On May 29, 2014, the Centers for Medicare and Medicaid Services (CMS) amended the recently released Workers’ Compensation Reference Guide published in February 2014. The changes affect medical review, treating physician reports, pharmacy records and Merit Orders, among others.
Section 4.1.4, “Hearing on the Merits of a Case,” is particularly noteworthy. With the publishing of the February Guide, no language specifically addressed evidentiary orders from the finder of fact. Presumably, and based upon longstanding CMS and WCRC procedure, evidentiary orders were given deference regarding the nature and extent of future medical care and whether Medicare had been adequately protected. The omission of any guidance regarding how merits orders would be utilized in the review process may have suggested that those orders would not be subject to scrutiny. This notion was further bolstered by CMS’ recent discussions with many stakeholders regarding their newly expressed desire to consider state statutory requirements as critical to the future medical component of a claim despite a finding that could be contrary to Medicare’s interests.
Taken directly from the CMS website, the entire WCMSA Reference Guide can be found here, including the added sections.
4.1.4 Hearing on the Merits of a Case
When a state WC judge approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests. If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the dollar amount of the entire WC settlement. Medicare will also assert a recovery claim if appropriate.
- If a court or other adjudicator of the merits (e.g., a state WC board or commission) specifically designates funds to a portion of a settlement that is not related to medical services (e.g., lost wages), then Medicare will accept that designation.
On its face, the amended language allows the reviewing entity the exclusive power to determine whether Medicare’s interests were adequately protected despite an evidentiary finding to the contrary. Accordingly, even where state adjudicators determine that a Medicare Set Aside is appropriate and its rationale sound, the review contractor will be the final voice with respect to Medicare’s protection. An order on the merits, then, is not truly dispositive of a WC case until Medicare has agreed and accepted it.
The bulleted portion of the added language does clarify, however, that where a portion of a WC settlement is designated for non-medical damages, Medicare will accept the reasoning of the court. As a practical matter, if the majority of a settlement includes a large non-medical award, Medicare would be restricted from requiring that funds be placed in a Medicare Set Aside account exceeding the amount that the court determined as appropriate for the case.
For interested stakeholders, carriers, third party administrators, and litigants, the amendment raises some practical concerns. First, what will CMS consider a hearing on the merits? Presumably, the added language would exclude WC settlements that are not preceded by a true evidentiary hearing including presentation of witnesses, documents, and legal argument. Second, will the determination as to whether Medicare’s interests were adequately protected require review of the evidentiary proceedings leading to added time and expense for the submitting party? Further, what does the language “Medicare will also assert a recovery claim if appropriate” mean? Does it signal a readiness for Medicare to actually proceed against parties that fail to consider its interests by setting funds aside for Medicare-covered expenses related to the accident? These questions will hopefully be addressed as parties utilize the new procedures and guidelines provided by the new Reference Guide.
Section 9.4.4, “Medical Review” establishes that, where multiple dates of injury are being settled, all body parts must be supported by medical records. Consistent with current policy, medical records for the previous two (2) years must be included in an MSA submissions package.
Section 220.127.116.11 , “Pharmacy Guidelines and Conditions” was added to clarify the CMS position on drug weaning and tapering and also removed any reference to Drug Tables for physician dispensed medication. As to weaning and tapering, all evidence supporting a reduction in medication will be considered as well as any position taken by treating doctors as to medication usage. However, the added section requires that a statement by a treating physician regarding the reduction must be supported by actual evidence that a certain drug’s usage has been, or will be, reduced. A statement unsupported by pharmacy records showing decreased frequency of use may be unacceptable to CMS.
Section 10.7, Section 35 also addresses medical records. Where a settlement addresses compensable (related) body parts and no treatment has been provided or received within two (2) years, all treating doctors must complete a statement that no treatment was received and that no treatment for the body part is necessary. It must also include the last date of treatment.
Finally, Section 10.8, Section 40 clarifies the need for Payment Histories. Submissions packages must contain an entire payment record for all conditions, including those that were denied. Explanations as to why a pay history does not exist may be acceptable in certain instances such as where no printable history exists because no payments were made and a reserve was never established on the claim.
Other additions were made to the guide, but those listed above are certain to impact the review and approval process. In all, it appears that CMS will begin to accept reasonable explanations for excluding unrelated body parts from an MSA and may be softening somewhat on the necessity of collecting medical records and pay histories where they do not exist or are outside the reach of the submitting party. However, evidence of weaning and tapering must be clear and current documentation must show that drug regimens have been altered in a meaningful way.
Gould & Lamb will work within the amended guidelines for review and submission and will incorporate the recent changes into its processes to ensure timely and accurate CMS and WCRC review and approval. Some of the additions may require changes to evidence gathering and presentation, including the physician certification provision where no treatment has been received. However, with the newly published amendments to the Reference Guide, we hope that the process itself will be more transparent resulting in more seamless solutions to Medicare compliance in workers’ compensation cases.
About the Author: Russell S. Whittle, Esq., is the Vice President of MSP Compliance for Gould & Lamb, LLC. In his twenty plus years of practice prior to joining Gould & Lamb, LLC, Mr. Whittle practiced primarily in the area of insurance defense, representing the interests of large insurers and employers in both workers’ compensation and general automobile liability matters.