Workers Compensation Review Center (WCRC) Changes Position on Development Letters

As a result of Gould & Lamb’s continued advocacy with CMS Central Office, WCRC, and Regional Offices, Workers’ Compensation Medicare Set Aside submitters will see a light at the end of the tunnel.  Based on direct conversations, we anticipate a turn-around in what has been an arduous approval process with repeated development requests that were neither germane nor reasonable.  The WCRC is starting to address the back log that has accumulated since November 2013, has restated their commitment to abide by state specific statutes, and to refrain from seeking unnecessary, and unrelated medical records as part of its review process.   The WCRC has expressed its commitment to expedite review of the backlog for all affected submitters.

Since the publication of CMS’ WCMSA Reference Guide in November 2013, there has been a marked increase in the number of development requests from the WCRC for medical records purportedly to enable the reviewers to accurately price future Medicare costs over a claimant’s life expectancy.  To submitters and other stakeholders, the WCMSA Reference Guide, originally intended to herald a new era of transparency and accountability, , resulted in the WCRC increasing the issuance of development letters seeking medical records dated within six months of the submission or the reopen date — whichever is was later.

No Federal Preemption

The WCRC justification for its expanded request for medical records and the authority on which it relied is the November 2013 WCMSA Reference Guide and its subsequent update.  The assumptions made by the WCRC were:

  • The MSP preempts the state WC law.
  • Even if the claimant treats outside the WC system and the carrier has no obligation to pay for the treatment Medicare is not primary.
  • Even if the claimant is no longer entitled to medical benefits by operation of law, Medicare is still not the primary payer and the employer/carrier should bear the associated costs.

Moreover, the WCRC has asserted that it is doing “an investigation” and is not limited only to the records for treatment of the WC injury but to the claimant’s family doctor medical records, if there are no current records from the WC provider.  This was a firm position until recently and accounted for countless delays in the determination process.  Through Gould & Lamb’s advocacy, we successfully established that CMS and the WCRC must give deference to state specific statutes because there is no federal preemption.   The MSP is a secondary payer law and where there is not otherwise a primary payer, Medicare is absolutely the primary payer.   We continue to advocate with CMS to adopt clear and unambiguous polices so that there is no confusion on the part of the WCRC –the Agency charged with following CMS policies and reviewing submitters Life Care/Future Treatment Plans.  We urge CMS and the WCRC to adopt policies that comport with the public policy of the MSP and the opinions of various U.S. Federal Courts that Medicare stands in the same shoes of the beneficiary and where the state does not require the carrier to pay, then Medicare has no right of recovery or subrogation under any theory of law.

We are pleased to see that the pace of approvals has picked up dramatically and the number of development requests has abated.   We are committed to continuing to work with the CMS, the WCRC, and the Regional Offices to ensure a fair and transparent review/approval process.

For more information or if you have questions, please contact your Gould & Lamb Regional Claims Consultant at 1.866.MSA.FILE (672.3453).

Self Administration Toolkit for WCMSAs

Deborah Pfeifle, PresidentOn April 11, 2014 the Centers for Medicare and Medicaid Services added a Self Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements to its CMS.gov website. It can be viewed here.

The resource is designed to aid workers’ compensation claimants in the self administration of their MSA accounts with the proper establishment of, and expenditures from, their WCMSA account. It describes self administration guidelines and procedures including the need to establish an interest bearing account for the funds and explains the payment of medical bills using MSA funds to reimburse providers and annual accounting requirements. It includes form letters to be provided to medical providers and sample transition records for MSA expenditures. Additionally, it explains circumstances where an MSA is temporarily and/or permanently depleted based on lump sum or annuity funding.

The Toolkit is the first comprehensive outline of the compliance obligations that are incumbent upon workers’ compensation claimants after settlement. This guidance suggests that CMS recognizes the failure of most claimants in the proper management of their MSA to ultimately protect their Medicare benefits and those of the Medicare Trust Fund. The guidance advises injured parties regarding the use of Workers’ Compensation state Fee Schedules in reimbursing providers and in properly advising Medicare as to the use of the MSA account. CMS advises that the Toolkit can help in the management of the account and “satisfy Medicare’s interests related to future medical care.” Additionally, it cautions that prior to treatment for a workers’ compensation injury a claimant “must” advise a healthcare provider of the existence of a WCMSA. CMS further suggests that bank statements and tax records should be kept as the documentation may be requested by CMS as proof that the account is administered “correctly”.

The complicated rules and extensive knowledge required to adequately identify the medical bills which are applicable to the Medicare Set Aside account preclude successful management of these funds by most Medicare beneficiaries.  When paired with CMS’ explicit and implicit warnings regarding its future interests and the potential denial of Medicare benefits based upon inaccurate or incomplete evidence of proper exhaustion, the Toolkit may cause alarm for claimants.   CMS further advises that a Medicare beneficiary seek the advice of a professional for assistance with the proper use of the MSA funds when confidence is lacking.

To simplify these requirements and ensure proper exhaustion of the WCMSA, Gould and Lamb Trust Company offers the following services:

Post Settlement Account Administration

High-touch trust and account management.

The Gould & Lamb Trust Company ensures compliance and no loss of benefits through professional administrative services for Medicare Set-Aside, Medical Custodial Accounts, and Special Needs Trust accounts. This service provides dedicated assistance, choices in management of settlement funds, and 24/7 access to account information via a secure web-based portal.

MSA Self-Administration Support Service

  • Low cost alternative to professional administration
  • Offers ongoing access to a dedicated representative offering guidance to properly disburse Medicare Set Aside funds
  • Access to discount prescription drugs, durable medical equipment (DME), outpatient services and case management
  • Assistance with CMS Annual Accounting
  • Resolution of temporary and permanent exhaustion

Professional Medicare Set-Aside (MSA) Administration

  • Preparation of professional administration agreement
  • Establishment of the MSA interest-bearing account
  • Access to discount prescription drugs, durable medical equipment (DME) outpatient services and case management
  • CMS Annual Accounting
  • Resolution of temporary and permanent exhaustion

Medical Custodial Account (MCA)

  • Preparation of professional administration agreement
  • Establishment of the medical account offering discount prescription drugs, durable medical equipment (DME), outpatient services and case management
  • Medical Account Coordination with a Medicare Set Aside account

Special Needs Trusts (SNTs)

  • Trust document preparation and professional trustee services
  • Coordination of asset management
  • Trust administration, including annual accounting to Social Security, Medicaid, the Courts and IRS, as required
  • Access to discount prescription drugs, durable medical equipment (DME), outpatient services and case management


The Global Leader in Compliance

To receive a quote for assistance with Self Administration or Professional Administration of a WCMSA or to learn more about our MSP compliance services, call 1-866-MSA-File and ask to speak with Bobbie Chasco at extension 1022.

CMS Issues Alert Regarding Threshold Amount

Russell S Whittle, VP Medicare Secondary Payer ComplianceOn February 18, 2014, CMS issued two Alerts regarding the threshold amount under which the Medicare Secondary Payer Recovery Contractor (MSPRC) would not pursue its right to recover unpaid conditional payments. In addition, CMS modified the Mandatory Insurer Reporting obligations for cases settling under $1000.

Section 202 of the Strengthening Medicare and Repaying Taxpayers (SMART) Act charged CMS with the duty to calculate and publish a single threshold amount for settlements, judgments and awards arising from liability insurance (including self-insurance) for physical based trauma incidents (excluding ingestion, implantation and exposure) no later than November 15 of each year. Cases meeting the threshold would not be subject to conditional payment recovery efforts by Medicare. The calculation was to be reviewed by the Comptroller of the United States before it was published.

Previously, CMS had established a $300 settlement threshold for reimbursement of conditional payments. The $300 reporting threshold and conditional payment reimbursement process began in August 2011.

For 2012, CMS determined that its average cost of collection per Non Group Health Plan case was approximately $335.  This figure was expected to be similar in 2013 and 2014. CMS then analyzed the settlement amount range closest to its $335 cost of collection, which was found to be cases more than $750 and equal to or less than $1000.

Accordingly, trauma-based settlements, judgments or awards totaling $1,000 or less are exempt from conditional payment reimbursement.

The second Alert of the same date clarified the first Alert regarding reporting under Section 111 of the Medicare, Medicaid and SCHIP Extension Act. Effective immediately, settlements, judgments and awards arising from liability insurance (including self-insurance) for physical based trauma incidents (excluding ingestion, implantation and exposure) are not reportable under the Mandatory Insurer Reporting scheme. The MSP User Guide will be amended to reflect the reporting threshold change when it is updated.

There are several questions raised by the Alert. Perhaps most important is whether CMS has altered its Mandatory Insurer Reporting system to incorporate the change in the requirements. At present, Mandatory Insurer Reporting requirements obligate Responsible Reporting Entities to report all settlements, judgments and awards arising from liability insurance (including self-insurance) for physical based trauma incidents in cases whose value exceeds $2000. As of January, 2015, the threshold was scheduled to drop from $2000 to $300.

Gould & Lamb expects that CMS will publish clarification of its Alerts along with technical guidance regarding the changes. Gould & Lamb will continue to monitor developments on these important issues and will apprise you of their practical implications on your Medicare compliance program.

CMS Proposes Expansion of Workers Compensation MSA Re-Review Process

Russell S whittle, Esq VP MSP ComplianceOn February 11, 2014, the Centers for Medicare and Medicaid Services (CMS) published a proposed methodology for the re-review of Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs). The proposal can be viewed here: http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Re-review-Expansion.pdf.

Comments on the proposal, including those as to timeframe, thresholds and re-review criteria must be sent by March 31, 2014 to WCMSARereview@cms.hhs.gov. CMS will then publish implementation dates and instructions on the use of the new process on its website.

At present, re-reviews of WCMSAs have been limited. There existed no method by which to have CMS reconsider an MSA in a case that had not settled. Once the MSA had been reviewed, CMS would not consider revisiting the case even in instances where the parties had not effectuated a settlement. According to the proposal, CMS will now allow a “broader array” of instances where a re-review will be allowed. Additionally, CMS proposes that a re-review will be completed by the Workers’ Compensation Review Contractor (WCRC) within 30 business days of the re-review request. In order to avoid any suggestion that the WCRC would simply “rubber stamp” its initial determination, CMS proposes that the re-review will be completed by individuals not previously involved in the initial determination.

Re-review Criteria for WMSAs

The Proposal divides re-review criteria into two distinct categories. MSAs will be Re-Reviewed at any time where errors have been made by the WCRC and the submitter and in other situations depending on the contingencies of the case or the calculation of the Set-Aside itself. Those criteria as listed in the Proposal are:

  • Re-review requests can be submitted at any time to the WCRC for the following reasons:
  • A mathematical error was identified in the approved set-aside amount.
  • Original submission included case records for another beneficiary.
  • Re-review can be submitted to the WCRC when the original WCMSA was   approved within the last 180 days; the case has not settled; no prior re-review request has been submitted for this WCMSA; and, the re-review requests a change to the approved amount of 10% or $10,000 (whichever is more) for any of the following reasons:
  • Submitter disagrees with how the medical records were interpreted.
  • Medical records dated prior to the submission date were mistakenly omitted.
  • Items or services priced in the approved set-aside amount are no longer needed or there is a change in the beneficiary’s treatment plan.
  • A recommended drug should not be used as it may be harmful to the beneficiary.
  • Dispute of items priced for an unrelated body part.
  • Dispute of rated age used to calculate life expectancy.

Significantly, CMS has now recognized that the review process is, at times, contrary to state workers’ compensation laws particularly where a statutory provision exists limiting compensable medical care. Instances abound where the WCRC has not considered evidentiary orders or has failed to adhere to its own review policies. In those situations, the Proposal allows a re-review request to be elevated to the CMS Regional Office. No time frame was proposed for Regional Office review, however. Additionally, the placement and language in the Proposal appears to signal that disagreements based on these issues may be discretionary and will not be evaluated via the independent review process.  Court rulings and state statutes are vitally important in the WCMSA process and represent a significant opportunity for stakeholders to legitimately minimize the impact of a set-aside on a claim settlement.  As such, a discretionary review standard seems inconsistent with the desire to abide by state law dictates.

While the core issues cited by CMS are appropriate for triggering a re-review, the 180 day requirement and the 10% or $10,000 threshold may make the intended benefits to stakeholders impractical in Workers’ Compensation cases. The Workers’ Compensation system, by its very nature, is often fraught with delays.  While a 10% or $10,000 difference in a counter-higher determination may be insignificant in a large settlement, it may be meaningful in a relatively small settlement. On its face, the $10,000 threshold can be likened to the CMS practice of forgoing conditional payment recovery in case settling under $300 in the aggregate, which has limited impact on the resolution of claims. If it is assumed that the 10%- $10,000 threshold is a starting point for CMS, it is expected that comments to the proposal would challenge those numbers as meaningless, for the most part. Expanding the criteria for review to cases where a discrepancy in the approved amount exceeds the allocated amount by more than 10% or $10,000 could prove more reasonable.

The re-review process is the first step in a long awaited appeals-type process for workers’ compensation MSAs. While the review of cases that fall under the first category (mathematical errors or unrelated records submission) has been routinely allowed, the second category represents a departure and, perhaps, a philosophical change regarding future care allocation re-reviews and their relationship to workers’ compensation cases and laws. As noted, it is unclear based upon the Proposal itself what type of evidence and argument will be allowed in the re-review process or what kinds of medical documentation will be persuasive regarding issues such as ”harmful” prescription medications or unrelated body parts. It is also unclear whether re-review will be required as opposed to discretionary. Accordingly, the responses to the Proposal will be critical in shaping the parameters of the re-review process and in setting the appropriate thresholds for re-review. Depending on its final iteration, the Proposal can only be seen as a potential welcome change by practitioners, insurers and litigants seeking to satisfy their obligations to the Medicare Trust Fund and their clients. Gould & Lamb encourages comments and suggestions using the link above.

CMS Issues Updated Workers Compensation Medicare Set-Aside Arrangement Reference Guide

On November 6, 2013 CMS released version 2.0 of its previously published Workers Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide.

The changes consist primarily of additions discussed at the 4/11/2013 WCRC Town Hall presentation and its previously published redacted Operating Rules of 4/22/2010.  This attempt to be more transparent about the review methodology of WCMSAs is presented in summary here as Version 2.0 of the Guide which includes the following changes:

Clarified title and wording of situation in which a WCMSA is not necessary because Medicare’s interests are manifestly protected

  • Added § 9.4.1.1 – Most Frequent Reasons for Development Requests
  • Added § 9.4.2 – WCRC Team Background and Resources Used
  • Added § 9.4.3 – WCRC Review Considerations
  • Added § 9.4.4 -  Medical Review
  • Added § 9.4.5 – Medical Review Guidelines
  • Added § 9.4.6 – Pharmacy
  • Added material from the Operating Rules, primarily in section 9.4, WCRC Review

The following procedures utilized by the WCRC appear to have the most significant impact on pricing protocols and adequately protecting Medicare’s interests.

Evidence Based Medicine

CMS has signaled that its reviewers use evidence-based rationale for their determinations, taking into account both published guidelines and current peer-reviewed medical literature. However, CMS states that these are guidelines, not rules. However, this declaration is often inconsistent with actual practice.  Appendix 4 is included in the Guide with a list of resources that the WCRC utilizes.
State Specific Guidelines

The updated guide states that the WCRC strives to comply with the laws of the state determined to be the appropriate state of venue.

Fee Schedule and Inpatient Admissions

CMS has now clarified its pricing for inpatient admissions. The Guide indicates that Hospital fee schedules are currently determined using the Diagnosis-Related Groups (DRG) payment for a Major Medical Center within the state, and that this fee is applied to all locations within the state.  However, CMS failed to provide information as to the specific Major Medical Center utilized for each state. CMS has also clarified that it uses the correct region of state fee schedule rather than its previous practice of using the highest fee schedule within the state.

Multiple Dates of Injury for Same Claimant or Different Body Parts

CMS has now clarified that although a single recognized MSA is preferred, individual body parts may be settled which may result in more than one WCMSA for an individual claimant.

Development Requests

The guide indicates that all medical records from all treating physicians for the last two years of treatment for the work-related injury are reviewed, even if the WC carrier has not paid for the treatment and even if the treatment was provided years ago and no current records exist.  The records may or may not be within the last two calendar years but are, nevertheless, needed to price a WCMSA.

Drug Tapering & Drug Weaning

CMS policy is to price drugs over a claimant’s life expectancy even though this may be contraindicated by evidence based medicine.  The Guide acknowledges that drug weaning commonly occurs with pain medications such as opioids, especially when claimants’ work injuries improve, the Guide also indicates that the WCRC takes all evidence of drug weaning into account.  However, CMS maintains, in most circumstances, that the WCRC cannot assume that the weaning process will be successful and holds that the latest weaned dosage is extrapolated over the life expectancy.

The WCRC’s methodology for the allocation of Part D prescription drugs is the most frequent contributor of counter-higher Medicare Set Aside determinations, as a life care planning approach to the allocation of prescriptions is not utilized.  Consideration for the appropriate use of long term medications, the pharmaceutical research- based prescribing recommendations with advancing age and pharmaceutical manufacturers guidelines are absent from the review methodology.

Medically Accepted Indications and Off-Label Use

The Guide makes it clear that the WCRC may include Part D pricing for drugs even when the use prescribed is different from the FDA approved labeling (off label). For a drug to be covered under the Part D Benefit, and thus included in a WCMSA, it must be used for a medically accepted indication. A medically accepted indication is any use for a covered outpatient drug which is approved by the FDA, or a use which is supported by one or more citations included or approved for inclusion in the recognized compendia.

Although stakeholders had no actual input into the CMS policies prior to the agency’s publication of the Guide, the publication has provided more transparency regarding CMS’ actual practices in the WCMSA process than ever before.  This guidance can serve to both explain the actual methodology supported by the WCRC and can be used to measure the WCMSA determination where CMS acceptance of the MSA submitted seems illusive.

While the protection of Medicare’s interests under the Medicare  Secondary Payer statute is clear, payers who, in good faith, “adequately consider” Medicare’s interests by utilizing  third party experts whom apply the principles of evidenced based medicine, life care planning and fee schedule price points based on state jurisdictional laws, many allocators still find themselves at odds with CMS determinations by virtue of the practice of  lifetime allocation of the  current prescription drug regimen for Medicare Part D prescription drugs and the excessive medical treatment frequencies and higher CPT codes for Medicare Part A and B that are inconsistent with evidence based guidelines and published data mining results.

While CMS has improved its transparency and turnaround time for the review of WCMSAs (which is commendable), additional steps to align the review methodology with the actual payment structures and utilization behaviors used to contain Medicare costs, inclusive of an appeals process, may restore the industry’s confidence in the review process and self correct the high degree of non-compliance and decline in CMS Submissions of WCMSAs that exists in the marketplace today.