CMS released updated WCMSA Reference Guide

March 29, 2022 · Medicare Insights Team

On March 15, the Centers for Medicare and Medicaid Services (CMS) released an updated Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (Version 3.6). The WCMSA Reference Guide updates, as detailed below, include the much-anticipated clarification on non-CMS approved products that address future medical care, as well as documentation and re-review tips.

Section 4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care: CMS clarified its prior statement to the following:

As a matter of policy and practice, CMS may at its sole discretion (previously stated CMS will) deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments (newly added), before CMS will resume primary payment obligation for settled injuries or illnesses, 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 MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.

Additionally, this section now clarifies that CMS is not referring to non-submit MSAs, which do not fall within the CMS review thresholds:

CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.

Section 9.4.1.1 Most Frequent Reasons for Development Requests: In more detail, CMS clarified the first three development request reasons.

Insufficient or out-of-date medical records. CMS clarified that, “Medical records are required documents for all submissions, including situations where the parties are in dispute.”
Insufficient payment histories, usually because the records do not provide a breakdown for medical, indemnity or expenses categories. CMS clarified, “Payment histories are required documents for all submissions, including situations where the parties are in dispute, and must include breakdowns for payment categories along with identification of any category codes.”
Failure to address draft or final settlement agreements and court rulings in the cover letter or elsewhere in the submission. “Draft or final settlement agreements and court rulings are required documents for all submissions, if they exist. For settlements where conditional payments are made as an element of the agreement, the WCRC will not accept a letter indicating that draft or final settlements do not exist.”

Section 10.2 Consent to Release Note: In this section, CMS removed the “As of April 1, 2020” notation, and left it as “All consent–to-release notes must include language indicating that the beneficiary reviewed the submission package and understands the WCMSA intent, submission process, and associated administration.”

CMS also clarified that, “For electronic standards, only the use of an E-SIGN Act-compliant e-signature or initials are considered valid.”
Section 16.1 Re-review: In regards to reasons a re-review may be requested, CMS added a new bullet, which states: “Should no change be made upon response to a re-review request (i.e. no error was identified), additional requests to re-review the same error will not be entertained.” With this addition, re-review requests (often referred to as resubmissions) are limited to one time only. There was previously no limit.

Impact to the workers’ compensation and auto no-fault industry

The two most important changes from the updated WCMSA Reference Guide are:

CMS confirmed that using a non-submit product does not equate to an automatic shifting of burden to Medicare. When the funds are exhausted, the parties will have an opportunity to demonstrate that both the initial funding of the MSA was sufficient and utilization of MSA funds was appropriate.
There is only one opportunity for re-review/resubmission.

Stay tuned to Optum for updates on all aspects of Medicare Secondary Payer compliance, including issues pertaining to WCMSAs. Please follow our Medicare Insights blog or visit our website at workcompauto.optum.com.

For questions on the above updates, please contact your local Optum Area Client Manager.