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.