New Commercial Repayment Center (CRC) Contractor: 1/9/2018

Medicare awarded Performant Financial Corporation the contract to operate the CRC beginning 1/9/2018. The CRC works on behalf of Medicare where Ongoing Responsibility for Medical (ORM) has been reported. A carrier or self-insured may be required under the federal law to report to Medicare that it has accepted and/or terminated responsibility for certain diagnosis associated with a workers’ compensation or liability claim, called ORM reporting. The CRC may seek recovery for payments made by Medicare against the carrier or self-insured using this information.

Performant Financial Corporation is already a Medicare Recovery Audit Contractor (RAC) and has sought collection of outstanding conditional payment debts on behalf of the U.S. Treasury.  In light of these circumstances, we are hopeful for a smoother transition from 2015 when CGI Federal began its operations of the CRC. However, we are anticipating an increase in the number of collection letters issued by the CRC for 2018 and are prepared for such a rise in collection efforts.

CRC should not be confused with the Benefits Coordination and Recovery Center (BCRC) who generally collects against claimants based upon reporting of Total Payment of Obligation to Claimant (TPOC).  TPOCs are usually settlements reported to Medicare. If BCRC seeks collection against the claimant based upon TPOC reporting and payment is not made within 60 days, the federal regulations allow BCRC to seek reimbursement from the carrier or self-insured making the TPOC payment.

We will keep you advised on the transition as more information is available.

The Quest for CMS Guidance on Liability MSAs Continues

The quest for CMS guidance on liability MSAs continues. It was most recently addressed in the Silva v Burwell, 2017 U S Dist LEXIS 195032 ( November 28, 2017) case that was considered by the US District Court for the District of New Mexico.

By way of background, this case arose from a December 2015 medical malpractice settlement agreement between Mr. Silva and the Hospital Defendants. The settlement was intended to compensate Mr. Silva for his traumatic brain injury that resulted from a 2011 medical malpractice incident. Since Medicare had made conditional payments prior to the settlement, the Hospital Defendants wanted Mr. Silva to create a Medicare Set-Aside to cover future medical expenses. They were concerned that CMS would come after the hospitals for future medical expenses that would have been paid by Medicare. Given this concern and Mr. Silva’s reluctance to establish an MSA, the Hospital Defendants wanted Mr. Silva to secure a federal court order finding that no federal law or CMS regulation required the creation of an MSA from the personal injury settlement before the settlement funds were released.

Although Mr. Silva asked CMS to state its position on this, CMS did not respond. The Plaintiff Silva then brought this action under the Declaratory Judgment Act against Defendants Burwell, the Secretary of the US Department of Health and Human Services, CMS and the US Department of Health and Human Services seeking to secure a declaration that no MSA is required. Defendants Burwell et al. filed a Motion to Dismiss arguing that the Court lacked subject matter jurisdiction. The Court agreed and granted the Motion to Dismiss.

In dismissing the declaratory judgment action, the Court reviewed the Medicare Secondary Payer Act and MSAs. It noted that although CMS promulgated regulations “requiring” the creation of MSA accounts in workers’ compensation cases and provided a process for review, Medicare had not established a similar process for liability cases. The Court then looked to see if Plaintiff Silva had standing to bring the action before it. In analyzing the Protocols, LLC v Leavitt, 549 F.3d 1294 (10th Cir.2008) criteria for standing, the Court found that Plaintiff Silva had failed to show that CMS had taken a position contrary to Plaintiff Silva’s interpretation of the MSP obligations. The Court noted that although the Hospital Defendants wanted reassurance and confirmation from CMS on the need to establish a liability MSA in this settlement, there is no federal law or regulation that requires CMS to provide this information. Furthermore, the Court noted that the Defendants Burwell et al. had not taken any action to indicate that they interpret the MSP as requiring MSAs in non-workers’ compensation claims. It also observed that the uncertainty created by CMS’ failure to clarify its position on this was detrimental to the settlement process. Since Plaintiff Silva did not have standing to bring this action, the case was dismissed for lack of subject matter jurisdiction.

The Court’s decision fails to appreciate that the MSA is merely a settlement tool intended to prevent a future conditional payment by Medicare. The establishment of an MSA is not “required” by the MSP or supporting Regulations and is a legal fiction. Medicare’s status under the MSP as a secondary payer when a primary payer is available however may make funding an MSA in connection with a settlement a prudent course of action. Since the MSP Act specifically identifies liability plans as a primary plan when “ payment has been made or can reasonably be expected to be made,” Medicare is a secondary payer in these cases as well.

The Court also erroneously noted that CMS had not taken any action to indicate that they are interpreting the MSP to apply to non-workers’ compensation claims. This fails to consider the statements and Alerts that have been issued by CMS on this topic. Section 111 reporting obligations for liability cases also suggest otherwise.

We will continue to keep you advised of further developments.

NuQuest’s Perseverance Pays Off

Our NuQuest team is always ready to seek a correction of an erroneous CMS determination.  A recent re-review victory is highlighted below.

Claimant filed two separate workers’ compensation claims against one employer that had two different workers’ compensation carriers for two different accident dates. Claimant sought treatment for both claims with the same treating physician. In an effort to separate the liability of the carriers and claimant for each claim, the treating physician noted in his records which medications belong to each claim. NuQuest submitted a WCMSA proposal that excluded a prescription projection based upon the medical records stating that certain prescriptions were being prescribed in relation to the separate claim and additionally, that an IMR determined that the medications were unreasonable and unnecessary. Medicare’s determination included a prescription allocation for the medication prescribed for the separate claim stating that because payments were made for the medications and there were no alternative treatment recommendation, the IMR was insufficient to remove the medications.

A re-review was submitted with the court award for the separate claim and an additional letter from the doctor that predated the WCMSA submission, again identifying which medications belong to each claim. After review, Medicare agreed that a prescription allocation was unnecessary because the medications belonged to a separate claim.

As indicated by this re-review, letters from prescribers will be sufficient to exclude medications from an MSA, in certain circumstances. Parties to a settlement should consider if the treating physician or prescriber will provide a written statement identifying exactly what is related to a claim.  This is good practice regardless of whether a proposed MSA is voluntarily submitted to CMS for review.

CWCI’s Report on Opioids in the WCMSA; where do we go from here?

The California Workers’ Compensation Institute (CWCI) is a private organization of insurers and self-insured employers that use claims data to identify problem areas in the workers’ compensation system and seek solutions for them within the industry. The CWCI recently put out a report entitled “Opioids in Workers’ Compensation Medicare Set-Asides” (WCMSA) based on the results of a study that examined the pharmaceutical component of approximately 8,000 CMS-approved WCMSA arrangements. The arrangements had been approved by CMS between January of 2015 and December of 2016.  NuQuest was one of the four national WCMSA vendors that provided data for this study.

Objectives of the Study

The study objectives included the identification of categories of the most frequent medications in the WCMSA study sample. Data from the CMS reviewed WCMSA arrangements was compared with data from a control group of 71,771 closed permanent disability claims from accident years 2006 through 2009  involving similar injuries without an associated WCMSA. Given the current opioid abuse epidemic, and CMS’ pharmacy projection model, it comes as no surprise that opioids were the most common drug group found in the WCMSAs that were examined. In addition, it is significant to note that the cumulative morphine milligram equivalents (MMEs) in the CMS reviewed WCMSAs were 45 times the amounts used in the control group.   Furthermore, pharmaceuticals accounted for only 17% of total medical dollars paid in the control group, while the pharmaceuticals in the CMS-approved WCMSA arrangements accounted for 47% of the total projected medical allocation.

The study also sought to determine whether CMS’ projection model for opioids aligned with evidence-based medicine guidelines for opioids. The American Pain Society, the American College of Physicians, and the American Academy of Neurology all recommend against the use of opioids for chronic pain since there is no evidence of improved function with the use of opioids for chronic low back pain (which accounted for 39% of the CMS-approved WCMSAs). Medical literature also indicates that individuals who are using benzodiazepines along with opioids are at an even greater risk of death. The CMS-approved WCMSAs, however, showed that 1 in 7 WCMSAs with opioids also included prescription allocations for benzodiazepines, while approximately 5 % of the WCMSAs with opioids had benzodiazepines and muscle relaxants. Although the authors of the study acknowledged that CMS reviewed WCMSAs estimate future injury-related care based on current treatment regimens, they cautioned that CMS’ presumption of the long-term use of opioids at these high levels places claimants at an increased risk of harm. The authors also called for modifications to the WCMSA projection methodology that would treat opioids differently than other medications as a matter of public policy.

So where do we go from here?

As one of the four national vendors that provided data for the CWCI report, NuQuest has been closely monitoring  CMS’ overfunding of determinations over the years. The need to address this resulted in our development of the non-submitted NuShield certified MSA. The certified MSA projects opioids and other care, in accordance with evidence-based medicine guidelines and the claimant’s current treatment regimen. The projections are both medically and legally defensible. In addition to our hold harmless and indemnification agreement that accompanies the NuShield certified MSA, our assistance in the administration of the certified MSA funds prevents premature exhaustion of the funds.

The use of the NuShield certified MSA in California cases and nationwide has resulted in significant pharmaceutical and medical savings. The table below illustrates the difference between the use of our evidence-based medicine pharmaceutical approach in California when compared with the use of CMS’ projection methodology for the same pharmaceuticals.

Rated Age Diagnosis NuShield RX using EBM CMS RX methodology
69 CRPS, pain LE, depression $38,822.00 $77,645.00
70 Status post fracture repair wrist, depression, insomnia, carpal tunnel repair $70,041.00 $181,728
55 Postlaminectomy syndrome, lumbar, cervicalgia, plantar fascitis $173,559.60 $253,303

The CWCI study’s comparison of pharmacy expenditures in its control group with the CMS pharmaceutical projections for a similar class underscores the disconnect between actual usage and CMS’ projection methodology. More information regarding the NuShield certified MSA program is available upon request by contacting Kip Daniels or Barbara Fairchild at or


Join Us on November 7th – Highlights of WCMSA Reference Guide Updates Webinar with Rasa Fumagalli, JD, MSCC

Join us on November 7th, 2017 at 1:00 CST Register here for a webinar that discusses the changes that were made to the updated WCMSA Reference Guide (Version 2.6, July 10, 2017). We will look at the new Amended Review process as well as the expanded state-specific Statute section. CMS’ implementation of the updated Guide will also be discussed.

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.