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Answers by Amy
I received several calls in the last couple of months, mainly from Claimants’ attorneys, asking if I know anything about “evidence-based MSAs.” In my role as an officer for the National Alliance of Medicare Set-Aside Professionals (NAMSAP), and in working with clients all over the country, I had seen all varieties of MSA programs. The new, up and coming trend is toward Evidence-Based MSAs (“EBMSAs”).
An EBMSA is a future medical allocation which uses evidence-based medicine guidelines in predicting post-settlement medical care for a settling Claimant or Plaintiff. Evidence-based studies serve as a roadmap in outlining the most efficacious treatment for claimant’s condition. In general, EBMSAs are about 30% less expensive than the traditional, CMS-approved WCMSAs.
As we know, the WCMSA approval process has an associated Reference Guide which explains how imaging, medications and other services will be projected over the lifetime of a Claimant. Even beyond that, CMS generally projects services at the same dosage, frequency or schedule as has been utilized over the last two years.
The concern about CMS-approved WCMSAs is that, once the case settles, the medical service utilization will go down and the WCMSA will be overfunded. EBMSAs look to avoid that overfunding and be more in line with reality.
Employers have been using EBMSAs for quite some time. These are not submitted to CMS, but most EBMSA programs annuitize the future medical funds and provide professional administration, which hopefully safeguard the funds from inappropriate expenditures and realize discounts to ensure the funds are sufficient to cover Petitioner’s lifetime medical needs.
Some ask: Why would anyone non-submit an MSA at all? Isn’t CMS approval the only way to get a “guarantee” that CMS will pick up post-settlement benefits once the MSA is properly exhausted? CMS’ stated policy is that once they approve the WCMSA, and it is funded, CMS will pick up benefits for the Medicare beneficiary after demonstration of proper exhaustion of the funds. However, both parties in a settlement are able to re-review a WCMSA at any time prior to uploading finalized, approved settlement contracts, which means the Claimant can re-review the WCMSA just as easily as the employer/insurer. This can lead to a second approval letter being generated, which can be higher than the original negotiated/submitted amount. This can wreak havoc around settlement time. Employers have criticized this process, taking the position that a WCMSA provides no protection if the Claimant can ask for a re-review to have the number changed at any point, even post-settlement.
Downsides to EBMSAs are that CMS generally does not acknowledge them as a cap on post-settlement medical, or at least that is their stated position. CMS claims it will offset the entire amount of a workers’ compensation settlement from a beneficiary’s medical benefits where the MSA has not been submitted to CMS for approval. Even if settlement documents are forwarded to CMS, they currently have no process to track non-submitted EBMSAs. This can lead to a potential denial of benefits for a beneficiary with a non-submitted EBMSA. With that noted, the beneficiary has the full appeals process available to appeal the denial of services under the usual Medicare appeals process, and anecdotally we have heard CMS does reinstate benefits once a beneficiary demonstrates their EBMSA has been properly exhausted. With that noted, this is by no means published policy, nor is this a guarantee that CMS will continue to act in such a way.
In all, there are pros and cons to each option. Sometimes only an EBMSA can get a case settled, whereas other times Claimants’ attorneys require submission to settle a case. These are always negotiable terms between the parties since CMS approval is optional.
Our duties under the Medicare Secondary Payer Act are to avoid shifting medical costs that should be borne by insurance or self-insurance onto the Medicare program. There is no legal or procedural requirement that CMS approve a workers’ compensation MSA, and there is no way for CMS to currently approve a liability MSA. Companies should develop best practices for their MSA submission, or non-submission, programs, and stick to that process in all of their cases to avoid the appearance of just picking and choosing where an EBMSA will save money.
If you are interested in more information about non-submit programs and how to implement them, or need any assistance with those programs or CMS submissions, the attorneys at Nyhan, Bambrick, Kinzie & Lowry are excited to assist.