THE WHITTLING AWAY OF CMS OFF-LABEL USAGE ARGUMENTS IN THE WCMSA

With the transition to the new Workers’ Compensation Review Contractor (WCRC), the industry is seeing many changes in the Workers’ Compensation Medicare Set-Aside (WCMSA) review process. One of the biggest changes has been the shift from excluding Lyrica from the WCMSA when it is being prescribed for an off-label use to the inclusion of this medication regardless of usage guidelines.

Pursuant to the Food and Drug Administration, Lyrica is clinically indicated for diabetic peripheral neuropathy, post-herpetic neuralgia, partial onset of seizures, fibromyalgia and neuropathic pain associated with spinal cord injuries. However, Lyrica is highly prescribed in the Workers’ Compensation arena to treat pain complaints associated with industrial injuries.

Effective June 1, 2009, CMS began including Part D covered drugs in WCMSAs even if they were being prescribed for an off-label use.   As a result, many claims were not able to resolve due to the exorbitant price of medications.  However, on May 14, 2010, CMS issued a memorandum stating in pertinent part as follows:

“[C}overed Part D drug” is “a drug that may be dispensed only upon a prescription and that is described in subparagraph (A)(i), (A)(ii), or (A)(iii) . . .” of 42 U.S.C. section 1396r-8(k)(2). 42 U.S.C. Section 1395w-102(e)(1)(A). For a Part D drug to be covered by Medicare, and thus included properly in a WCMSA, the drug should be prescribed for an outpatient use that is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C.A. § 301 et seq.], or supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(I) of 42 U.S.C. Section 1396r-8.”

This off-label exclusion became effective on June 1, 2010, allowing drugs such as Lyrica to be removed from the WCMSA when they were not prescribed for clinical usage as outlined by the Food and Drug Administration and medical drug compendia.  For over 7 years, the Medicare compliance industry, insurers, employers, claimants and counsel have relied on the exclusion of off-label drugs when settling claims and submitting WCMSAs to CMS for review.

However, without notice or warning, CMS has now started including Lyrica in some WCMSAs raising the cost of these allocations by hundreds of thousands of dollars.  As support for this inclusion, CMS has relied on Section 9.4.6.2 of the WCMSA Reference Guide which states in pertinent part as follows:

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 accepted, taking into consideration the major drug compendia, authoritative medical literature and/or accepted standards of medical practice.

CMS is now including Lyrica in the WCMSA when it has been paid for as part of the claim.  This is contrary to its post-2010 submission review policy.  Since 2010, CMS has not considered payment of Lyrica as a basis for inclusion of the medication in the WCMSA.  Even when payment screens evidenced multiple years of payments, CMS would allow the parties to exclude this medication if it was being prescribed for an off-label use.  CMS is now not only scrutinizing prior payments of Lyrica, but is also whittling away at off-label usage arguments for other prescription medications as well.

As a result of this shift, primary payers are once again being faced with the unknown when it comes to CMS submissions and medication costs.  Because CMS allocates medications for the beneficiary’s entire life expectancy without taking into account usage guidelines, inclusion of these medications could once again preclude settlement.

Understanding CMS trends, reducing drug exposure prior to submission of a WCMSA, or utilizing an evidence based non-submission process are some ways to mitigate prescription drug costs.

For questions regarding this article or for further information on NuQuest services, please contact Bridget Smith, JD at  bsmith@mynuquest.com

What’s New in the New WCMSA Reference Guide 2.8

On October 1, 2018, the Centers for Medicare and Medicaid Services (CMS) issued the latest version of the WCMSA Reference Guide, COBR-Q4-2018-v2.8.  The Guide includes updates regarding the discontinuation of Social Security numbers as  a Medicare identifier; a link to the applicable CDC Life Table; and further illustrations for determining the jurisdiction and pricing methods for a WCMSA.

As required by Section 501 of the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act (MACRA) of 2015, CMS is required to discontinue utilizing Social Security Numbers (SSNs) as Medicare identifiers and must distribute new 11-byte Medicare Beneficiary Identifier (MBI) cards to each Medicare beneficiary.  Distribution of these MBI cards began in April 2018.  As noted in the new Reference Guide and prior CMS publications, the distribution must be completed by April 2019. In addition, fields that were formerly labeled as “HICN” have now been relabeled as “Medicare ID. ” CMS noted that it can now can accept either HICN numbers or the new MBI numbers for beneficiary identification.

In prior versions of WCMSA Reference Guide, CMS delineates how to determine the correct jurisdiction for the WCMSA.  The new Reference Guide does not change this analysis and, instead, includes additional illustrations to further clarify this process.  This illustration can be found in Table 9-1 of the Guide.  In addition, in Table 9-2, CMS delineates the appropriate pricing methodology to utilize once the jurisdiction has been determined.  Specifically, CMS notes that for cases filed with the U.S. Department of Labor Office of Workers’ Compensation Programs (OWCP), pricing is based upon the OWCP Fee Schedule; for Longshore Harbor Workers’ Compensation Act settlements, pricing is based upon the Office of Workers’ Compensation Programs fee schedule for the zip code of claimant’s residence, unless actual charges are specified; for jurisdictions with a workers’ compensation fee schedule, the most current version of the fee schedule will be used; and for jurisdictions that do not have fee schedules, pricing is based upon actual charges.

The new WCMSA Reference Guide can be found here at https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Reference-Guide-Version-2_8.pdf

WCMSA Submission Portal Update

CMS has finalized the testing phase of the new WCMSA Submission Portal.  CMS will be announcing a town hall meeting for Nov 29, 2011 to introduce the WCMSA Submission Portal to the general public.   An announcement will be posted on the CMS website: http://www.cms.gov/WorkersCompAgencyServices/12_WCMSAP.asp

As the portal is now open for unlimited submissions for the testers and will be open to the general public in the near future, reviews submitted through the portal will no longer be handled as a priority.  The submissions will be reviewed on a first come basis. 

On another note, the current WCRC will be doing overtime to catch up on the backlog.