By: Gregory Lisowski
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Did CMS Just End the Use of “Evidence Based” and “Non-Submit” Medicare Set-Asides?
On January 10, 2022, the Centers for Medicare and Medicaid Services (CMS) published Version 3.5 of the Workers Compensation Medicare Set-Aside Arrangement Reference Guide. Section 4.3 of the updated version of the Reference Guide provides new guidance as to the use of non-CMS-approved products to address future medical care. This section makes clear that CMS will deny payment for medical services related to the workers compensation 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. CMS is relying upon 42 C.F.R. 411.46 which specifically allows for the denial of payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. The implication of this rule means that a claimant who has used an evidence based or non-submit MSA will now need to demonstrate complete exhaustion of the net settlement amount after attorney fees and costs have been deducted. The new rulemaking seems to signal the end of “evidence based” and “non-submit” MSAs for cases that fall within the CMS review thresholds. There is no further clarity on how CMS expects a settling party to adequately protect Medicare’s interests on non-threshold cases. There is also no indication whether this rule is prospective or will apply to settlements prior to January 10, 2022. I am sure this new rule will receive pushback from workers’ compensation practitioners and stakeholders on the MSP compliance industry. We at MSA Services, LLC will be keeping a close eye on how the industry reacts to this significant change in claim handling.
Below you will find the complete text of Section 4.3 as well as a link to the of the complete Reference Guide.
“4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care 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 6 WCMSA Reference Guide 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. ”
WCMSA Reference Guide Version 3.5 (PDF)