Workers’ Compensation and Civil Litigation Consultation & Defense
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NEW CMS GUIDELINES REGARDING NON-SUBMIT MSAs
2022-02-21
The new Centers for Medicare and Medicaid Services (CMS) Guidelines that just came out on January 10, 2022 took aim at Non-Submit Medicare Set-Asides (MSA). CMS has for the first time seemingly taken a position on the use of Non-Submit practices. CMS has indicated that from its view these allocations may “potentially” be viewed as an improper shift of the claimant’s future medical treatment to Medicare in contravention of 42 C.F.R. 411.46. Further, and significantly, CMS seems to be indicating that that they will deny medical services to the full amount of the settlement, minus procurement costs, if these arrangements are used.
When settling a Workers’ Compensation case, the parties are tasked with assuring that Medicare’s interests are protected. There are traditionally two layers of protection: securing an MSA proposal and submission of that proposal to CMS. A “non-submission” Workers’ Compensation settlement secures an MSA proposal, but the parties work around the second step of submission to CMS.
Briefly, a Non-Submit MSA, sometimes called an Evidence-Based MSA, may be appropriate when the settlement does not meet the CMS Workers’ Compensation MSA review thresholds or in situations where a submission of an MSA proposal to CMS is not always the best option as it can create an additional obstacle in an already complex case, or in situations where the settling parties have decided not to participate in the voluntary CMS Workers’ Compensation MSA process. Indeed, there are no statutory or regulatory provisions requiring parties submit a Workers’ Compensation MSA amount proposal to CMS for review. WCMSA Reference Guide, v3.5, Sec. 8.0.
CMS has maintained that “[i]f the parties to a [workers’ compensation] settlement stipulate a WCMSA amount but do not receive CMS approval, then CMS is not bound by the set-aside amount stipulated by the parties, and it may refuse to pay for future medical expenses related to the... work-related injury, even if they would ordinarily have been covered by Medicare.” WCMSA Reference Guide, v3.5, Sec. 8.0.
It is yet to be seen how this policy will play out in real life practice in light of recent trends where more companies are developing programs to implement non-submission MSAs with the strong recommendation or requirement that the injured party have their MSA funds professionally administered after settlement. In determining if non-submission MSA is right for a particular case, communication between the defense attorney and the employer, insurer and/or third-party administrator is crucial to assure all parties are on the same page. Testan Law stands ready to assist its clients navigate this issue.
It is yet to be seen how this policy will play out in real life practice in light of recent trends where more companies are developing programs to implement non-submission MSAs with the strong recommendation or requirement that the injured party have their MSA funds professionally administered after settlement. In determining if non-submission MSA is right for a particular case, communication between the defense attorney and the employer, insurer and/or third-party administrator is crucial to assure all parties are on the same page. Testan Law stands ready to assist its clients navigate this issue.