Ask Amy

1.27.2020 Blog

This Ask Amy topic comes from one of my workers’ compensation cases.  An MSA was priced by a vendor about 6-½ months ago.  We have the updated medical records, which demonstrate the treatment regimen is the same as it has been for the last year: the Petitioner remains on the same medications and the treatment is consistently quarterly.  We were trying to get the MSA submitted before the end of the year and had all of the necessary documents.  We provided them to the vendor, only to receive a response that “the MSA is more than six months old, and we therefore will need to reprice it.”  We were offered the option of a rush repricing to submit before the end of the year, but of course, rush pricing is expensive.  The question from the adjuster was: what is the statutory or legal basis for requiring an MSA to be repriced every six months?

The easy answer is this: there is none.  A Medicare Set-Aside itself has no statutory or legal basis per se.  MSAs were born of an internal CMS policy that was initially developed by CMS policy memos starting in 2001, and later incorporated into a Reference Guide for Workers’ Compensation Medicare Set-Asides (“WCMSAs”).  The current Reference Guide outlines items that are required for a CMS WCMSA submission, as well as a suggested format.  There is no requirement or suggestion that MSAs be updated after six months.

MSAs should only need to be updated when they are no longer accurate.  Circumstances meriting update include: changes in treatment utilization; changes in medication; changes to a state’s fee schedule pricing; or change in life expectancy.  For example, every January, Illinois sees a change to its Workers’ Compensation Medical Fee Schedule, which should trigger a change to the WCMSA proposal.  This would be true even if the WCMSA is less than six months old.  For example, if it was prepared in late November, and then submitted in mid-February, the MSA proposal should be updated to reflect the new fee schedule pricing.  Similarly, in the absence of a rated age for life expectancy, a WCMSA proposal should be updated after a claimant’s birthday, even if that birthday happened just a couple of months after the WCMSA was initially prepared.

My frustration in my workers’ compensation defense case was with the vendor’s apparent automatic policy of WCMSA repricing after six months, with charge and despite no change in any of the above circumstances, which is not based on any CMS policy and unnecessarily delayed our settlement.  Ethically, I have concerns about this type of practice.  Realistically, every case being submitted to CMS for approval should be re-reviewed and analyzed for any changes at the time of the submission to ensure that the product going to CMS is accurate.  The False Claims Act requires submitters to be honest and truthful in their submissions, and to submit documentation that comports with the facts.  This should be part of the submission process itself, every time, and should not require another line item charge.  If, on the other hand, the insurance carrier has a contract with the vendor wherein updates are completed without charge within the first six months, exceptions should be made when the update will simply result in a delay in the resolution of the claim and not impact the submission figure.

Major changes to medical treatment or change in an individual’s co-morbidities may significantly impact a WCMSA submission.  However, it is this author’s opinion that blanket repricing requirements (and fees) are not supported by the CMS guidelines, and are not in our clients’ best interests.

As lawyers, we at NBKL have an ethical obligation to our clients to provide accurate, complete and well-reasoned legal advice and recommendations that are in the clients’ best interest.  Often, what is in our clients’ best interests may not be in the firm’s financial interest, but it is a choice we will make every time – to do the right thing by our clients.

If your contract with your MSA vendor has blanket and legally baseless and overbroad guidelines for when they “must” reprice your MSA, perhaps it is the time to look at renegotiating that contract.  If nothing has changed, should you be charged and, if not, why does the insurance industry stand for it?

The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.