By Michele Haas
By now, we have all become acquainted with Medicare Set Asides. If you don’t know, a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is a financial agreement between Medicare and the Medicare beneficiary that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease. The goal is to set aside money to cover future medical expenses related to a settled injury or illness for which Medicare may not make payment.
CMS (Centers for Medicare and Medicaid Services) has recently released Version 3.9 of their Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide on May 15, 2023. https://www.cms.gov/files/document/wcmsa-reference-guide-version-39.pdf. This is a helpful guide that provides a brief introduction to workers’ compensation, Medicare, and WCMSAs. It also provides guidance on whether a WCMSA should be submitted, on funding, and on the MSA process in general.
Recently, practitioners and insurance companies have been pivoting to the utilization of Evidence Based MSAs, aka Non-Submit MSAs (NSMSA) or aka Non-CMS-Approved Products to Address Future Medical Care, which is the moniker given by CMS. An Evidence Based MSA is a product that is prepared based upon a claimant’s medical records and trends in research to project future Medicare covered expenses. The components are almost the same as a traditional WCMSA – it utilizes a pricing strategy that matches CMS approved pricing guidelines and mandates professional administration for a specified term. It could consider additional factors that might impact the nature and frequency or treatment based on the facts of the specific claim rather than a broad formula. However, it assumes the parties will not seek formal CMS approval. These can be a cost savings mechanism in resolving workers’ compensation claims. Meaning that the parties can settle their cases more quickly (since the MSA is not submitted to CMS) and potentially at a lower cost than if they used a traditional MSA.
On January 10, 2022, the Reference Guide included new Section – 4.3, which suggested that these MSAs would not be recognized and deemed to be a “burden shift” to Medicare. However, on March 15, 2022, CMS released Version 3.6 of the Guide and Section 4.3 was amended to clarify that reasonable Non-Submit MSAs would be recognized. 42 C.F.R. specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect Medicare’s interest. This new language in Section 4.3 states that CMS may, at its sole discretion, deny payment for medical services related to the workers’ compensation illnesses or injuries, unless it is shown, at the time of the exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.
What is the key to utilizing these MSAs? Although I am not paid for this advertising nor advocating the use of this product, the answer seems to be hiring vendors that stand by their product. Many vendors commit to fully defending their product for the life of the injured worker, at no additional cost. Obviously, all of the parties should acknowledge what is required for these NSMSAs.
If you have questions about Medicare Set Asides, please contact Michele Haas, mhaas@malamutlaw.com.
The content of this post should not be construed as legal advice. You should consult a lawyer concerning your particular situation and any specific legal question you may have.
