CMS recently announced its updated WCMSA Reference guide adding a new section, Section 4.3, entitled “The Use of Non-CMS-Approved Products to Address Future Medical Care.” Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.5, January 10, 2022).
Section 4.3 states as follows:
“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 illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before 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.”
CMS refers to “WCMSA non-submit” or “evidence-based” allocations. Also termed “Non-Submit MSA” in the Non-Group Health Plan (NGHP) industry, these allocations have grown in use over the past few years as an option to reduce friction in the cumbersome MSA process and as an alternative to avoid grossly over-funded MSA submissions. Over-funded MSAs will not be exhausted post-settlement over a claimant/ plaintiff’s life expectancy and this overpayment of funds is not returned to the primary payer, without the rare reversionary clause in a settlement document.
Care Bridge International has invested ten years in research and development and we talk about the over-funding of MSAs and delved deeply into acquiring greater accuracy in forecasting medical exposure for injury claims. We have shared with our readers that MSAs are 30% over-funded, on average, creating an economic burden on Medicare Beneficiaries and primary payers.
Having experience with Medicare as a Federal Group Health Plan for eligible seniors and those with disabilities, we are aware that the messaging of the MSP department conflicts with the broader goals of CMS, which is to use data rich sources to innovate and test payer models and create greater access to care, at a higher quality for a lower cost. CMS hosts one of the richest sources of health data in the world. This data is used to create payer models, such as the DRG system for inpatient hospitalizations and much more within the Center for Innovation.
At the time of our company’s founding in 2015, we spoke with CMS about our Analytic-Powered Medicare Set Aside. There was full support given as our AI approach aligned with the Center for Innovation and its goals. In addition, the Program Integrity committee expressed its agreement with the value in our approach to improve MSP compliance by eliminating the friction in the process, increasing compliance with the MSP overall.
What makes Care Bridge International different
Conventional compliance firms and in-house programs use people to review medical records and predict future medical treatment based on a historical look at the individual’s treatment pattern. For MSAs that are submitted to CMS these people add additional treatment, increase frequencies of care, and manipulate treatment codes, inflating numbers to increase the probability of a CMS Approval. But, if an MSA is created for Non-submission to CMS, these same people forecast care differently, using different approaches to create a more reasonable, or lower MSA amount. Herein lies the problem. There is a conflict in having an individual person allocate an MSA two separate ways for CMS Submission vs. Non-Submit. The inconsistency in the way in which MSAs are created for submission vs non-submission by the same person raises questions of legitimacy, credibility, shifting of the financial burden to CMS, and the validity of the process.
Using data intelligence, at Care Bridge International, our Analytic-Powered MSA delivers a detailed future analysis that strictly adheres to CMS guidelines for MSAs. Our MSA is produced in minutes, specifically for an individual claim. Our actuary reviewed and endorsed data, methods, processes, and results have been tested and proven against thousands of claims offering the most advanced approach to forecasting care.
The Analytic-Powered MSA is used as a valid option for a Non-Submit MSA. Our results are based in data science and are reproducible and statistically valid. Comparing our forecasts with post-settlement medical records, it is significantly more accurate. Analytic-Powered MSAs are approved each year with the submitted attestation forms reviewed and approved by CMS.
As claim volumes decreased by 30% during the pandemic and more primary payers voluntarily chose not to submit MSAs to CMS for review and approval, CMS experienced a dramatic decrease in submitted MSAs to review. CMS has a financial obligation of $60 million to the Workers Compensation Review Center, therefore Non-Submit MSAs pose a unique challenge for CMS to achieve its ROI.
In conclusion, CMS acknowledges Non-Submit MSAs, but the claimant/administrator must demonstrate to CMS’ satisfaction that the amount set aside for future medicals, pharmacy and DME was totally exhausted properly. Otherwise, they will treat it as an attempt to shift the financial burden to Medicare and future claims for payment by Medicare will be denied. This is the same standard for CMS approved MSAs, but CMS will scrutinize the non-Submits carefully if there is a funding exhaustion.
It is our recommendation that parties continue to be vigilant with Medicare Secondary Payer obligations, being mindful that options may be necessary not only to protect Medicare, but to ensure a successful settlement, therefore the use of an Analytic-Powered MSA paired with a structured annuity and/ or a post settlement support service or custodian will help to ensure a compliant settlement and afford peace of mind for Beneficiaries and Primary payers.
Interested in Learning More about how Care Bridge International’s Analytic-Powered MSA?
Contact us Toll-Free: 888-434-9326Email: Bob@carebridgeinc.com , Chief Client Officer