Strategizing Complex Cases: “Non-Submission” Medicare Set-Aside Proposal Settlements
- January 21st, 2021
- Lauren Zalona
- No comments
Workers’ compensation cases can become a lot more complex once the parties determine an MSA (Medicare set aside) proposal and CMS (Center for Medicare/Medicaid Services) approval may be needed. Submission of an MSA proposal to CMS is not always the best option as it can create an additional obstacle in an already complex case; there are strategies to securing a settlement of the workers’ compensation case by way of Compromise and Release without submitting the settlement to CMS. This is called a “non-submission Compromise and Release.”
A Non-submission Program should be assessed for an individual insurer, employer, and/or third-party administrators. A non-submission Compromise and Release program is an analysis of risk assessment, and should not be used as a blanket program for all cases which qualify for CMS approval. The risk appetite of the insurer, employer and/or third party administrator will play a role in determining if non-submission MSA is right for a particular case. Communication between the defense attorney and the employer, insurer and/or third-party administrator is crucial to assure all parties are on the same page.
Workers’ Compensation and Medicare Interest
Section 1862(b)(2) Social Security Act (42 USC 1395y(b)(2)), 42 CFR 411.46 says Medicare may not pay for medical treatment that has been made or can be reasonably expected to be paid under a workers’ compensation law or plan. Given the parties are tasked with assuring that Medicare’s interest is protected, there are traditionally two layers of protection: securing an MSA proposal and submission of that proposal to CMS. In a “non-submission” Compromise and Release it is prudent to secure an MSA proposal, but the parties work around the second step of submission to CMS. Submission to CMS can be extremely time-consuming. The CMS approval process is very inconsistent and could result in the MSA being approved for a higher amount than submitted; there is no consistent methodology for appealing an adverse determination. In other words, submission to CMS can “blow-up” the parties’ well thought-out, negotiated settlement at the eleventh hour.
What is a Medicare Set-Aside Proposal?
An MSA proposal is an allocation of future medical exposure based upon the guidelines & methods espoused by Medicare. Represents current exposure and provides adjusters/payers with specific cost information concerning which elements (treatment/medication/life expectancy) are driving the claim. Serves as the “starting point” for negotiating on the appropriate cost of future medical on a claim.
When is a Medicare Set-Aside Necessary?
If considering a Compromise and Release, parties should always consider whether there is a duty to “protect” Medicare’s interest. CMS will only review workers’ compensation MSAs when:
- the claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00;
- or the claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.
If the facts don’t fall into one of these two categories, then no MSA proposal is needed. However, if the facts do fall within one of those scenarios, an MSA proposal is needed; but, again, the second phase (CMS approval) may not be necessary.
Considering a Non-submission Settlement
There are no statutory or regulatory provisions requiring that you submit a workers’ compensation MSA amount proposal to CMS for review. If you choose to use CMS’ MSA review process, the Agency requires that you comply with CMS’ established policies and procedures in order to obtain approval. (Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (2019).)
There are a growing number of employers/insurers that are approaching the practice of non-submission as a decision making process that relates to assumption of risk (as opposed to a blanket or program requirement), that must take into account all factors of the claim including indemnity and the non-Medicare covered future medical costs.
If you have a claim that you believe is a candidate for a non-submission MSA, please reach out to RTGR Law for more information. Non-submission Compromise and Releases should be assessed on a case by case basis. RTGR attorneys are here to help you determine if your claim meets Medicare’s thresholds for the creation of an MSA. If so, you’ll want to assure you know the claimant’s current treatment and medication regimen and ensure all documentation is supportive of the MSA allocation. Our attorneys can help develop a medical record that includes clearly documented and outlined anticipated future medical treatment and medication usage. This includes the possibility of the potential for tapering of medications. If surgeries, joint replacements, spinal cord stimulators, pumps, etc., are no longer medically necessary, a physician should document that information as well. All this information should be established before submission of an MSA, if possible. Finally, it is crucial to ensure the vendor producing the MSA or cost projection has a holistic understanding of the specifics of claim so future treatment is accurately projected.
In addition to the MSA proposal itself, the Compromise and Release should be drafted tactfully to best protect the employer/insurer and/or third-party administer. This could include special addenda to the Compromise and Release documents that are tailored to meet the specific needs of the case. An experienced workers’ compensation attorney should draft these addenda to consider and settle these complex issues when settling with a non-submission Compromise and Release.
If you are interested in developing a Non-submission Program, please reach out to your nearest RTGR Office. Our attorneys are available for consult on individual cases where a non-submission MSA may be appropriate. In addition, if you are interested in a presentation about developing a non-submission MSA program please reach out to your local RTGR Office. We partner with our trusted MSA vendors to provide valuable information about the intricacies of a Non-submission Program .