B. Josh Pettingill
Many carriers are moving to “non-submit programs” using Evidence-Based MSAs as the driving force for the change[i]. Getting approval of a Medicare Set-Aside is never required by any law or statute. There are times when not submitting the Workers’ Compensation Medicare Set-Aside (WCMSA) makes sense in order to achieve a resolution.
Most attorneys who represent injured workers want the assurance of the Centers for Medicare and Medicare Services’ (CMS) review and approval so that they know their client will never have to worry about CMS coming back to say that not enough funds were set aside to adequately consider Medicare’s interests. The reality is that there is a much larger risk of the injured worker misappropriating funds from the MSA account and CMS denying benefits versus a denial for not setting aside enough in the first place.
If you have done the proper due diligence in establishing a WCMSA and the claimant’s funds have been spent down appropriately, CMS should never take issue with non-submission using an evidence based MSA. One way to ensure that the proper due diligence has been completed is to obtain an independent medical cost projection or MSA analysis. That way, if the carrier insists on not submitting the MSA, you can have the peace of mind that a good faith and reasonable MSA was established at the time of the settlement.
We have also seen firsthand on many occasions that if you insist early in the negotiation process on submitting the MSA to CMS for approval that the carrier will capitulate to this stipulation and allow for the submission. But, be careful what you wish for; you may get CMS approval, but the settlement could end up falling apart if the approved MSA amount comes back too high.
There are situations when you should never consider submitting a WCMSA to CMS for review and approval. The below case examples were recently presented to Synergy which fall into the category of “never submit”. The first is for zero MSAs/controverted claims. The second is for cases that do not meet the review thresholds. As clear as that sounds, there are many times when one of the settlement parties still insists on getting CMS approval regardless of the situation.
Case Example I: Controverted Claim with a Zero MSA
Claimant was injured in 2018. Claimant is currently on Medicare (A and B) and has UnitedHealth care. Claim was being denied as carrier alleged the injuries and conditions were all pre-existing. Case settled on a denied basis for $27,500. Carrier has not authorized any treatment at all.
This is the perfect case to not go through the submission process. Even though, this case would meet submission thresholds (current Medicare beneficiary and Settlement value > $25k). The claim was completely controverted which would allow for a zero-dollar MSA allocation. Getting a zero MSA approved requires the same amount of legwork as any other WCMSA. It also goes through the same process. We have been successful in getting CMS to approve zero MSAs on cases that settled for more than $1 million; however, we have also seen CMS approval blow up the settlement for no legitimate rhyme or reason. The blow up occurring in the form of quantifying what the future care would be if the claim was not completely controverted.
If you have a completely controverted claim, document the file in the form of a court order (if possible), and/or a letter from the employer/carrier indicating the same. You should also memorialize in the settlement documents that the claim was completely denied, and no benefits have been paid.
Case Example II: Application for Social Security Disability Benefits Denied
Claimant was injured in 2015. Claimant is not a currently a Medicare beneficiary but has applied for and been denied SSDI benefits. Case settled for $240,000. This case is one that we see frequently. At face value, the case does not meet the submission review thresholds; however, any submitter of the MSA could argue that the overall value of the claim was over $250k[ii]. Either way, not submitting the MSA in this situation is ideal.
This case cannot be reported under Section III reporting requirement because the claimant does not have a Medicare number; therefore, Medicare will never be aware of this settlement. If you have a case that does not involve a current Medicare beneficiary regardless of whether it meets review thresholds, you should think twice about submitting the WCMSA for approval[iii].
CMS approval is always a voluntary process, but is still the Agency’s recommended method to adequately protect the Medicare trust fund. Getting CMS approval can be a barrier to settlement in certain situations. Synergy has seen many cases where there was a “counter higher” to the submission amount by Medicare which resulted in a case not being able to settle because there were insufficient settlement funds available. Attorneys for the injured worker must make sure the file is properly documented, and that the MSA amount is sufficient at the time of the settlement, regardless of seeking CMS approval.
[i] We discussed EBMSAs in a previous post: https://synergysettlements.com/evidence-based-msas-ebmas-dont-accept-blindly/
[ii] The definition of the “value” of a workers’ compensation case can be found in WCMSA Reference Guide, Section 5E.
[iii] Review Thresholds for WCMSAs: The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000; or the claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.