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), 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). 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, 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.
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.
 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).”
 42 U.S.C. 1395y(b) et. seq.
 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).