On March 29, 2013, CMS issued a guide to explain the process for submission of Workers' Compensation Medicare Set-aside Arrangements (WCMSAs) to CMS and to describe how such submissions are reviewed. Essentially, the WCMSA Reference Guide is a compilation of prior memos and alerts published by CMS on topics related to the submission and approval process. The Guide does not replace the memos and CMS cautioned readers to refer to the memos for more comprehensive explanations.
The Reference Guide is 88 pages in length. Several times throughout the Guide, CMS mentioned that MSAs are not mandatory and that submission is a voluntary process. CMS noted, however, that "[a]ny claimant who receives a WC settlement, judgment, or award that includes an amount for future medical expenses must take Medicare's interest with respect to future medicals into account." (Reference Guide, page 3). CMS explained that, "[i]n many situations, the parties to a WC settlement choose to pursue a CMS-approved WCMSA amount in order to establish certainty with respect to the amount that must be appropriately exhausted before Medicare begins to pay for care related to the WC settlement, judgment, award, or other payment." (Reference Guide, page 3). CMS further noted as follows:
If the parties to a WC settlement stipulate to a WCMSA 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, even if they would ordinarily have been covered by Medicare. However, if CMS approves the WCMSA and the account is later appropriately exhausted, Medicare will pay related medical bills for services otherwise covered and reimbursable by Medicare regardless of the amount of care the beneficiary continues to require.(Reference Guide, page 6).
If parties choose to submit a WCMSA proposal to CMS for review, CMS expects the submission to comport with the guidelines established in its memos and alerts and discussed in the new WCMSA Reference Guide. Though there is nothing really "new" about the information presented, a few topics that are sometimes overlooked warrant mentioning.
One of the discussions in the Reference Guide concerns the provision of final settlement documents to CMS. The Guide notes:
If CMS does not subsequently provide approval of the funded WCMSA amount as specified in the settlement or proof is not provided to CMS that the CMS-approved amount has been fully funded, CMS may deny payment for services related to the WC claim up to the full amount of the settlement. Only the approval of the WCMSA by CMS and the submission of proof that the WCMSA was funded with the approved amount, would limit the denial of related claims to the amount in the WCMSA. This shall be demonstrated by submitting a copy of the final, signed settlement documents indicating the WCMSA is the same amount as that recommended by CMS.(Reference Guide, page 23, emphasis added). Immediate submission of final, approved settlement documents to CMS is not only a great way to potentially lessen the amount of conditional payment claims that may be asserted for past treatment for which Medicare paid, it is the best way to ensure that CMS will pay for the claimant's treatment once the MSA funds have been exhausted.
Additionally, with regard to how medical expenses are accounted for in settlement documents, the Guide summarizes CMS' rules as follows:
If the settlement does not specifically account for past versus future medical expenses, it will be considered to be entirely for future medical expenses once Medicare has recovered any conditional payments it made. This means that Medicare will not pay for medical expenses that are otherwise reimbursable under Medicare and are related to the WC case, until the entire settlement is exhausted.
Example: The parties to a settlement may attempt to maximize the amount of disability/lost wages paid under WC by releasing the WC carrier from liability for medical expenses. If the facts show that this particular condition is work-related and requires continued treatment, Medicare will not pay for medical services related to the WC injury/illness until the entire settlement has been used to pay for those services.(Reference Guide, page 23, emphasis added). Basically, if a settlement does not include a designation of what is for past or future medical expenses, Medicare can require that the claimant spend the entire settlement amount before Medicare will pay for related treatment. When settlement documentation does contain a breakdown of amounts being paid for various aspects of a claim, if Medicare does not believe that its interests were protected by that designation, the designation will be completely disregarded by CMS. CMS has the ability to do that even if a settlement was court, board or commission approved.
The entire WCMSA Reference Guide may be found online at:
http://www.cms.gov/Medicare/Coordination-of-Benefits/WorkersCompAgencyServices/Downloads/March-29-2013-WCMSA-Reference-Guide-Version-13.pdf
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