Highlights of Version 2.6 of the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (7/10/17)

CMS released its updated WCMSA Reference Guide on July 31, 2017.  This update provides some significant changes and is intended to “supplant all historical memoranda in a single point of reference.” (Section 1.0) The revisions cover a wide range of areas. Noteworthy changes are discussed below.

Medicare’s Secondary Payer Status

As mentioned in our prior blog, Section 4.1.4 that addresses CMS view of “Hearing on the Merits of a Case” was revised. The revision may impact the information that a party previously submitted to CMS for review in connection with denied or partially disputed condition submissions.  CMS is now seeking “documentation as to why disputed cases settle future medical costs for less than the recommended pricing.” The specific request for this documentation leads to the conclusion that CMS will be independently reviewing the merits of the defenses to determine whether the settlement that is approved after hearing on the merits “adequately” addresses Medicare’s interest.

This exception to Medicare’s willingness to accept the terms of settlement after a hearing on the merits and approval by a state WC judge was noted in prior versions and remains in the current version. It states: “As a result, when a state WC judge or other binding party approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests.”

Post Determination Options

Section 16.0 Re-Review now includes CMS’ Amended Review option that was published in the July 10, 2017 WCMSAP User Guide Version 5.1.  This change allows parties in a case with a prior CMS determination that has not settled to seek an amended review of the future care projections when the current care projections differ by 10% or $10,000.00, whichever is greater, from the projections in the prior CMS determination. According to the WCMSA Reference Guide, the following requirements must be met:

  1. The CMS determination amount was issued at least 12 months ago and no more than 48 months ago from the date of the amended review. Please note this is a bit different that the WCMSAP User Guide that looked to the submission date of the proposal in determining eligibility.
  2. The Amended Review may only be used once.
  3. The change in care must result in either a 10% change or $10,000 .00 difference from the CMS determination. The change cannot be due to the use of a new generic version of a drug.

The WCMSA Reference Guide also provides that if the change in care is due to a state specific requirement, a life care plan showing the recommended care should be added.  Additional details regarding the manner of the submission and supporting documents are outlined in the Guide.

Section 16.1, Required Resubmission added the requirement that parties must do a full file submission when a prior submission has been closed due to inactivity for one year or more from the submission date.

Projecting/Pricing

Section 9.4.4 Medical Review Step 5 now provides clarification on the order of the jurisdictional precedence when it comes to pricing. The order is as follows:

  • When the claimant resides in the state where the claim was filed, the claimant’s zip code is used.
  • When the claimant resides in a different state from the one in which the claim was filed, the employer’s zip code in the filing state is used.
  • When the claimant and employer addresses are in different state from where the claim was filed, the claimant’s attorney’s zip code is used.
  • If the claimant is unrepresented, use the WC carrier’s zip code if their address is in the state where the claim was filed. If the WC carrier is in a different state as well, use the WC carrier’s attorney’s zip code.

Section 9.4.5 Medical Review Guidelines

Spinal Cord Stimulator (SCS) projections were addressed in greater detail. Instead of using a 7 year replacement frequency for all types of SCS, the WCRC will use a 7 year replacement for non-rechargeable devices and a 9 year replacement frequency for rechargeable devices.  Information regarding pricing for SCS surgeries and corresponding CPT codes was also provided and reflects a departure from the WCRC’s use of default pricing for the SCS.

State-Specific Statutes

CMS indicated that state legislated non compensable medical services will be recognized during review.  WC state-specific statutes that address the length or nature of future treatment will be recognized as long as the submitter has demonstrated that Medicare’s interests have been adequately protected.

This section is similar to Section 10.4.2 Future Treatment that addresses the impact of a state law that limits the length of time that WC covers work related conditions. This provision is unchanged and states “In order to protect Medicare’s interest, a WCMSA should be funded based on the life expectancy of the claimant unless state law specifically limits the length of time that WC covers work-related conditions. The key is that both the principal amount that is to be set aside and the anticipated interest that it will earn must be sufficient to provide for the worker’s future treatment and administration fees for the worker’s lifetime.”

The updated Section also addresses the impact of state authorized utilization review board decisions on the review. In those situations, the submitter shall include the alternative treatment plan showing the replacement treatment regimen as outlined by the UR board.  Failure to include these items will result in projections based on the treater’s recommendations.  It is also important to note CMS’ caution that failure to include the required documentation at the time of the original submission will not be a reason for a re-review.

Section 9.4.6.2 Pharmacy Guidelines and Conditions

This section has an interesting change in the discussion of off label drugs.  It now refers to Medicare IOM 100-02 Chapter 15 section 50.4.2- Unlabeled Use of Drug (Rev.1, 10-01-03) B3-2049.3 in the discussion of off label. The IOM notes:  “An unlabeled use of a drug is a use that is not included as an indication on the drug’s label as approved by the FDA. FDA approved drugs used for indications other than what is indicated on the official label may be covered under Medicare if the carrier determines the use to be medically acceptable, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.”

In light of this expanded discussion, it is possible that CMS will now include drugs that were previously considered off label non compendia approved, if the WC carrier paid for the drug.

Submissions/MSA Account Administration

Section 10.5.3 Total Settlement Amount now explains the various components that make up the “Total Settlement Amount.”

Section 19.4 Change of Submitter notes that if there is a change in submitter, CMS requires a written release from services by the original submitter and a new signed Consent to Release form authorizing the new submitter. These must be provided in order to continue the WCMSA review process. Submitter Changes will not be accepted after settlement and would not constitute a reason for a re-review.  The new submitter should secure information from the prior submitter as CMS will not share copies of existing documents with the new submitter.

Section 17.1 Administrators was modified to reflect CMS’ recommendation that settlement recipients consider the use of a professional administration for their funds.

The updated Guide also provided link to MyMedicare.gov, current BCRC contacts and ICD-10 examples in the Sample Cover Letters.

Conclusion

CMS’ expanded amended review process and apparent willingness to defer to state authorized utilization review board decisions and state law limits is commendable. Of concern, however, is CMS’ interest in determining the worthiness of a defense in denied claims that have a court-approved settlement issued after hearing on the merits. In addition, the updated WCMSA Reference Guide’s discussion of off label drugs now raises the question of whether a carrier’s payment for a drug that had previously been viewed by CMS as off label now makes it Medicare covered.  CMS’ actual implementation of these changes will be monitored closely. We will keep you advised.

CMS Makes Changes to Fully and Partially Denied Reviews

Review process for fully and partially denied claims addressed in Version 2.6 of the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide released July 31, 2017.

In the past, CMS generally agreed that no WCMSA was needed in a denied claim that did not have any medical or indemnity payments made in it. For a few months in 2016, CMS departed from this analysis . Development letters were issued seeking the following: information showing an absence of payments by the carrier and /or a Court order issued after hearing on the merits that relieves the carrier of liability or a recommendation from the treating physician that no further injury alleged care is required in the claim. After inquiries by the MSP compliance industry, CMS issued an Alert in October of 2016 acknowledging that changes in their review should not be made without notice to the industry.

The  recent  revision of Section 4.1.4 of the WCMSA Reference Guide Section 4.1.4 entitled “Hearing on the Merits ” provides this notice of change to the industry. The Section now states that “CMS must have documentation as to why disputed cases settle future medical costs for less than the recommended pricing.” Although this Section reiterates CMS’ general willingness to accept the terms of settlement after hearing on the merits, if Medicare’s interests are adequately addressed, it specifically notes that this analysis will also be applied to all denied liability cases, whether in part or in full. Based on this change, we recommend that parties include a letter that explains the legal and factual basis for the disputed settlement in all zero dollar waiver submissions to CMS. Whether CMS will accept the validity of the dispute is questionable.

Since CMS review is voluntary, there are other options for considering Medicare’s interests in disputed claims. The options include the use of a compromise allocation or a certified non-submitted MSA. Please contact our Settlement Consultant team at info@mynuquest.com, to discuss alternative options for considering Medicare’s interests.

The Commercial Repayment Center (CRC) Recognizes California Insurance Guarantee Association v. Sylvia Mathews Burwell, et. al., 2:15CV01113ODW (“CIGA”)

The Commercial Repayment Center (CRC) Recognizes California Insurance Guarantee Association v. Sylvia Mathews Burwell, et. al., 2:15CV01113ODW (“CIGA”):

Recently, NuQuest has received favorable initial determinations and redeterminations that agree certain dates of services should be removed based upon the ruling in CIGA.  The federal district court in CIGA found that Medicare’s practice of requiring reimbursement for dates of services simply because they included a related diagnosis code among other unrelated codes was unlawful.  This decision is further discussed in our previous blog posts:

Medicare’ Conditional Payment Recovery Tactics Challenged by CIGA

Is the Pot Calling the Kettle Black?

What is significant to report is that the CRC has agreed to remove certain dates of services from its statement of reimbursement because recovery was based only upon the date of service listing related diagnosis codes among unrelated codes. This means that if Medicare is seeking reimbursement for a date of service that includes bundled related and unrelated diagnosis codes, the debtor should dispute the charges based upon the CIGA ruling and file its appeal within the required timeframe.

Although evidence to support the removal of the charges may not be required, if the debtor has or can obtain evidence that support: (1) the dates of service did not include treatment related to the claim; or (2) that only a portion of the charges are related, such evidence should be provided to the Medicare contractors. Evidence should be obtained especially if filing a request for reconsideration to a Qualified Independent Contractor. Evidence, among other things, could be: medical records, bills, statements from the providers or claimant that certify the dates of service were for non-claim related treatment.

We will keep you posted on any further developments.

Join Us on July 10th! Proper Administration Webinar

Join us on July 10th, 2017 at 1:00 (CST) Register here for a webinar that addresses the proper administration of an MSA. We will review CMS’ specific guidelines on this issue and address common mistakes that may be made in self-administration. We will also go over tools that may assist in the administration process.

Rasa Fumagalli, JD, MSCC, NuQuest’s Director of Compliance, holds a law degree from IIT’s Chicago Kent College of Law with an undergraduate business degree from the University of Illinois. Prior to joining NuQuest, she spent over twenty years specializing in workers’ compensation defense work in the Chicago area. Rasa utilizes her extensive experience in handling workers’ compensation cases when consulting with clients about Medicare Secondary Payer (MSP) compliance issues. She is admitted to practice law in the State of Illinois and is an active member of the National Alliance for Medicare Set- Aside Professionals (NAMSAP) organization, serving on the Evidence-Based Medicine, Communications and Liability Committees.

Arizona Legislature Repeals Section 23-941.01 limits on closure of future medical in undisputed claims

State workers’ compensation laws define the parameters of an employer’s potential liability in a claim. As such, they play a role in determining the amount of a future Medicare Set-Aside that may be funded in connection with a complete settlement.

Arizona’s legislature recently repealed Section 23-941.01 that limited the parties’ rights to settle out future medical care in undisputed claims.  This provision prohibited the closure of active medical care, such as surgery, in undisputed claims and only allowed the release of future supportive medical maintenance benefits.

The amended Section 23-041.01 provision allows represented employees to settle future medical but requires the settlement to include the following attestations:

  1. “The employee understands the rights settled and released by the agreement and was represented by counsel.
  2. The employee has been provided information from the carrier, special fund or self-insured employer that outlines any reasonable anticipated future medical, surgical and hospital benefits relating to the claim ant the projected cost of those benefits and that provides an explanation of how those projected costs were determined.
  3. The employee understands that monies received for future medical treatment associated with the industrial injury should be set aside to ensure that the costs of such treatment will be paid.
  4. The parties have considered and taken reasonable steps to protect any interests of Medicare, Medicaid, the Indian Health Service and the United States Department of Veterans Affairs, including establishing a Medicare Savings Account if necessary.
  5. The parties have conducted a search for and taken reasonable steps to satisfy any identified medical liens.”

When a claimant is unrepresented, the Administrative Law Judge will meet with the claimant to make specific findings regarding whether the above paragraphs are satisfied. Additional requirements and provisions for handling disputed claims are also set forth in the complete amendment.

The repeal will be effective from and after October 31, 2017. (Title 23, Chapter 6, article 3, Arizona Revised Statutes)