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Non-Submit Workers’ Compensation Medicare Set-aside Arrangements Resuscitated
On January 10, 2022, the Centers for Medicare and Medicaid Services added Section 4.3 – The Use of Non-CMS-Approved Products to Address Future Medical Care to the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Guide”). Section 4.3 sent shockwaves through the industry as it essentially gutted non-submit WCMSA products by stating that a claimant would need to demonstrate complete exhaustion of the net settlement amount before CMS would resume primary payment obligation for settled injuries unless a CMS-approved WCMSA amount had been obtained.
The outcry from vested stakeholders was immediate and sustained on multiple fronts including challenging the CMS’s statutory and regulatory authority to unilaterally determine that a non-submit WCMSA product was a per se burden shift to Medicare of future medicals, noting CMS failed to state whether section 4.3 applied retroactively, and questioning whether future medical allocations in below threshold cases would be recognized by CMS.
On March 15, 2022, the CMS issued a revised section 4.3 addressing many of the stakeholder concerns. First and foremost, revised section 4.3 provides that CMS may deny payment for medical services following exhaustion of the non-submit fund “unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of the MSA funds was appropriate.”
From the outset of non-submit MSA’s, it has been the contention of the vendors offering such products that non-submit MSA’s adequately protect Medicare’s future interests as required in the Medicare Secondary Payer Act. The genesis of these alternatives to a CMS-approved MSA was the “cookie-cutter” approach taken by CMS especially regarding opioids, many of which were or are very expensive, and unlikely to be prescribed for life in the vast majority of cases. Revised section 4.3 states what most had believed was the standard for the validity of non-submit MSA’s – were Medicare’s future interests reasonably considered.
Revised section 4.3 also provides the official policy on non-CMS-approved products applies to all notifications of settlement received on, of after, January 11, 2022, and section 4.3 does not apply to settlements that do not meet CMS workload thresholds.
Now that non-submit MSA products have been resuscitated by CMS, it will be interesting to see what criteria CMS uses in determining whether the initial funding of a non-submit MSA was sufficient. We will continue to monitor developments regarding non-submit MSA’s and provide updates as warranted.