or when the claimant's health care needs change:

    • If medical coverage for the job-based injury needs extending beyond the established timeframe, then the MSA should be amended to reflect that reality. Here, it would be appropriate to change the MSA to reflect the primary payer's obligation to increase the account funds to accommodate the extended extra care costs.
    • If the claimant recovers faster than expected, or medical treatments have come available that reduce the time or cost of medical coverage, then the MSA value should be adjusted to reduce the primary payer's obligation. In this case, CMS must have full notification of changes in the claimant's condition. Without a complete file reflecting the actual conclusion of the WC case, CMS can't know how or when the WC case actually resolved, both physically and financially. Consequently, the claimant could face coverage challenges or denials when filing for future Medicare benefits if their new injury or condition resembles their previous injury status.

 

Protecting Case Participants

A qualifying factor for filing an amended review request is that the case hasn't settled. In many, and perhaps most of these cases, that failure is caused by disputes related to the type and value of future medical care and costs.

  • Plaintiffs are looking for the highest settlement value possible to ensure they have the resources necessary to achieve a complete recovery from their injuries. Their body may not be responding as quickly as expected to their treatment plan, or perhaps the original treatment plan hasn't been effective. They may have other health concerns that exacerbate their injured status, making it harder for them to recover within a 'standard-for-the-injury' time frame. In these cases, it's imperative for their health that they can access the treatments they need to recover from an injury they suffered at work.
  • Defendants (employers, insurers, etc.), on the other hand, are looking to keep long-term costs down to protect their corporate resources as much as possible. An MSA can account for hundreds of thousands of dollars, and these parties are looking to limit that value in the final settlement agreement. These companies have an obligation to their workers and shareholders to seek an MSA modification when changes in healthcare or the insured's health can redirect some of those dollars back to corporate use.

 

Proving an Amended Review Claim

Not surprisingly, convincing the CMS to change an already approved MSA requires substantial and credible evidence that the change is warranted. The Agency looks for 'best evidence' - those documents and records that come from an original source and that are clearly and directly related to injury care. Further, those records must prove that the initial MSA value is now off by 10% or $10,000, whichever is greater. The injured worker must prove that current circumstances justify an increased MSA value by at least 10% or $10,000; the employer/insurer must prove that current medical interventions can reduce the actual cost of care (as opposed to the approved funds set aside) for the injury by at least 10% or $10,000.

 

The Agency is also specific about what types of evidence can prove the adjusted claim and how to document that evidence properly:

  • The amended proposal must include line items that were also included in the first proposal and that identify the care services already provided to the injured worker. Documents that reference those services must accompany the amended proposal.
  • The amended proposal must also demonstrate where services and supports were authorized but were not required.
  • If/when those un-used services were replaced with other comparable services, then there must also be documentation of that fact, including the records of the healthcare professionals who provided or will provide the replacement services.
  • When seeking funding for new or different services or supports, then the proposal must include both a line item detailing that/those new values, as well as documentation that supports the premise that the revised healthcare support is appropriately tied to the injury.

 

A Prescription Drug Caution

Every requested modification of the original MSA must justify how any proposed change relates to the injury and the care and recovery of the injured worker. For prescription drugs, a difference in price in and of itself is not sufficient to justify changing the MSA, although that may be significant when a generic drug becomes available. Instead, the party seeking the change must establish that the revised pharmaceutical request addresses the medication recommendations for the specific injury, and that it meets the standards otherwise set for MSA inclusion:

  • The injured party must have been taking the original medication for two years before filing the amending request;
  • the drug must have been prescribed specifically to treat the work-place injury, and
  • the medication is being used for a medically accepted indication.
  • The revised pricing structure for the medication is presented using Average Wholesale Pricing standards. The Agency uses AWP for setting MSA values for pharmaceuticals, with generic drugs being priced lowest and brand name drugs priced highest. The AWP for most drugs sold in the U.S. is published in drug compendiums (indexes), as is the Wholesale Acquisition Cost (AWC) - the price paid by the wholesaler to the drug manufacturer. It is this cost, plus or minus discounts or further markups by the wholesaler, that establishes the amount estimated for use when determining the allocation in the proposal MSA.

 

Documents supporting these claims include drug prescription and medical treatment payment records dated within six months of the request, the insurer's prescription claim records, and the pharmacy benefits manager records.

 

For amended review requests that seek to reduce or increase the projected value of prescription drugs, parties filing the claim should detail the injured person's experience with the drugs correctly and make a direct connection between the use of the drug and the work-related injury.

 

The amended review opportunity provides an avenue for re-assessment for injured workers and their insurers when the case resolution details of the underlying WC case change. When handled correctly, the amended review action can ensure that injured workers retain the long-term healthcare services they need, or that insurers can recoup the MSA funds that are no longer necessary for future injury care. Considering the speed by which new medical capacities and capabilities are advancing, it’s probable that the amended review process will be pursued more frequently in the years to come.

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.

 

 

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.

 

If Congress passes one or both of two bills presently sitting in congressional committees, then parties to a workers’ compensation (WC) case may finally have a solution to a problem that has plagued that system since its inception. Each of the two proposed bills originates in the separate chambers, and both appear to share a common goal: to articulate for the first time a WC Medicare Set-Aside (MSA) appeal process that can be applied consistently in all jurisdictions to further the pursuit of justice in WC cases. For many in the MSA industry, just getting them into committee is a significant accomplishment.

 

The Right to Appeal

Although not a Constitutional mandate, both federal and state laws provide avenues for review of legal decisions to ensure their compliance with the law and the facts. Specifically, these "appeals" are defined as "a timely resort by an unsuccessful party in a lawsuit or administrative proceeding to an appropriate superior court empowered to review a final decision on the ground that it was based upon an erroneous application of law." Parties who file appeals are unsatisfied with the result of their case because it usually has a direct and negative impact on their property or person.

 

In some bodies of law, an appeal is automatic, and both federal and state laws grant the aggrieved party an absolute right to seek a second opinion about the outcome of their case. In criminal cases, the Constitution provides the appeal directive through both the Due Process and Equal Protection clauses. In civil cases, each state enacts laws that govern when a person or entity has a 'right' to appeal a legal decision, including a decision stemming from a WC case. While each state enacts its own set of WC laws, when Medicare is involved in the case, federal law supersedes state laws.

 

Addressing a Long-term Aggravation

Since the 1980's, when Congress passed the Medicare Secondary Payor Act(MSP), the Centers for Medicare and Medicaid Services (CMS) have been obligated to ensure that no public funding (Medicare or Medicaid funds) is used for health care costs that are rightfully the obligation of a primary payor or insurer. In workers’ compensation cases, the rule requires the primary payor (the insurer, employer or another entity) to cover all health care costs - both past and future - arising from a work-related injury. When settling those cases, plaintiffs can (but aren't required to) seek a review of their long-term healthcare cost proposal by submitting an MSA proposal to the CMS Workers' Compensation Review Contractor (WCRC). If the WCRC determines that the proposal doesn't adequately protect Medicare from future healthcare payment obligations, then it can reject the proposal. However, parties who wish to contest the rejection have no automatic right to appeal it.

 

Currently, there is no language within the MSA statutes that clarifies either the processes or bases required for filing or otherwise addressing an appeal of an MSA proposal denial. Without this language or guidance, both plaintiffs and insurers must pursue the case according to the minimal guidance contained in federal regulations or the law of their state. States do not have consistent laws regarding WCMSAs, so the result of an 'appeal-type' process in one state can be decidedly different than the result in another state, even when the facts and law of the two cases are markedly similar or almost identical. Parties to WC cases in all states have consistently vented their frustration caused by the lack of consistent management of a standard federal appeals process in the differing jurisdictions.

 

CMS-MSA  Procedures in Absence of a Right to Appeal

Currently, the federal rules governing resolution of WC cases that involve Medicare set-asides do not establish an automatic right to an appeal of a CMS decision, nor is there an established procedure to follow when an appeal is desired. Consequently, the responses to an appeal request by parties seeking a second opinion in a WCMSA case will differ based on the location of the case and the subjective opinion of the agency issuing the decision.

 

CMS does, however, offer avenues for review or re-reviewof the disputed decision that may or may not result in having the request for review granted, and which may or may not result in a better outcome of the case for the appellant:

  1. The disgruntled party can submit additional documentation demonstrating why their initial proposed value is more appropriate than that set by the agency. If the new evidence is accepted, then the case can safely settle with that value established. Sometimes, parties may settle the case using the original value even if CMS doesn’t accept it. In these cases, Medicare will withhold its contributions to the settlement until the primary payor’s contribution is exhausted and then deny the subsequent claim. The claimant can then follow the appeal process set out for denials.
  2. Other reasons for requesting a re-review include:
    1. Mathematical errors or other obvious mistakes contained within the CMS response; or
    2. Missing documentation that was left out of the original submission inadvertently.

 

Otherwise, CMS will accept requests for an ‘amended review’ when the following conditions are met:

  • CMS issued an approved (or conditionally approved) amount between 12 and 48 months prior to the disputed determination;
  • The case is still open, and
  • Changes in future needs for care require additional funds of 10 percent or $10,000 over the approved amount (whichever is greater).

When approved, re-reviewed amounts take effect on the date of the settlement.

 

Not surprisingly, many participants in the MSA sector are frustrated by the current CMS 'appeal procedures' because of their unwieldy nature and inconsistent application. Consequently, the industry as a whole has been pressuring Congress to change the current processes to make them fairer and more predictable for workers, their employers, and their insurers.

 

Two Bills May Fix the Problem

This summer, both the U.S. Senate and the U.S. House introduced separate but similar bills to fix the WCMSA appeals gap:

 

Senate Bill 3079

In mid-June, the Senate introduced Senate Bill 3079, designed after an earlier bill proposed in 2014 to accomplish the same goal. In addition to establishing a formal appeal process for MSA reviews, SB 3079 also seeks to "establish the adequacy and application" of the disparate state provisions and fee schedules for MSAs that now confound those proceedings across the country.

 

Among other provisions (see HB 619, below), the bill proposes a three-tiered approach to contest a disputed Determination for prospective appellants:

  • Seek Reconsideration of the Determination from the CMS;
  • If not satisfied, then consider requesting a hearing before an Administrative Law Judge, and finally,
  • Seek a formal Judicial review.

 

On its face, the Bill would establish a guaranteed option to request a reconsideration, whereas currently, that opportunity is only granted at the discretion of the agency. And the three tiers of review offer more opportunities for appellants to argue their case for reversal of perceived injustices.

 

House Bill 6619

In Mid-July, the House introduced House Bill 6619, which appears to echo much of the Senate version in terms of proposed solutions to current MSA problems:

  • It, too, provides a formal process for appealing an unsatisfactory Determination.
  • It creates the criteria to establish the amount to be set aside for future care. This provision preempts CMS's opportunity to reject a settlement because it disagrees with the proposed MSA amount.
  • HB 6619 mandates that all Medicare contractors recognize the provisions of their state's workers’ compensation laws. Each state manages its workers’ compensation cases differently and not all Medicare contractors recognize all of those disparate state rules.
  • Finally but not inconsequentially, the Bill adds an option for workers to make a direct payment to CMS for the value of their future care.

 

Both bills are only beginning their trek through the legislative process and are now in front of committees, the Senate Finance Committee for SB 3079, and both the Energy and Commerce and Ways and Means committees for HB 6619. When or if they'll move forward is up to the Chairs of those respective committees. Consequently, when the MSA industry might gain critical structure around its settlement and appeals processes is also up to those Chairs, as well as the subsequent actions of both houses of the U.S. Congress. Despite potentially lengthy delays in getting either or both bills pushed through the process and into law, participants throughout the MSA industry are gratified that at least that process has begun and hope that, this time, it is successful.

The Mandatory Second Payer Act (MSP) prohibits the Centers for Medicare and Medicaid Services (CMS or Medicare) from making injury-related payments for Medicare beneficiaries if there's another carrier or provider with a primary obligation to do so. When working to settle an injury claim by a Medicare beneficiary, the parties to the case must take CMS's 'interests' in the case into account and establish a Medicare set-aside account (MSA) that covers current and future medical costs so CMS doesn't have to step in in the future on behalf of its insured.

 

Until recently, parties were strongly recommended to have their MSA proposals reviewed by CMS prior to settlement to ensure that the agreement does, indeed, protect CMS. A newly revised Nebraska statute, however, now gives parties the right to declare upon submission of the proposed deal to CMS that, by its included terms, it protects CMS. By doing so, these parties will avoid the scrutiny previously required by the preceding rule, as well as speed up the resolution process.

 

The question that arises from NE's action: how do parties to the case demonstrate conclusively that their agreement conforms to the MSP? While the new statute suggests that simply wording the document correctly should suffice, review of the CMS criteria for determining its ‘interests’ indicates that there is much to consider when asserting that an NE agreement meets the requirements of the federal statute.

 

Protecting CMS's Interests

Not all worker's compensation cases (WC) will require a submission; the federal agency has identified two instances (thresholds) of factsthat indicate that an submission is an appropriate element of case resolution:

  • When the injured is a Medicare beneficiary AND the settlement value is or is greater than $25,000, or
  • The injured person will become Medicare eligible within 30 months of the settlement, and the value of the settlement is $250,000 or more.

Unless a case has one or the other of these circumstances, it will not trigger the need for submission of an MSA proposal for resolution. Those cases that do trigger the threshold, then, must provide information that the parties have taken the interest of CMS into account as they resolved the long-term funding issue. They must determine and assert that the long-term costs of treating the injury are covered so that CMS isn't required to provide additional healthcare funding for it in the future.

 

By its wording, the NE statute allows presumptive approval of MSA proposals that include:

When the proposal includes these terms, then the NE WC Court will ... "presume that the parties' agreement ... conforms to the compensation schedule and [is] for the best interests of the employee ... under all circumstances."

 

So, What, Exactly, ARE the Interests of CMS in the WCMSA Situation?

While the NE statute is silent, CMS itself outlines the criteria of the WC injury or illness that require consideration of its interests in an MSA proposal, and review of those elements both provides insights and raises concerns about future assertions of 'CMS consideration' in the MSA proposal:

 

  • The date of Medicare entitlement - when the injured worker became or will become eligible for benefits.
  • The basis for the Medicare entitlement - is the injured person eligible by age or did the injury or illness cause disability or end-stage renal disease?
  • The type and severity of the injury or illness - This criterion requires an overall evaluation of how the injury or illness has impacted the worker. Diagnosis codes are expected, as they connect the injury to the corresponding Medicare healthcare code. CMS is also interested in whether a full or partial recovery is expected; whether the injuries resulted in permanent or temporary conditions such as paralysis, and whether the illness or injuries might cause further health deterioration.
  • Whether the injury is expected to shorten the claimant's lifespan.
  • The claimant's WC classification regarding full or partial disability, and the percentage of that disability.
  • Any previous conditional Medicare payments made that should be recovered, including those that were not covered by the WC carrier.
  • The amount of the proposed gross payment and how it addresses income replacement, loss of function, and/or medical benefits.
  • Whether the settlement value addresses the rest of the claimant's life or just a specific period of recovery. If the proposed settlement does not contemplate lifetime coverage, CMS wants to know its anticipated term and the basis for that determination.
  • The circumstances of the claimant's current living situation and whether that requires extra coverage expenses. CMS is looking for the identity of the payor if the Claimant is receiving or will receive skilled nursing care at home or in a facility as a result of the injury.
  • Whether the expected costs for Medicare-covered services are appropriate considering the claimant's existing and future condition. For this criterion, CMS wants to know if the proposal contemplates all possible consequences of each type of injury. Some injuries often cause related bodily failures that may or may not be foreseeable based on the nature of the injury itself; when foreseeable, the care for those injuries should be covered by the proposed settlement. Additionally, CMS encourages claimants and other parties to consider the cost schedules set out in Medicare Parts A and B for disabled people as a parameter for estimated the anticipated costs of these injuries or illnesses.

 

One Statute Does Not Preclude the Other

A simple reading of the NE statute might suggest to some that parties to the WC case need no longer contemplate the full scope of CMS’s interests in a WCMSA case when crafting a proposal that will be presumptively approved. However, there is nothing in either state or federal law that asserts that complying with CMS’s ‘interest criteria’ is no longer necessary as a consequence of the passage of the Nebraska statute. Further, CMS and its recovery agencies are constantly on the lookout for cases where the federal carrier pays more than its share of an injured person’s healthcare costs and will pursue those costs as necessary. It is not known if NE’s revised law will invite more such CMS investigations in the future.

 

Consequently, as a suggested best practice in Nebraska, claimants and other WC case parties would be wise to generate a statement of facts that respond to the CMS Interests Criteria before submitting their proposal for approval. By doing so, they will have the evidence and documentation necessary to prove the appropriateness of their settlement valuation if and when CMS comes calling for that information.

On October 1, 2017, the Centers for Medicare and Medicaid Services (CMS) was scheduled to stop paying for health care services that should, instead, be covered by parties deemed responsible for those damages pursuant to liability and no-fault insurance cases. In early 2017, the agency had announced that Medicare-beneficiary claimants in both liability and no-fault legal cases should consider adding a Medicare Set Aside account term to their settlement negotiations, to ensure adequate protection for Medicare if/when those injuries require long-term care services. At the same time, CMS asserted that it would establish two new processes for Liability Medicare Set-Asides (LMSA's) and No-Fault Medicare Set-Asides (NFMSA's), each of which would trigger use of a new code - N723 for LMSA cases, and N724 for NFMSA's - when the agency rejects requests for payment due to the existence of the alternative payor funding. Now that the October 1 date has passed, what has changed, if anything, in the MSA administration world, as it relates to LMSA's and NFMSA's? Let's just say it's been a bumpy Autumn.

New Contractor; New Challenges

The addition of LMSA's and NFMSA's to the already busy CMS reimbursement system has been made more challenging by the September 1, 2017, entry into that system of a new Workers’ Compensation Review Contractor (WCRC), Capital Bridges, LLC. The contract title notwithstanding, the new administrative entity will be responsible for managing all of the LMSA and NFMSA cases, as well as the Workers’ Compensation cases already on its agenda.

Under optimal circumstances, a new contractor in such a complex field will face many challenges with which it may have little or no experience. In this case, unexpected events have delayed the commencement of the contract, which has delayed any forward movement on the LMSA and NFMSA front as well:

  • Shortly after CMS awarded the WCRC contract, two other corporate candidates filed protests with CMS about that appointment. Arch Systems Inc. and KEN Consulting, Inc. each filed a complaint with CMS protesting the award to Capitol Bridge, which caused a stop-work order preventing Capitol from beginning work. It was only this past week, on December 13, that the General Accounting Office (GAO) denied the protests, thereby allowing Capitol to (finally) get to work on its reviews of the Workers Compensation cases.
  • Despite promises contained within a September 19, 2017, article to offer guidance and support for LMSA and NFMSA claimants, on October 3, 2017, CMS rescinded those comments. The September 19 article addressed how health care providers should manage those cases where their patients have a WCMSA, LMSA, or NFMSA. Despite the gap, CMS has not offered any guidance on the subject after the October 3 date.
  • Further, despite its promises to provide more comprehensive instructions for LMSAs and NFMSAs, as well as its assertion that it will stop paying for care in cases that should have an LMSA or NFMSA, the agency remains quiet about the processes or structure of its potential LMSA and NFMSA policies, leaving claimants, insurers, employers, and settlement agencies in the dark about their next steps.

 

Prognosticating the Future

So, as Winter 2017 begins, we still don't know what CMS is going to do about the management of LMSA's or NFMSA's. It appears likely that the agency will include both liability and no-fault carriers as alternative payors and reject claims for which those entities have the obligation to pay for healthcare services. It also appears likely that the new WCRC will be the entity that that reviews proposed LMSA's and NFMSA's, although the processes to get the case in front of it aren't yet known. Not surprisingly, our clients are understandably nervous about what the incoming changes at CMS and in the MSA system will mean for them moving forward.

So, here at CompEx MSA, we have determined that our best practices and next steps will be to ensure that our clients continue to receive the best possible service for all their MSA needs. In addition to keeping our clients and customers informed about the ongoing drama at the CMS, we will also continue to evolve our practices to conform to industry changes:

  • Since WCMSA's are voluntary, we believe that LMSA's and NFMSA's will also be voluntary. Therefore, we will apply WCMSA best practice protocols to incoming cases with an LMSA or NFMSA potential.
  • As each case comes in, it will be vetted for CMS interests that might trigger the possibility of the development of an MSA, regardless of whether it is a worker’s compensation, liability, or no-fault case.
  • As always, we will complete an exhaustive medical-legal evaluation of each claim, adding now the possible ramifications of the varying legal obligations that might arise in each party to the case, including insurance policy limits, negligence rules, and applicable statutory and case law.
  • When necessary or appropriate, we will also evaluate liability or no-fault cases to identify next steps in cases of insufficient funds on the part of the liable parties.

CompEx MSA is Here to Help

As one of Florida's certified minority-owned businesses, CompEx MSA is proud of its reputation for providing high-quality MSA services to both state- and nationally-based customers. We value all our clients equally and are looking forward to serving their MSA needs in future workers’ compensation, liability, or no-fault cases, regardless of how CMS elects to move forward with those processes.

There is a new Worker's Compensation Recovery Center WCRC contractor in place as of September 1, 2017. The new contractor is Capital Bridge LLC, headquartered in Arlington VA., which replaces Provider Resources Inc. (PRI). The contract award is notable for several reasons:

  • It comes two months later than its announced date. Since early July, all parties to Medicare Set-Aside agreements have been waiting to learn whether the CMS would reaffirm PRI, of Erie Pennsylvania, as the continuing WCRC contractor. PRI has held the contract since 2011 and is responsible for speeding review and turnaround times as well as implementing an improved approach to re-review considerations and development letters. The announcement reveals that the CMS awarded the contract to Capital Bridge LLC. instead of PRI.
  • Part of the delay in announcing the award is believed to be because PRI needed the time to complete the reviews it still had open. Allegedly, those claims are now complete, and Capital Bridge began taking in new claims as of September 1.
  • Additionally, the new contract comes with a much larger dollar amount. The previous contracted dollar amount was $5,124,084, while the new dollar amount totals $60,759,236. Although there were no details given in reference the enhanced dollar value of the contract, many industry insiders believe the agency is preparing to cover the MSA costs for more liability and non-group health-related MSA claims in addition to workers compensation MSA claims.

Potential Impacts of the New Contractor

Slow Turnaround Times?

New contractors must often go through a learning curve as they come up to speed on contract terms, exceptions and other anomalies related to the MSA process. That learning curve can slow down the review process, at least for a short period. PRI had reduced the MSA review turnaround time to an average of 14 days, which allowed insurers, injured workers, and other MSA agencies to move forward quickly with the settlement of the worker's compensation claim.

This new contractor may take more time to come up to speed with current practices, so parties with existing or newly filed cases may experience longer delays. Additionally, the recently issued new reference guide, which became effective as of July 21, 2017 instituted new re-review practices, now titled Amended Reviews, which some parties to MSA's may not yet have mastered. How MSA review and management processes will roll out under the new contractor remains to be seen.

In Other News …

Recovering from Other Responsible Entities

In other CMS news, the agency is reporting recovery of over $100 M in net collections for the Medicare program for its fiscal year 2015-2016. The amount represents monies paid by Medicare to medical providers when there was another responsible payer available. That sum was only a part of the over $240 M that Medicare paid but which should have been covered by another responsible payor. The agency continues to work to collect the balance of those 2015-2016 accounts.

 

CMS has an obligation to taxpayers to collect back funds paid to providers before the worker's compensation case settles and liability for the payments is established in another insurer or entity. In the 2013-2014 fiscal year, the agency collected a net of $59 M, but in the 2014-2015 fiscal year, it collected substantially more, a net $150 M. The bump up between the 2013 and 2014 fiscal years is attributed to the increase in collections from non-group payers, an payer category only recently opened for review by CMS.

The drop in collections from 2015 to 2016, however, is attributed to more group health payers stepping up and assuming their obligations before the agency is compelled to pursue those claims, a trend that the industry hopes will continue. As every industry participant works to achieve peak efficiency, some are reaching out to CMS to identify Medicare patients earlier in the claims process. By doing so, they can resolve the Medicare aspect of the case earlier and move the case faster to eventual resolution.

For the first time, parties involved in a Workers' Compensation Medicare Set-Aside (WCMSA) can request a re-review of the MSA value when they dispute the CMS determination or when the financial circumstances of medical care vary from the approved MSA amount by ten percent or $10,000. In the past, insurers, corporations, and injured persons had only one opportunity to seek a re-review of the CMS MSA value determination by submitting a re-review request to the CMS Regional Office (RO) at the time of the settlement. If they remained unsatisfied with the CMS decision after that process, there was no other opportunity to seek an adjustment of what CMS determined to be the appropriate value of their MSA amount. For insurers and self-insured corporations, no further review meant they remained on the hook for the additional costs of care for work-related injuries, even when those costs were appropriately assignable to the MSA.

The newly released “re-review” opportunity, now titled an “Amended Review” allows all MSA constituents a new opportunity in which to argue that the costs of care for these injuries should shift to the MSA. The revised WCMSA Portal User Guide, version 5.1, released July 10, 2017, includes an "Amended Review” section at §12.4.3 that sets out the procedure and grounds for making an Amended Review request.

 

Two Reasons for an Amended Review

As of July 2017, WC case participants can seek an Amended Review if they disagree with the RO decision on the original settlement value, or if the projected cost of care has changed so significantly that the new proposed settlement amount totals more than ten percent or $10,000 from the original CMS approved amount. Only cases that have an approved status with the RO and have no other existing re-review requests pending can seek an Amended Review of the MSA value.

  • Disagreeing with the original MSA value determination

It is not unusual for the professionals involved in MSA cases to offer differing values for the claim. Both the insurance company or corporation and the CMS are obligated to keep their costs as low as possible, which means they must look for ways to reduce current and future costs of care for injured workers. Consequently, sometimes the net value of the MSA determination is insufficient to properly manage their injury or its long-term health consequences.

The new rules authorizing further review of a disputed MSA value allow MSA parties to submit additional information about the case and the projected costs of care to be considered within the original settlement discussions. Although how this actually affects MSA negotiations and agreements remains to be seen, the opportunity to seek another opinion about the future cost of care is most likely a boon to all involved.

  • Requesting a Revised (Amended) MSA Value

The option to review an existing MSA value is new to the CMS and arises from cases where the work-related injury worsens over time, requiring additional, unforeseen medical care costs. While many states permit reopening of WC cases if there is medical evidence that the injury has gotten significantly worse over time, those laws refer only to the original WC claim with the insurance company, and not to the resolution of the claim with CMS. Until this WCMSA Portal User Guide revision, MSA beneficiaries or their insurers had no opportunity to adjust the MSA value to reflect the long-term reality of the WC-related injuries.

 

Limitations on the Amended Review Process

Appropriately, the new WCMSA rules establish parameters that limit the timing and circumstances of Amended Review requests:

  • Submission of the original MSA settlement must have occurred between one and four years before the Amended Review request. For example, if the original MSA settlement date is July 1, 2015, then the period for requesting an Amended Review of its terms runs from July 1, 2016, through June 30, 2019.
  • An existing open Amended Review request prohibits a subsequent request.
  • The requested MSA value adjustment must be either (whichever is greater) ten percent more than the existing value or add at least $10,000 to the existing value. Medical and legal documents are required to prove the validity of the requested amount.

 

Workplace injuries impair both the life and future of injured workers and businesses and insurance companies work hard to be sure injured workers are well cared for through the term of the injury. MSA accounts are designed to cover the future medical costs of those injuries. The Amended Review process gives injured workers and those who support them the opportunity to seek an adjustment to the MSA account when its value doesn't meet the needs of the medical case.

For more information about establishing or maintaining a Worker's Compensation MSA, contact CompEx MSA today.

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