WORKERS' COMPENSATION
Welcome to our workers’ compensation blog page! Our Synergy experts have extensive experience in assisting with workers’ compensation cases and navigating the complex world of workers’ compensation. Our blogs cover a wide range of topics related to workers’ compensation, including the basics of workers’ compensation, our special advice column “Since You Asked”, and more. We understand the challenges that injured workers face and the importance protecting their compensation for injuries sustained on the job. Our goal is to provide you with the information and resources you need to navigate the issues at settlement with confidence and achieve the best possible outcomes. Check back often for new blog posts and updates!
June 6, 2023
Rasa Fumagalli JD, MSCC, CMSP-F
The Medicare Secondary Payer Act impacts workers’ compensation, liability, and no-fault settlements involving a Medicare beneficiary. This month’s “Since You Asked” column addresses a situation where Medicare incorrectly denies non-injury-related treatment after a workers’ compensation case settles.
Question:
My client settled a workers’ compensation case that involved an injury to the metatarsals of her right foot about six months ago. Since she was on Medicare at the time of the settlement, the workers’ compensation insurance carrier reported the settlement to Medicare. My client is now receiving treatment for a completely unrelated right ankle condition which is being denied by Medicare because of her workers’ compensation settlement. What is going on here?
Answer:
This situation may be due to an issue with Section 111 Mandatory Insurer Reporting that was done by the workers’ compensation insurance carrier’s Responsible Reporting Entity (RRE). Section 111’s Mandatory Insurer Reporting (MIR) provisions generally require workers’ compensation insurers to report all workers’ compensation settlements to Medicare that involve Medicare beneficiaries. This is called a Total Payment Obligation to Claimant (TPOC) report. There is also an obligation to report the assumption of an Ongoing Responsibility for Medical (ORM) when the accident is accepted. This reporting requirement helps Medicare recover improper payments and avoid making inappropriate payments in the future.
When a workers’ compensation insurer reports a settlement to Medicare, the RRE must provide the injury victim’s first name, last name, date of birth, gender, Medicare Beneficiary Identifier (MBI), and Social Security Number (or the last five digits). Additionally, the RRE must report International Classification of Diseases (“ICD”)-10 diagnosis codes for the illnesses/injuries alleged, claimed, or released in the settlement. CMS encourages RREs to supply as many valid ICD-9/ICD-10 Diagnosis Codes as possible for the most accurate coordination of benefits. In your client’s case, the RRE may have reported an overly broad diagnosis code for an injury to the right leg, instead of a specific injury to the metatarsals of the right foot resulting in Medicare’s denial of the post-settlement treatment.
The beneficiary’s medical provider may be able to help address this situation. The February 23, 2021, Medicare Learning Network article (MLN Matters Number: SE21002) advises providers about the appeal process to follow when Medicare denies treatment due to an open or closed Liability, No-Fault, or Workers’ Compensation MSP record on the beneficiary’s Medicare file.[1] When Medicare inappropriately denies a claim because the diagnosis code on the unrelated claim and in the beneficiary’s MSP Section 111 settlement reporting record are the same or similar, the provider should appeal the inappropriately denied claim with the Medicare Administrative Contractors (MACs). The appeal should explain and provide support that shows the services are not related to the injury reported on the MSP record. The article also advises the provider not to bill the Medicare beneficiary for the inappropriately denied claim but to resolve the claims issue with the appropriate MAC.
When faced with this unfortunate situation, we recommend that you reach out to the workers’ compensation insurance carrier to seek assistance in correcting the Section 111 settlement report. The provider should also be able to assist with the inappropriate denial by filing an appeal with the MAC. A proactive approach whereby both parties discuss and agree upon the diagnosis codes to be reported under Section 111 Mandatory Insurer Reporting when settling, generally helps to limit these types of problems post wash out of the claim.
Given these complexities, turn to Synergy Settlement Services team of MSP compliance attorneys to help guide you in the MSP compliance maze.
[1] https://www.cms.gov/files/document/se21002.pdf
February 14, 2023
Rasa Fumagalli, JD, MSCC, CMSP-F
Oftentimes an attorney representing an injured worker may simply scan the defense’s Medicare Set-Aside and assume all the future medical issues have been addressed in the MSA. This month’s “Since You Asked” column addresses the need to understand the projections in a Medicare Set-Aside report and the importance of considering the non-Medicare covered injury-related expenses the injured worker may incur post settlement.
Question:
My client has been receiving workers’ compensation benefits for years. He is now on Medicare and the carrier wants to settle out future medical rights by funding a Workers’ Compensation Medicare Set-Aside (WCMSA). I haven’t seen many WCMSA proposals and am wondering what I should be looking for in the WCMSA. Can you help?
Answer:
In order to evaluate a WCMSA proposal, you first need to identify all of the medical conditions that are related to the industrial accident. Since your file may not necessarily have all the current medical and pharmacy information, it is important to have a discussion with your client about the nature of his ongoing injury-related treatment. A decision may then be made as to the need for obtaining updated medical and pharmacy records.
Once you have identified the injury-related conditions and are aware of the current medical and drug treatment, you should make sure that the WCMSA report correctly identifies the injury-related conditions as accepted conditions. The conditions will also have corresponding ICD-10 diagnosis codes associated with them. It may be beneficial to confirm their accuracy since these codes will likely be used for the Section 111 reporting of the settlement. If a condition was initially accepted, but was then subsequently disputed, the WCMSA report may also reflect this.
The WCMSA medical treatment projections should be reviewed to ensure that they include projections for the recommended future procedures or treatments that are reflected by the last two years of injury-related medical records. If a procedure is missing because it is not covered by Medicare, it may be funded outside of the WCMSA proposal for non-Medicare covered expenses. The drug projections should be scrutinized in the same way. If a drug is missing because it is not covered by Medicare, it should be funded outside of the WCMSA proposal for non-Medicare covered expenses. Since a workers’ compensation carrier’s responsibility for future medical costs in a workers’ compensation case is not limited to treatment that is covered by Medicare, the injury-related non-Medicare treatments should be accounted for in the settlement as well and you should obtain a non-Medicare expense report to detail the expenses that will not be covered for the injured worker as part of the WCMSA. Treatment projections are priced based on the state’s workers’ compensation medical fee schedule. Drugs are priced based on the Average Wholesale Price (AWP) listed in the current Red Book Drug Reference, with generic drugs priced at the lowest non-repackaged AWP.
When parties are discussing a settlement figure that is inclusive of the WCMSA, the injured worker may want to take steps to mitigate the WCMSA projections. For example, a physician’s switch from a brand name drug to a generic version of the drug may result in significant cost savings, thereby leaving more of the settlement funds as unrestricted.
It is also important to consider whether the WCMSA proposal will be submitted to CMS for review. Although CMS review is voluntary, CMS recommends this review in order for Medicare to become the primary payer after proper exhaustion of the CMS-determined WCMSA. The most recent version of the WCMSA Reference Guide (Guide) (Version 3.8, November 14, 2022) includes Section 4.3 that again cautions parties of the risks associated with a non-submitted WCMSA. It states as follows:
“As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS approved WCMSA amount.”
A note was added to this section as well. It states:
“Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.
CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.”
The review of a WCMSA proposal should be more than cursory since it will impact the injured worker’s post settlement medical issues. A detailed analysis of the WCMSA and non-Medicare covered expenses is the gold standard to protect your practice and the injured worker.
Synergy Settlement Services team of MSP compliance attorneys can assist you with this type of analysis and guide you through the MSP compliance process. Don’t ever rely upon the carrier to do the necessary work to protect your client, engage your own MSP compliance experts like Synergy here!
July 21, 2022
Rasa Fumagalli, JD, MSCC, CMSP-F
Netflix’s new baking competition show “Is it Cake” challenges judges to identify which of two identical objects is edible and which is not. Attorneys settling cases involving work-related injuries may find themselves similarly perplexed when it comes to whether a work-related injury will be treated as a workers’ compensation or liability case for purposes of the Medicare Secondary Payer Act (“MSP”). Depending on who the employer is at the time of a work-related injury, some injured employees may be covered by programs that are required under federal law. Depending on the nature of the program, the MSP compliance obligations will either be handled as a workers’ compensation or liability settlement. For example, the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) that provides benefits for work-related injuries sustained by certain maritime and dock workers is viewed as workers’ compensation insurance when it comes to MSP compliance issues. On the other hand, the Federal Employers Liability Act (“FELA”) which provides benefits for railroad employees, who sustain injuries due to the negligence of a railroad carrier, is viewed as liability insurance when it comes to MSP compliance issues. (See MSP Manual, Chapter 1, Section 10.4)
Both liability and workers’ compensation settlements are impacted by the MSP Act. The MSP is comprised of a series of statutory provisions intended to reduce federal health care costs. The MSP provides that if a primary payer exists, Medicare only pays for medical treatment relating to an injury to the extent that the primary payer does not pay. The MSP Act and supporting regulations specifically state that Medicare is precluded from making payments for services “to the extent that payment has been made or can reasonably be expected to be made promptly under any of the following (i) workers’ compensation; (ii)liability insurance; (iii) no-fault insurance. (42 U.S.C.§1395y(b)(2)(A)(ii), 42 C.F.R.§411.20 (a)(2)). A primary payer’s responsibility for payment may be demonstrated by “a judgment, payment conditioned upon the beneficiary’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary payer or the primary payer’s insured or by other means…” (42 C.F. R§411.22(b)). The parties first and foremost should ensure that pre-settlement injury-related payments (conditional payments) made by Medicare are reimbursed to the appropriate Medicare Trust Fund. In addition, and in light of the MSP, settlements that close out future injury-related medical benefits should avoid cost shifting the post-settlement injury-related care onto Medicare.
The MSP compliance distinction between a liability settlement and a workers compensation settlement is an important one since it may impact the way parties address post settlement injury related care. The Centers for Medicare and Medicaid Services (“CMS”) has issued a great deal of guidance when it comes to workers’ compensation settlements that close out future injury related medical. The Workers’ Compensation Medicare Set-Aside Arrangement (“WCMSA”) Reference Guide (“Guide”), Version 3.7, 6/6/2022, explains that parties should take Medicare’s interest, with respect to future medicals, into account by including a WCMSA into the settlement terms. The WCMSA should contain sufficient funds from the settlement to cover the total cost that will be incurred for future injury related Medicare covered treatment. CMS encourages parties to seek CMS approval of the proposed WCMSA when the settlement meets CMS’ internal workload review thresholds. The benefit to CMS’ review and approval of the proposed amount is the certainty in knowing that Medicare will become the primary payer for any injury-related services that exceed the properly exhausted CMS determined WCMSA. Although the Guide also states that CMS approval of a proposed WCMSA amount is not required, Section 4.3 notes that CMS may treat the use of non-CMS approved products as “a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.” Non-CMS approved products are MSA reports that are not submitted to CMS for review.
If CMS concludes that there was an improper cost shift, it may deny payment for injury-related services until it is provided with attestation of appropriate exhaustion equal to the total settlement, less procurement costs and paid conditional payments. The parties may overcome this denial by showing CMS, at the time of the WCMSA exhaustion, that both the initial funding of the MSA was appropriate and the funds were used properly.
To understand the importance of the differences between whether a work injury is treated as workers’ compensation versus liability case in the context of the MSP, consider a FELA settlement. FELA is treated as a liability settlement for purposes of the MSP due to its differences from the typical workers’ compensation case. Although a FELA settlement involves a work-related injury, the railroad employee must show that his/her injuries were, due in whole or in part, to the negligence of the railroad. This burden of proof is different than the burden of proof in a typical workers’ compensation case. In most jurisdictions, for a workers’ compensation case, a worker must only show that he suffered an accidental injury, which arose out of and in the course of his employment. There is no need to show negligence.
Once a settlement agreement is reached in a FELA case, the parties should consider the potential impact of the MSP Act on the settlement. If the railroad employee is a Medicare beneficiary at time of settlement, Medicare will be given notice of the settlement under Section 111’s Mandatory Insurer Reporting obligation. The notice of settlement may result in the potential risk of Medicare denying post-settlement injury-related care. If the railroad employee has completed his injury-related treatment and no further treatment is indicated, the beneficiary may wish to obtain a written certification from the treating physician to that effect. Pursuant to CMS’ 9/30/2011 Memo, there is no need for a liability MSA when the treating physician makes this certification.
If, however, the beneficiary continues to treat for his injuries, or will need future injury-related care, an MSA might be considered to avoid any potential issues with Medicare denying post-settlement injury-related care. While a workers’ compensation settlement will usually fully fund the WCMSA, the liability MSA may at times consider the relative value of each of the elements of damage being compensated in the settlement (pro-rata apportionment). This apportionment approach considers the ratio between the total potential case value and the net settlement. Parties may also choose to fully fund the liability MSA. The decision of how much, or how little, risk to assume when it comes to post-settlement injury-related care is one that should be made by the beneficiary and documented in the attorney’s file.
Conditional payments, payments made by Medicare for injury-related care provided prior to settlement, must also be addressed in connection with a settlement. In a workers’ compensation case, conditional payment recovery is handled by the Commercial Repayment Center (“CRC”). The CRC seeks to pursue recovery directly from the workers’ compensation insurer carrier while the case is open. Once the case settles, the conditional payment recovery will move from the CRC to the Benefits Coordination and Recovery Center (“BCRC”) since the beneficiary is now the identified debtor. Since a FELA settlement is viewed as a liability settlement, the BCRC will handle the conditional payment recovery and seek recovery from the beneficiary debtor. Payments made by a Medicare Advantage Plan (“MAP”) must also be addressed. Information regarding the MAP payments is provided by the relevant insurance carrier themselves and not the BCRC/CRC.
While one work injury case may look just like any other, your MSP compliance approach may depend on whether CMS views the case as liability or workers’ compensation. A thorough understanding of the differences and risks of various approaches is necessary in order to avoid any unexpected consequences of inaction.
Contact Synergy Settlement Services to discuss the way our MSP compliance team may assist you.
March 24, 2022
Rasa Fumagalli JD, MSCC, CMSP-F
The Centers for Medicare and Medicaid Services (CMS) issued Version 3.6 of the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Guide”) on March 15, 2022. It softened the language used in the controversial Section 4.3 of the January 10, 2022 Guide (Version 3.5). This Section addressed CMS’ view of non-submitted Medicare Set-Aside (MSA) proposals and initially provided the following:
As a matter of policy and practice CMS will deny payment for medical services related to the WC injuries or illnesses requiring attestation of appropriate exhaustion equal to the total settlement less procurement costsbefore CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
In an apparent response to the concerns raised by the Medicare Secondary Payer (MSP) compliance industry, CMS issued a revision of this paragraph in Version 3.6 of the Guide. The current section now provides the following:
As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount. (emphasis added)
A note was added to this section as well. It states:
Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.
CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.
Although this revised provision clarifies that Medicare will resume a primary payer status when the parties show that the initial funding of the non-submitted WCMSA was sufficient, and it was properly exhausted, the exact process for proving the sufficiency of the non-submitted WCMSA proposal has not yet been defined. It is also clear that despite the policy effective date of January 11, 2022, CMS will use notice of the non-submitted MSAs to flag the Common Working Files (CWF) to potentially avoid payments up to the total settlement, less procurement costs and paid conditional payments. This flagging of the CWF may result in the development of a process whereby CMS is reviewing the appropriateness of the non-submitted WCMSA. Documentation that supports the reasonableness of the non-submitted WCMSA should be maintained in the event that is questioned by CMS. The note also clarifies that this policy is not intended to affect settlements that do not meet CMS’ internal workload review thresholds as long as Medicare’s interests have been considered in the settlement. It is rather ironic that the non-submitted MSAs that were shared with CMS in order to avoid improper payments may face greater scrutiny than the non-submitted MSAs that were never shared with CMS.
Other revisions in Version 3.6 pertained to Section 9.4.1.1 that discusses the most frequent reasons for development letters and Section 10.2 that discusses e-signatures on Consent to Release documents. The revision to Section 16.1 is significant in that it limits parties to one re-review request per particular error claim. Synergy will continue to keep you advised of MSP compliance changes as they arise.
March 3, 2022
Rasa Fumagalli JD, MSCC, CMSP-F
The Medicare Trust Fund is financially unstable. At this time, the funding for Medicare Part A, which covers hospital costs, is expected to run out by 2026. In light of this bleak picture, it is no surprise that the Centers for Medicare & Medicaid Services (CMS) is taking an even more aggressive stance when it comes to the recovery and prevention of improper payments. Although workers’ compensation settlements that close out future medical rights have always been subject to scrutiny by CMS, CMS is moving forward with further efforts to shore up the financial integrity of the Medicare Trust Fund.
The Proposed Rule regarding “MSP and Future Medicals” (EO 12866) has essentially been on hold since December of 2018. The current version of the proposed rule states that it “would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments.” It would also “remove obsolete regulations.” On March 1, 2022, CMS presented the proposed LMSA rule to the Office of Regulatory Information and Affairs (OIRA). OIRA was also presented with the Final Rule for Medicare Secondary Payer and Certain Civil Money Penalties. Given the delivery of the proposed and final rules to OIRA, we expect to see a version of the rules rolled out over the next several weeks. We will continue to monitor the rules and keep you advised.
To learn more about Synergy and our Workers’ Compensation Services and see how you can leverage Synergy as a valuable partner, click here.
February 28, 2022
Rasa Fumagalli JD, MSCC, CMSP-F
There has been much discussion in the Medicare Secondary Payer (MSP) compliance industry over the addition of Section 4.3 to the revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide Version 3.5 (Guide) that was issued on January 10, 2022 by the Centers for Medicare and Medicaid Services (CMS). This controversial Section addresses CMS’ view of non-submitted Medicare Set-Aside (MSA) proposals. The provision states:
A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.
As a matter of policy and practice CMS will deny payment for medical services related to the WC injuries or illnesses requiring attestation of appropriate exhaustion equal to the total settlement less procurement costsbefore CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
Although CMS has always taken the position that in the absence of a CMS approved and properly exhausted WCMSA, it “may” refuse to pay future injury-related medical expenses until the entire settlement is exhausted, the language used in Section 4.3 is troubling. It is inconsistent with other statements in the Guide as well as the agency’s own regulations (42 C.F.R. § 411.46).
Section 1.0 of the Guide clearly states that “there are no statutory or regulatory provisions requiring that you submit a WCMSA proposal to CMS for review.” Since CMS review of a WCMSA proposal is voluntary, Section 4.3’s language that CMS will deny payment for injury-related medical expenses up to the total settlement amount less procurement costs as a matter of policy and practice is an overreach by CMS. Furthermore, this view creates a presumption that any non-submitted WCMSA is shifting a financial burden to Medicare without providing a method to rebut this presumption. It also overlooks the fact that CMS does not provide for a review of the cases that do not meet CMS’ internal workload review threshold for submissions.
Section 4.3 also points to 42 C.F.R. § 411.46 as general support for CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. This reference however fails to address 42 C.F.R. § 411.46(d)(2) which discusses compromise settlements. This section states: “If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses.”
The changes to the Guide have caused some parties to re-evaluate the pros and cons of entering into a settlement with a non-submitted WCMSA. This concern may have also been heightened by the circulation of a January 13, 2022, letter from CMS’ RO-9 Customer Service representative to a claimant in response to CMS’ receipt of notice of a workers’ compensation settlement that included funds for a non-submitted WCMSA. The CMS letter referenced portions of Section 4.3 of the Guide.
In a possible response to the industry’s concern about the addition of Section 4.3 to the Guide, CMS held a webinar on February 17, 2022, to discuss a variety of WCMSA topics. CMS’ representative, John Jenkins explained that Section 4.3 was added to the Guide to “clarify” CMS’ position on non-submitted MSAs. He advised that that when CMS reviews and approves a WCMSA, the marker in the Medicare beneficiary’s Common Working File (CWF) is fixed at the amount of the CMS determined WCMSA as opposed to the net settlement. Once the CMS determined WCMSA is properly exhausted, Medicare will pay as the primary payer for any additional injury-related care. On the other hand, whenever CMS becomes aware of a settlement that includes funds for a non-submitted MSA, a marker is placed in the Medicare beneficiary’s CWF reflecting the total value of the settlement less procurement costs and conditional payments. The impact of this marker is that injury-related claims may be denied until CMS removes the marker that is set at the net settlement amount. Medicare becomes aware of the existence of non-submitted MSAs when they are provided with MSA administration attestations and settlement documents. Jenkins advised that CMS does not use the Section 111 data to identify settlements that are not submitted to CMS for review. This author presumes this is due to the voluntary nature of CMS review of WCMSA proposals. Jenkins confirmed that Section 4.3 would apply as of January 11, 2022.
The impact of Section 4.3 will be felt at the time that a non-submitted WCMSA is exhausted, and Medicare is presented with an injury-related bill for payment. This will occur earlier when the non-submitted WCMSA is funded with a structure. When Medicare denies a bill, the Medicare beneficiary or their representative will have the opportunity to appeal the denial through the administrative appeal rights. The basis for the appeal would be the proper exhaustion of an objectively reasonable and defensible MSA that was prepared at time of settlement.
Jenkins also used the webinar to explain the projection methodology used by the Workers’ Compensation Review Contractor (WCRC) when evaluating a WCMSA proposal. Jenkins stressed the all-important need to protect Medicare from ever being presented with any injury-related bills. This is done by assuming the worst-case scenario when it comes to the need for possible future injury-related treatments. The fact than an individual has discharged themselves from any further injury-related treatment in the years prior to settlement is irrelevant when it comes to estimating future injury-related treatment. After all, it is possible that he may return for care. Similarly, an individual who is unable to move forward with an injury-related procedure due to co-morbid conditions, might get over the co-morbid conditions in the future and should have an MSA pay for the procedure. Jenkins also touched on the need to submit settlement documents in order to finalize a CMS approved WCMSA and addressed questions regarding the amended review timeline and other miscellaneous MSP compliance matters.
Conclusion
There is no doubt that Medicare is a secondary payer when “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State . . . .”(42 U.S.C. § 1395y(b)(2)(A)(ii), § 1862(b)(2)(A)(ii) of the Social Security Act, 42 C.F.R. § 411.20(2)(i)). It is also clear that Medicare is precluded from making payment for services to the extent that “payment has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile, or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.” (42 U.S.C. § 1395y(b)(2)(A)(ii), § 1862(b)(2)(A)(ii) of the Social Security Act, 42 C.F.R. § 411.20(2)(ii-iii)). Given an employer’s responsibility in an accepted workers’ compensation claim to pay for ongoing injury-related medical services, both defense and petitioner attorneys generally have no issue with the funding of a Medicare Set-Aside in certain settlements to avoid cost shifting these expenses to Medicare.
The main issue with CMS review is that it often results in overfunded CMS WCMSA determinations since CMS consistently projects for worst case future treatment scenarios. If an individual’s injury-related treatment has plateaued and he has not received any medical treatment for years before the CMS submission, it is extremely unlikely that a workers’ compensation carrier would ever have to pay for any further treatment. If the WCRC and CMS looked to evidence-based medicine guidelines and a “reasonably likely to occur” standard of projection rather than a possible worst case scenario standard in estimating future injury-related care, the number of WCMSA submissions would significantly increase. This simple action by CMS could alleviate the decline in WCMSA submissions.
An additional issue with the CMS submission process is that it is often unduly burdensome with development letters being issued for information that is simply unavailable. These conditions spawned the birth of the non-submit MSAs. The non-submit MSAs were never intended to cost shift to Medicare as evidenced by the voluntary sharing of their existence with Medicare.
Section 4.3 of the Guide will impact a Medicare beneficiary when the non-submitted MSA is exhausted since the marker in the beneficiary’s CWF will reflect the total settlement less procurement costs. Although this will trigger a denial of additional injury related expenses a non-submit MSA that is projected based on evidence-based medicine guidelines and properly exhausted should withstand scrutiny. It is also unlikely to exhaust prematurely. It is unfortunate, however, that CMS is placing additional and unnecessary burdens on Medicare beneficiaries that have suffered workplace injuries. The addition of Section 4.3 to the Guide is deleterious to the injury victim. Rather than relying on the defense to address the MSA in a settlement, the petitioner/applicant attorneys should take charge of the process. Synergy Settlement Services is here to help you with a wide array of services.
BLOGS
READY TO SCHEDULE A CONSULTATION?
The Synergy Settlements team will work diligently to ensure your case gets the attention it deserves. Contact one of our legal experts and get a professional review of your case today.
