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 [email protected], to discuss alternative options for considering Medicare’s interests.

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