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Tag Archive for: CMS Submission

Liability Medicare Set-Asides (LMSAs) – A Glimpse into the Future
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Liability Medicare Set-Asides (LMSAs) – A Glimpse into the Future

Last week, the National Alliance of Medicare Set-Aside Professionals (NAMSAP) released a bulletin by Tom Stanley, co-chair of NAMSAP’s Liability MSP Advisory Committee, describing what he learned in a private meeting with the Centers for Medicare & Medicaid Services (CMS) in April 2018. In the meeting, which focused solely on liability Medicare Set-Asides (LMSAs), CMS representatives indicated that there will be an 18-month timeframe before rolling out a LMSA review program. Also, similar to the choice of whether to submit a Workers’ Compensation Medicare Set-Aside allocation report (WCMSA) for review by CMS for Workers’ Compensation claim resolutions that meet CMS established monetary and Medicare eligibility thresholds[1], the choice of whether to submit a LMSA to CMS for review under the new program would also be voluntary.

Other points brought up by CMS for LMSAs are paraphrased below:

• Denial of services for the affected body parts/injury is considered a “primary enforcement mechanism.”
• The injured party must receive something free and clear through judgment, settlement, award, or other payment (“Settlement”).
• Review of a LMSA would not occur until a Settlement has been reached.
• That a LMSA (and presumably the administration of the money set aside) is exclusively the responsibility of the plaintiff and that defendants, and their insurers, are not a “target” of CMS with respect to LMSAs.
• CMS would publish a LMSA Reference Guide.
• Individuals meeting the “eligibility” threshold for LMSAs would remain the same as the current WCMSA system – those Medicare beneficiaries or injured parties who have a reasonable expectation of Medicare enrollment within 30 months.
• There is no projected change in the law and pursuant to the Medicare Secondary Payer statute (MSP)[2], Medicare’s interest must be considered in every claim.
• A workload threshold of above $250,000 is anticipated – “NO SAFE HARBOR”. This level is analogous to the above $25,000 workload threshold for WCMSAs.
• For Settlements above $250,000 and up to $750,000, CMS review/approval would be available and encouraged by CMS. CMS would apply “a formula” to determine the LMSA amount. Starting with the total Settlement amount, CMS would subtract certain expenses and apply a discount factor to the total Settlement.
• Settlements above $750,000 would be presumed to fund all future medicals (considered full commutations) and for those cases, CMS would recommend the preparation of traditional LMSAs.

We have explained in the past that the creation of a Medicare Set-Aside (MSA) is not required by law for any type of case. However, in the Stalcup Memo[3], CMS provided its interpretation of the MSP by saying “[t]he law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Workers’ Compensation or liability case. There is no distinction in the law.” Furthermore, while clarifying that a MSA allocation report is not mandated by CMS, the Stalcup memo announced that “[s]et aside is our method of choice and the agency feels it provides the best protection for the program and the Medicare beneficiary. The long-awaited LMSA review process may have been delayed (prior hints from CMS were that LMSA reviews might start as early as July 2018) due to a realization by CMS that reviewing LMSAs will be a huge undertaking with many factors to consider.

Take Aways from Meeting on LMSAs:

• When the injured party receives something (free and clear) through Settlement etc., that payment triggers the need to evaluate and protect Medicare’s interests.

• If you don’t consider and protect Medicare’s future interests at the time of Settlement and take steps to not prematurely bill Medicare, Medicare can deny payment for those body parts claimed and/or released by Settlement.

• Plaintiff counsel should take steps to educate themselves and their clients on all aspects of MSP compliance and formulate strategies to reasonably consider Medicare’s interests when Settlements fund future medicals and injured clients fall within the Medicare eligibility “window”.

• CMS should seek help from stakeholders in the MSP compliance community, the judiciary, and financial analysts to examine historical data to consider developing more than one formula to be able to reasonably address varying liability case types and differing legal and factual scenarios.

• The percentage of the net Settlement proceeds a beneficiary will receive as a ratio to the full value of the case after deducting procurement costs, attorney’s fees, and Medicare liens etc. can vary greatly and should be taken into consideration.

• There are many reasons liability cases may settle for less than full value including questions of causation, policy limits in place, and percentages of fault that can vary by state, under theories of applicable comparative negligence, contributory negligence or some hybrid thereof.

• The idea that CMS may now consider evaluating apportioned LMSA allocations and taking some of the factors leading to reduced Settlement values into consideration when reviewing LMSAs seems to be a step in the right direction.


[1] The current WCMSA threshold is for Workers’ Compensation claims with a judgment, settlement, award, or other payment (“Settlement”) above $25,000 for current Medicare beneficiaries and above $250,000 and for those with a reasonable expectation of becoming enrolled in Medicare within 30 months of the Settlement.

[2] 42 U.S.C. §1395y(b)(2) et seq.

[3] Sally Stalcup, MSP Regional Coordinator, Region VI (May 25, 2011 Handout).

New WCRC MSA Review Contractor Capitol Bridge, LLC Introduced by CMS
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New WCRC MSA Review Contractor Capitol Bridge, LLC Introduced by CMS

There was nothing earth shattering from the Workers’ Compensation Review Contract (WCRC) webinar/conference call last week introducing Capitol Bridge, LLC (Capitol Bridge) as the new WCRC MSA review contractor that will begin reviewing proposed Medicare Set-Aside (MSA) submissions for the Centers for Medicare & Medicaid Services (CMS) beginning March 19, 2018. The call focused on Workers’ Compensation MSA (WCMSA) reviews and no questions were fielded, and therefore, no new information was provided, regarding potential Liability MSA (LMSA) or No Fault MSA (NFMSA) reviews.

Capitol Bridge takes over the WCRC as CMS’s MSA review contractor beginning March 19, 2018.
The computer user interface through the web portal will be the same as before.

The mailing address will also be the same as in the past, but the phone, fax and e-mail beginning March 19, 2018 will be as follows:

Phone: 833-295-3773
Fax: 585-425-5390 (sounded like this method was discouraged)
e-mail: WCRC@capitolbridgellc.com

Timeframes for reviews and re-reviews are projected to remain the same with a 10-day period from submission for Capitol Bridge to request additional documentation and a 20-day period from receipt of all required documentation for a MSA review decision to be transmitted to a party proposing a MSA allocation.

The acceptance date is still the submission date regardless of the method of submission (CMS web portal, BCRC P.O. Box, facsimile transmission).

One sign that Capitol Bridge Bridge intends to make the review process more efficient is that that there will no longer be a limit to the number of cases that a person may speak to a Capitol Bridge representative about on a single call. A Capitol Bridge representative also mentioned that it intends to use automation to help streamline and improve its MSA review process.
CMS review policy questions should be submitted to CMS and not Capitol Bridge.

No policy changes regarding review of MSAs were announced and it was mentioned that the current WCMSA Reference Guide (version 2.6) is not changing.  Therefore, submission of any MSA for review will continue to be a voluntary process.  The Request for Proposal (RFP) for this new WCRC MSA review contract called for centralized review of all MSA’s (previously only WCMSA reviews were centralized) so this will likely lead to more efficiency regarding the more commonly reviewed WCMSAs, as well as consistency with LMSA and NFMSA reviews (previously left to the discretion of CMS Regional Offices), once they get underway.  Stay tuned for information on how often LMSAs or NFMSAs are reviewed by Capitol Bridge in the future.  While it was not mentioned on the call, you might find this CMS website information on common MSA submission errors and hints helpful when considering submission of MSAs to CMS.

MSA Reviews to Increase for Liability, No-Fault and WC MSAs
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MSA Reviews to Increase for Liability, No-Fault and WC MSAs

On March 1, 2018, the Centers for Medicare & Medicaid Services (CMS) announced a 2018 Workers’ Compensation Review Contractor Transition Webinar will take place this Wednesday, March 7th, 2018.  The webinar, hosted by CMS, will introduce Capitol Bridge, LLC (Capitol Bridge), the contractor that will assume the responsibility of the Workers’ Compensation Review Contract (WCRC) functions including review of various Medicare Set-Aside proposals (MSA reviews)[1], effective March 19, 2018.

The webinar format will include opening remarks and a presentation by CMS concerning the transition and hopefully, more details about the scope of the contract, followed by a question and answer session with the audience.

Date: Wednesday, March 7, 2018 Start time: 1:00 PM ET

Registration and webinar login URL: https://engage.vevent.com/rt/cms2/index.jsp?seid=863 Or Conference call number: 877-251-0301 Conference ID: 9369188

The announcement can be seen here.

We previously announced the request for proposal (RFP) for this contract on our blog. According to the original RFP, this contract may include long-awaited expansion of MSA reviews beyond Workers’ Compensation MSAs (WCMSAs), to include reviews of Liability MSAs (LMSAs) and No-Fault MSAs (NFMSAs).  The contract value for review of MSAs was increased from last year’s 6 million dollar a year figure, to 60 million dollars a year, likely due to the contemplated increase in the number of MSA reviews and expanded scope of the reviews described in the RFP.  We also previously referenced CMS’s amended WCMSA Reference Guide, Version 2.6 that announced CMS’s statement that professional administration is highly recommended for MSAs.  That reference guide also updated some MSA review and re-review procedures that could add some additional work to the MSA review process for Capitol Bridge.

The new WCRC change includes centralization of all MSA reviews, so instead of CMS Regional Offices (RO) handling reviews of LMSAs on a discretionary basis, the ROs will likely provide final approval of the WCRC contractor’s recommendations for all types of MSAs now.  In 2005, CMS pulled the review of WCMSAs from the regional offices and handed that responsibility to one of the predecessor WCRC contractors.  This new change in procedure for review of more MSAs including some LMSAs, could improve consistency of all types of MSA reviews. It’s hard to say yet how smooth the process will be or the expected timing for the various MSA reviews.  The webinar may help clear up some of these questions.

Capitol Bridge is scheduled to receive 60 million dollars per year for the one-year contract with four renewal options for one year each.  The RFP’s Statement of Work gave notice that there could be anywhere from 600 to 11,000 LMSA reviews a year.  Arch Systems and Ken Consulting competed with Capitol Bridge for this contract and previously protested the bid award.  The bid protest was denied on December 12, 2017, paving the way for CMS to move forward with Capitol Bridge.

History of WCRC MSA Reviews:

There has never been a requirement to submit any type of MSA to CMS for review.  CMS has had a voluntary review process for WCMSAs since the early 2000’s.  Around 2003, a WCRC was awarded by CMS for review of voluntarily submitted WCMSAs according to threshold dollar amounts.  The current threshold amounts for CMS to review WCMSAs are $25,000 for settlements involving injured beneficiaries on Medicare at the time of settlement, or $250,000 for settlements involving injured parties who have a reasonable expectation of becoming Medicare beneficiaries within 30 months of the date of settlement (applicable claimants).  Around 2005, CMS centralized the review of WCMSA proposals with the WCRC contractor providing recommendations to the respective CMS Regional Office (RO) regarding whether proposed MSA amounts adequately protected Medicare’s interests, as a secondary payer under the Medicare Secondary Payer statute (MSP)[2].  The procedure has been for the WCRC contractor to either agree with the proposed WCMSA amount, or recommend a higher amount or a lower amount to the CMS RO. The CMS RO has usually followed recommendations from the WCRC contractor, and for those WCMSAs that were approved, would provide the submitter an approval letter.

Liability MSAs have been a bone of contention in the MSP stakeholder community for a long time and settling parties have had to read between the lines of the law and regulations, sometimes arguing whether regulations intended for workers’ compensation matters should be applied to liability claims.  Parties and even courts have looked to CMS and its memos, such as the Stalcup Memo[3], for guidance on how to adequately protect Medicare’s interests for applicable liability claimants’ LMSAs.  Questions have persisted as to whether LMSAs could be reviewed, would be reviewed, were recommended, or were even required.  There is still no law or regulation mandating or directing the method of review of LMSAs and to date, there are no threshold dollar amounts relating to LMSA reviews.  The decision of whether to review a LMSA has traditionally been left to the discretion of each CMS RO and some ROs have routinely declined to review any LMSAs.

Commentary:

Will there be dollar thresholds for the new MSA types under consideration?  How many new LMSA reviews will Capitol Bridge be able to perform over the next year?  Once a process is implemented for LMSA reviews, will this encourage liability settlements and provide clarity to settling parties?  How will Capitol Bridge address differences in case valuation between liability and workers’ compensation cases?  Workers’ compensation claims do not take into consideration comparative negligence or depending on jurisdiction, contributory negligence; factors that can reduce, or even bar recovery in liability claims, depending on the jurisdiction and facts involved.  Claimants considering settlement of workers’ compensation cases often follow strict statutory procedures in order to obtain settlements, but do not have to consider insurance policy limits or statutory caps on future medical expenses like plaintiffs in personal injury cases.  Will apportionment of LMSA amounts now follow an Ahlborn methodology in the absence of CMS regulations directly on point?

CMS’s larger contract for WCMSA reviews and prospective foray into a stepped-up LMSA review procedure announced in June of 2016 and again in October 2017, is coming to fruition.  Over the coming years, we will most likely see more formalized guidance develop for review of LMSAs and perhaps at some point, new regulations governing the area as well.  Through its new Commercial Repayment Center (CRC) contractor, Performant, CMS seems more focused on enforcement of the Medicare Secondary Payer statute (MSP) and recovering conditional payments for medical care related to workers’ compensation, liability and no-fault claims.  This is a good thing for the Medicare Trust Funds and U.S. taxpayers.  Expanding and formalizing a voluntary review process for LMSAs seems to be another logical step to fulfill the intent of the MSP in protecting Medicare’s interests.


[1] MSA allocations are reports, based on prior medical treatment records and expenses, that estimate future injury-related Medicare allowable medical expenses for an injured party (future medical expenses).  The funds covering those projected future medical expenses are referred to as MSAs and mean not only the projected costs (often in the form of a MSA allocation report) but also the arrangement whereby those funds are set aside in an account to be used solely for those applicable future medical expenses.  A (Medicare) Set-Aside Arrangement is defined by CMS in its Medicare Secondary Payer Manual to be “[a]n administrative mechanism used to allocate a portion of a settlement, judgment or award for future medical and/or future prescription drug expenses.  A set-aside arrangement may be in the form of a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA), No-Fault Liability Medicare Set-Aside Arrangement (NFSA) or Liability Medicare Set-Aside Arrangement (LMSA).”

[2] 42 U.S.C. 1395y(b) et. seq.

[3] See Sally Stalcup, MSP Regional Coordinator, Region VI (May 25, 2011 Handout); See also, Schexnayder v. Scottsdale Ins. Co., 2011 WL 3273547 at 5 (W.D. La. 2011) (adopting policy from the Stalcup memo in Court’s findings of fact).

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CMS Announces Potential Upcoming LMSA Reviews

The Centers for Medicare and Medicaid Services (CMS) confirmed yesterday that they are considering expanding their voluntary Medicare Set-Aside review process to include Liability Medicare Set-Asides (LMSAs) and no-fault insurance MSAs.

Here is the announcement as it appeared on the CMS website:

“June 8, 2016 – Consideration for Expansion of Medicare Set-Aside Arrangements (MSA)

The Centers for Medicare and Medicaid Services (CMS) is considering expanding its voluntary Medicare Set-Aside Arrangements (MSA) amount review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS plans to work closely with the stakeholder community to identify how best to implement this potential expansion. CMS will provide future announcements of the proposal and expects to schedule town hall meetings later this year. Please continue to monitor this website for additional updates.”

This announcement is big news in the Medicare Set-Aside community, but not completely unexpected. In June 2012, CMS published an Advanced Notice of Public Rulemaking (ANPRM) in the Federal Register, seeking public comment on implementing formal LMSA reviews. The ANPRM received dozens of comments, including one from Medivest. However in October 2014, CMS withdrew its proposal because it failed to gain approval from the Office of Management and Budget (OMB). At that time, CMS said that they would revisit LMSAs at a later time. It seems that time has come.

As we contemplated in an April 2016 blog, it looks like the delay in the WCRC contract bid, was in fact, caused by CMS considering expanding into LMSA reviews.

We will keep you informed as further developments unfold.

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CMS to Solicit Competitive Bids for Medicare Set-Aside Review Work

The Centers for Medicare and Medicaid Services has announced that it intends to release a solicitation for competitive bids for the Workers’ Compensation Review Contractor (WCRC) on or about March 8, 2016, with an award date of June 20, 2016. It will be a Firm Fixed Price contract with a 12-month base period plus four one-year renewal options. The contract will only be available to Section 8(A) minority owned, small businesses.

The current WCRC contractor, Provider Resources, Inc (PRI), reviews about 29,000 Medicare Set-Asides (MSAs) per year under what appears to be a $5,124,084 per year contract, for an astonishing modest revenue amount of $180.00 per MSA review. They began on July 1, 2011 when the MSA settlement industry was grinding to a crawl with 7-month turn around times. Kudos to Shawn Keogh-Harz, President and CEO of PRI, for successfully reducing turnaround times to 2-4 weeks, while also increasing customer service and improving first-pass approvals. CMS also deserves praise. They did a great job in selecting PRI and working closely with them to improve performance. While we hope that PRI will continue, we are optimistic that whoever the next contractor is will resume the good outcomes of the past few years.

Although the current WCRC contractor has done a great job, we believe that there is a better way to achieve the goals of MSA compliance (which again is to save Medicare money), than focusing so many resources on reviewing WCMSAs. We will address that in our next blog post.

To view the 2.22.2016 CMS WCRC pre-solicitation notice click here.

To view our 2011 blog post announcing the WCRC contract award to PRI, click here.

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28 Days

What would have seemed impossible just a short time ago actually came true for us earlier this month.  On July 10th we reluctantly submitted yet another MSA to CMS for approval via the web-based portal.  We then subsequently scheduled a routine follow up for July of 2022! Much to our surprise, on August 6th, just 28 days later, we received a notification from CMS that our submitted MSA had been approved.

What had been promised to the MSA industry had actually been delivered, and we were able to relay the good news to our customer.  I have since heard similar stories from our friends in the industry with approval times coming back in as little as 7 days.  We’re not sure how long this good fortune will last, but here’s hoping for the best!

CMS Memo Reiterates WCMSA Review Thresholds

The Centers for Medicare and Medicaid Services (CMS) just released a new memo, dated May 11, 2011, which reiterates their previous guidance regarding their review thresholds for Workers’ Compensation Medicare Set-Aside (WCMSA) agreements.

This Memo does not seem to provide any new information on the topic. However, it is helpful because it consolidates previous guidance from multiple previous WCMSA memos in one place. Interestingly, this memo is the first WCMSA memo written by Charlotte Benson, the new Acting Director of CMS’s Office of Financial Management, the Financial Services Group; a position formerly held by Gerald Walters, who apparently has been promoted to Acting Deputy Director of the Office of Financial Management.

The Memo emphasizes the following:

  1. Submission of a WCMSA to CMS for review is a recommended process.
  2. There are no statutory or regulatory requirements to submit WCMSAs to CMS for review.
  3. However, if an entity chooses to use the review process, CMS requests that they follow the rules on its Web Site.
  4. CMS reviews certain MSAs to protect its interest under the Medicare Secondary Payer Statute.
  5. A WCMSA should not be submitted to CMS if future medicals are being left open.
  6. A WCMSA meets the CMS review criteria if:
    a. “The claimant is currently a Medicare beneficiary and the total settlement amount is greater than $25,000; OR”
    b. “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.”
  7. CMS will not review a WCMSA if the above thresholds are not met.
  8. These thresholds reflect “an operational workload” requirement, not a safe harbor.
  9. Medicare beneficiaries must still consider Medicare’s interests in all WC cases and insure that Medicare is the secondary payer to WC.
  10. Per Charlotte Benson, all questions and concerns are to be directed to Frank Johnson, of her staff. Poor guy!

To view the actual memo click here.

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CMS Releases Updated List of Top 10 Submitter Errors

The Centers for Medicare and Medicaid Services (CMS) recently released an updated list of the Top 10 Submitter Errors, as well as a listing of helpful hints to avoid these recurring issues.  The errors that have received the most attention include incomplete or insufficient medical treatment records for the last two years of treatment, and insufficient proof of drugs, dosages, and frequencies for the last two years of treatment.

While changes in CMS policy (i.e. prescription drug pricing and rated age requirements) have led the industry to seek out ways to reduce the cost of an MSA, this list is evidence that many Medicare Set Aside (MSA) submitters have lost sight of basic CMS requirements of a submitted Workers’ Compensation Medicare Set Aside Arrangement (WCMSA).  In our experience as a qualified MSA allocator and professional administrator, we see many new and inexperienced allocators making these same mistakes, too.  The lesson to be learned by this list is that the more qualified your MSA vendor is, the less likely you are to see a CMS rejection.

To view the “Top 10 Submitters Errors and Helpful Hints to Avoid Them” list, please click here.