Confusion, Conjecture and Clarification: The New WCMSA Reference Guide

With the issuance of updated Workers’ Compensation Medicare Set-Aside Reference Guide version 2.9 (Guide), there has some speculation and even confusion as to what is really new and what is an elaboration of old policies and procedures.  Examples listed for off-label drug usage to new bullets added regarding the submission process, all of which begs the question, what is CMS really saying and how is it being interpreted?

One area of confusion surrounds Section 4.2 of the Guide.  This Section now includes an additional bullet point which states as follows:

CMS’ voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality, with respect to obligations for medical care required after a settlement, judgment, award, or other payment occurs. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS’ approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement, judgment, award, or other payment.

There has been some speculation that based upon this new provision, that the only way to protect Medicare’s interest is through the submission process and that CMS submission of a WCMSA is essentially mandatory.  This is simply not the case.  CMS submission is still a very much a voluntary process and this is noted in various parts of the Guide.  In fact, the first sentence of Section 4.2 states that “[s]ubmitting a WCMSA proposed amount is never required.”  What is required is ensuring that Medicare’s interest is “always” protected.

When determining the vehicle to best protect Medicare’s interest there are both submission and non-submission options. The impact of over-inflated WCMSA determinations and potential delays that can thwart settlement are some considerations to address when making this decision.  When utilizing a non-submission option it is important to also assess whether the entity performing this allocation will also “stands behind” it as Medicare purports to do.  In addition, questioning the type of assurances being offered and the duration of the same is also of critical importance when deciding what is best for your case.

Section 8.1 of the Guide entitled “Review Thresholds” now includes examples of protecting Medicare’s interest when submission review thresholds are not met.  Specifically, Section 8.1 provides in pertinent part as follows:

Example 1: A recent retiree aged 67 and eligible for Medicare benefits under Parts A, B, and D files a WC claim against their former employer for the back injury sustained shortly before retirement that requires future medical care. The claim is offered settlement for a total of $17,000.00. However, this retiree will require the use of an anti-inflammatory drug for the balance of their life. The settling parties must consider CMS’ future interests even though the case would not be eligible for review. Failure to do so could leave settling parties subject to future recoveries for payments related to the injury up to the total value of the settlement ($17,000.00).

Example 2: A 47-year-old steelworker breaks their ankle in such a manner that leaves the individual permanently disabled. As a result, the worker should become eligible for Medicare benefits in the next 30 months based upon eligibility for Social Security Disability benefits. The steelworker is offered a total settlement of $225,000.00, inclusive of future care. Again, there is a likely need for no less than pain management for this future beneficiary. The case would be ineligible for review under the non-CMS-beneficiary standard requiring a case total settlement to be greater than $250,000.00 for review. Not establishing some plan for future care places settling parties at risk for recovery from care related to the WC injury up to the full value of the settlement.

CMS has always maintained that Medicare’s interest must be protected even in cases that do not meet the workload review thresholds and failure to meet these thresholds do not provide the parties with any type of “safe harbor.”  These examples expand upon this requirement by illustrating the need for some type of future care plan when there is a claim involving a Medicare beneficiary or someone within thirty (30) months of becoming a beneficiary.  Of note, this Section also does not limit recovery efforts to just one party to the settlement, but, instead, all “settling parties” are “at risk.”

In the event there is not court decision on the merits limiting future medical liability or a treating physician certification evidencing that no future treatment is required, utilizing a Set-Aside allocation in these cases and referencing it in the settlement can help manage or eliminate the risk of future exposure.

CMS has also removed references to policy Memoranda in the new Guide.  Specifically, in Section 1.0, CMS notes that that information in the new Guide was gathered from Memoranda issued by CMS, information on the CMS Website, information provided by the WCRC and WCMSA Operating Rules.  CMS states that the intent of the Guide is to “consolidate and supplant all historical memoranda in a single point of reference.”  CMS also states that reference to these prior documents should be discontinued.

One Memoranda that was specifically deleted from Section 4.1.1 of the Guide entitled Commutation and Compromise is the July 2001 WC RO Memorandum commonly referred to as the Patel Memo.  Although containing the same verbiage as Guide 2.8, Guide 2.9 does not direct parties to the Patel Memo for further explanation on how to address compromise vs. commutation situations when considering the need for a WCMSA.  Despite this fact, there is no specific indication that this deletion will have any specific impact on this determination.  However, we will continue to monitor this should further clarification be provided.

Section 16.0 of the Guide entitled Re-Review also provided additional clarification on what constitutes a mathematical error and what should be submitted in certain re-review disputes.  Specifically, this Section provides as follows:

  • Disagreement surrounding the inclusion or exclusion of specific treatments or medications does not meet the definition of a mathematical error.
  • Re-Review requests based upon failure to properly review already submitted record must include only the specific documentation referenced as a basis for the request.

CMS also noted that in addition to not being able to supplement a re-review, no development requests will be made by CMS requesting additional information.  What is clear from this provision is that parties must ensure that all documentation necessary to support a Re-Review/Amended Review is submitted in the first instance to avoid CMS denials.  This requires a critical review of medical records, court orders, and other documentation to support this change.  Further, this needs to presented to CMS in a clear and concise fashion.

NuQuest’s prior blog addressed changes to Section 9.4.5 and 9.3 regarding Spinal Cord Stimulator pricing which has been consistent with CMS approvals. In addition, our prior blog discussed the impact and continued inclusion of more and more off-label prescription medications in the WCMSA allocation.  As noted in the new example issued by CMS in Section 9.4.6.2 of the Guide involving Lyrica, CMS has clearly broadened what it will rely on to support the inclusion of an off-label medication in the WCMSA.  This shift has caused the cost of some WCMSAs to increase significantly.  Based upon the foregoing, parties need to critically review the use of off-label medications prior to submitting a WCMSA to CMS for review.

Section 18.0 of the Guide entitled CMS Monitoring provides some insight into how CMS identifies claims that should not be paid based upon the existence of a WCMSA.  Specifically, this Section provides in pertinent part as follows:

Additionally, the contractor must ensure that Medicare makes no payments related to the WC injury until the WCMSA has been used up. This is accomplished by placing an electronic marker in CMS’ systems used to pay or deny claims. That marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted.

The use of this marking system highlights the fact that CMS is monitoring the claim until the proper exhaustion of the WCMSA which could take place anytime in the future.  CMS does not limit the denial of payments to a one, two, four, or a ten year period.

Other noteworthy changes in the Guide include the following:

  • In Section 10.5.2 of the Guide, CMS noted that currently Indiana, Iowa, Missouri, New Hampshire, New Jersey and Wisconsin do not use fee schedule pricing. Virginia was deleted from this list.  Failure to use the proper pricing for the state will result in a different MSA allocation.
  • Section 17.3 Use of Account notes that if payments from the WCMSA are used for services that are not Medicare-covered allowable expenses for the WC injury or illness, Medicare will deny injury-related claims “until the WCMSA administer can demonstrate appropriate use equal to the full amount of the WCMSA.”
  • The Development Letter Sample now includes the contact and phone number of the Workers’ Compensation Review Contractor (WCRC) at (833)295-3773 instead of the CMS Regional Office.
  • As of January 5, 2019, CMS has converted to CDC life table for the total population: United States, 2015 when calculating life expectancy for the WCMSA.

NuQuest will continue to provide Medicare Compliance Updates as they become available.  Should you have any questions regarding the above, please do not hesitate to contact the NuQuest Legal Team.

 

NuQuest’s Diligent Monitoring of CMS Determinations Results in a Successful Re-Review and MSA Reduction

Pursuant to Section 9.4.6.1 of the WCMSA Reference Guide, version 2.8, prescription medication pricing is based upon the Average Wholesale Price (AWP) of the drug with generic drugs being priced at the lowest non-repacked AWP rate.  In accordance with WCMSA pricing guidelines, NuQuest submitted a WCMSA utilizing the lowest AWP price for a prescribed generic medication.  CMS thereafter issued an approval letter increasing the price of the medication by approximately $17,000.  After a critical review of the CMS determination by the NuQuest medical team, it was found that CMS did not follow the protocol outlined in Section 9.4.6.1 of the Guide and, instead, priced the generic medication at a much higher rate.  NuQuest thereafter filed a Re-Review outlining the mistake in pricing. CMS agreed with the Re-Review and issued a new approval letter including our original pricing for the medication.

This case not only illustrates the importance of understanding WCMSA guidelines, but also the need to critically review CMS determinations to make sure these guidelines are followed.  Failure to do so can result in increased WCMSA costs and missed opportunities for WCMSA reductions.  NuQuest will continue to advocate for clients throughout the WCMSA process to help ensure CMS protocols are followed.  Should you have any questions or need further information on our MSA services, please contact NuQuest at (866) 858-7161.

CMS Releases Advance Notice of Proposed Rulemaking, June 15, 2012

CMS seeks comment from industry professionals on options being considered for beneficiaries and their representatives to clarify how they can meet their obligations to protect Medicare’s interest in MSP Workers’ Comp or Liability claims. Comments must be submitted to CMS no later than 5 p.m. on August 14.

Click here for more information.

NQBP Launches New Pre-MSA with Drug Regimen Review

NuQuest/Bridge Pointe (NQBP) and myMatrixx have teamed up to maximize MSA savings potential and minimize the risk of prolonged settlement negotiations!

This comprehensive solution identifies and optimizes opportunities to lower costs associated with both medical treatment and pharmacy utilization. The Pre-MSA with Drug Regimen Review (PMDR) combines a medical analysis and Drug Regimen Review to provide a unique and complete clinical evaluation of future injury-related drug and medical costs allowing you to control utilization and costs prior to CMS submission.

Since MSA guidelines, issued in June, 2009, indicated that CMS would independently price future prescription drug costs in Medicare Set-Asides (MSAs)— pharmacy utilization costs have increased significantly causing MSA settlement amounts to double or even triple— making it increasingly difficult to settle claims. 

To minimize the risk of prolonged settlement negotiations and expedite case closures— while mitigating costs— NuQuest/Bridge Pointe has developed a unique approach which allows insurers to gain control of injury-related drug utilization, medical treatment and other high costs associated with a MSA— early in the process. 

NuQuest/Bridge Pointe’s PMDR has realized a proven average savings of 72%— comprised of 84% savings in prescription drugs and 16% savings in medical treatment.