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.

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