Between the Numbers: CMS Releases (Some) Data on WCMSA Submissions and Approvals From the Last Three Years
In October 2022, CMS released statistics for WCMSA Submissions and Approvals from fiscal years 2020 through 2022. The release can be found here.
Although CMS routinely releases data regarding the Medicare program, as well as some annual statistics on conditional payment recovery and costs, to our knowledge, this is the first time CMS released formal numbers for WCMSA submissions and approvals.
For each of the three years, the single-page report provides the number of recommendations completed (i.e. approved WCMSAs), the sum of “total settlement amounts” in the proposals, and the proposed and recommended WCMSA amounts. It also provides a breakdown between medications and treatment in recommended WCMSAs.
Although the report provides limited data overall, there are interesting patterns that can be gleaned. Please note that these implications and extrapolations are speculative, and purely the thoughts of the author.
The average Total Settlement Amount, proposed WCMSA amount, and recommended amounts fell from 2020 to 2021, but bounced back in 2022; however, the relative percentage between what was proposed and the recommended amount (i.e. the degree of CMS’ “counter higher”) was higher in 2021 (15%), compared to 2020 (13%) and 2022 (14%) indicating CMS made up for the lower average proposals. For each year, the counter higher was around $10,000.00. The 13 to 15% range for counter highers could represent a baseline for CMS, although the report did not indicate how the “5% match rule” was accounted for (i.e., where CMS will allow a proposal within 5% of the recommended amount). Given that CMS has informally stated that the majority of WCMSAs are approved as submitted, and there are some counter-lowers, the average increase for cases where there are in-fact counter highers is likely much more significant.
The average proportion of WCMSAs to the total settlement amount was around 44% in 2020 and 2021, but that fell to 41.7% in 2022.
Although there was no data regarding the breakdown between medications and treatment in proposals submitted, CMS did divide the recommended WCMSA amounts between medications and treatment. From 2020 to 2021, the average cost of medications in approvals dropped by approximately 20%, and stayed at that relative amount in 2022. This may reflect increased availability of generic drugs (which should reduce the medication costs), decreased AWPs, or a greater awareness and better practices of submitters to avoid having expensive medications included in the WCMSA. Medications accounted for 25 to 30% of the approved WCMSA amount in each year.
The average cost of treatment in approved WCMSAs increased by 3% in 2021, and 1.6% in 2022. This likely reflects typical increases in state fee schedule rates year-over-year.
The number of submissions and reviews completed has decreased each year with a 10% decrease from 2020 to 2021, and a 7% decrease from 2021 to 2022; or approximately a 17% decrease overall between the three years. This could result from residual reduction in workers’ compensation claims and settlements due to the COVID pandemic, or represent a greater willingness by primary payers to utilize non-submit WCMSAs and evidence-based WCMSAs. CMS specifically addressed the use of non-submit WCMSAs in January 2022 via revisions to the WCMSA Reference Guide.
The data set is missing some context: It does not state whether it was limited to new submissions, or if it included re-reviews. It seemingly excluded non-completed proposals or data on the number of funded or “completed” WCMSAs. It is unclear whether it included proposed or approved “legal zero” or “medical zero” WCMSAs, but we presume that it did. Overall, the data may not provide a full or accurate representation of a typical WCMSA. On average, proposed WCMSAs accounted for 40 to 44% of the total settlement amount, but given the average counter higher of 15% in approved MSAs, the WCMSA would ultimately account for a higher proportion of the settlement.
While the grand total of recommended WCMSA amounts was around $1.2 billion each of the three years; this does not mean that all of these WCMSAs were funded, and it would not account for non-submitted MSAs that were funded at settlement. Therefore, the actual amount of WCMSA funding is likely much higher.
We applaud CMS for releasing data from their black-box process of WCMSA review and approvals. With an ever-increasing emphasis on data analytics in all areas of our lives, we hope CMS continues to release additional data and provide greater transparency in their process.
If you have any questions about WCMSAs or other Medicare Secondary Payer Compliance issues, the attorneys at NBKL are always happy to discuss.