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CMS releases updated Workers’ Compensation Medicare Set Aside Reference Guide

May 19, 2023 · Medicare Insights Team

The Centers for Medicare & Medicaid Services (CMS) released an updated Workers’ Compensation Medicare Set Aside (WCMSA) Reference Guide, version 3.9, dated 5/15/2023, which includes two significant changes. A copy of the WCMSA Reference Guide can be viewed and downloaded from here (see bottom of page): Workers’ Compensation Medicare Set Aside Arrangements.

Removal of maximum time limit for Amended Reviews

The maximum time limit for eligibility has been removed from the Amended Review process (Section 16.3). This is wonderful news for the industry as CMS is now allowing the one-time Amended Review process to apply to all previously approved Medicare Set-Asides (MSAs) regardless of how much time has passed since the initial approval. The remaining Amended Review criteria as previously documented will still apply.

Clarification regarding IT, SCS, and PNS replacement frequency and PNS pricing

The updated guide provides clarification regarding intrathecal (IT) pump, spinal cord stimulator (SCS), and peripheral nerve stimulator (PNS) replacement frequency calculation (Section 9.4.5). The PNS section is new to the guide and also shows how to price for this device. Previously, the WCMSA Reference Guide outlined the allocation process for these devices to include placements (initial and replacement) every 7 years (except for a rechargeable SCS, which was every 9 years). The claimant’s life expectancy was divided by 7, decimals were dropped, and the whole number was used for determining replacement over the life expectancy.

The updated guide explains the new process for allocating for these items as follows:

Intrathecal Pumps
The WCRC follows the most recent guidance from CMS on IT pump pricing and frequencies. CMS policy assumes that a beneficiary would obtain the prescribed therapy within the first year following settlement if not already placed, or at the next routine interval for replacement. The routine replacement interval for IT pump devices is every 7 years from the most recent placement date. If the IT pump is not already placed, 1 year is removed from the life expectancy before replacement calculation occurs to account for that initial placement. To calculate the number of replacements, the claimant’s life expectancy, less the number of years from the most recent placement date, is divided by 7, decimals are dropped, and the whole number is used for determining replacement over the life expectancy. Pricing includes necessary pump refills over the claimant’s life expectancy.

Examples:
Beneficiary life expectancy is 21 years, and no IT pump is yet placed. Take the 21 years, subtract 1 year for the initial placement, divide the remainder by 7, and use the whole number with that result. (21-1)/7 = 20/7 = 2.86
1 initial placement is needed, plus 2 replacements

Beneficiary life expectancy is 12 years, and an IT pump was placed 3 years prior. Take the 12 years, subtract 4 years for the most recent placement, divide the remainder by 7, and use the whole number with that result.
(12-4)/7 = 8/7 = 1.14
1 replacement is needed.
Spinal Cord Stimulators
The WCRC follows the most recent guidance from CMS on SCS replacement pricing and frequencies.

CMS policy assumes that a beneficiary would obtain the prescribed therapy within the first year following settlement if not already placed, or at the next routine interval for replacement. The routine replacement interval for SCS devices is every 7 years for non-rechargeable and every 9 years for rechargeable from the most recent placement date. If the SCS is not already placed, 1 year is removed from the life expectancy before the replacement calculation to account for that initial placement. To calculate the number of replacements, the claimant’s life expectancy, less the number of years from the most recent placement date, is divided by 7 (or 9, depending on unit type), decimals are dropped, and the whole number is used for determining replacement over the life expectancy.

Examples:
Beneficiary life expectancy is 33 years and no SCS is yet placed, but a non-rechargeable unit is appropriate. Take the 33 years, subtract 1 year for the initial placement, divide the remainder by 7, and use the whole number with that result.
(33-1)/7 = 32/7 = 4.57
1 initial placement is needed, plus 4 replacements.

Beneficiary life expectancy is 17 years and a non-rechargeable SCS was placed 6 years prior. Take the 17 years, subtract 6 years for the most recent placement, divide the remainder by 7, and use the whole number with that result.
(17-6)/7 = 11/7 = 1.57
1 replacement is needed.
Pricing for Peripheral Nerve Stimulator (PNS) Surgery
PNS replacement calculations are performed the same as for SCS.

Examples:
Beneficiary life expectancy is 27 years and no PNS is yet placed, but a non-rechargeable unit is appropriate. Take the 21 years, subtract 1 year for the initial placement, divide the remainder by 7, and use the whole number with that result.
(27-1)/7 = 26/7 = 3.71
1 initial placement is needed, plus 3 replacements

Beneficiary life expectancy is 15 years and a rechargeable PNS was placed 2 years prior. Take the 15 years, subtract 2 years for the most recent placement, divide the remainder by 7, and use the whole number with that result.
(15-2)/7 = 13/7 = 1.86
1 replacement is needed.

In some cases, noted in the examples above, the overall allocation for the replacements of these devices will be 1 higher than it has been in the recent past (cases where the device has not yet been implanted) or in other cases 1 lower (cases where the device has already been implanted).

Other noteworthy updates

CMS has removed the CMS Director of Financial Services Group name and signature image from all WC letters and has now replaced that with the current CMS customer service contact information (Appendix 5).

The CMS Regional Offices are no longer responsible for approving initial determinations. Consequently, the guide includes updated process language and contact information throughout (Sections 9.0, 9.4.6, 9.5, and 18.0, and Appendix 5). Section 9.5 has been changed to read “Determinations” instead of “Regional Office (RO) Receipt” and the Workers’ Compensation Review Contractor (WCRC) has replaced all references to the RO and will handle everything directly.

The CDC Life Table link has been updated (Section 10.3) to the United States Life tables, 2020. https://www.cdc.gov/nchs/data/nvsr/nvsr71/nvsr71-01.pdf

Future updates

Optum Settlement Solutions will continue to keep the industry updated on all aspects of Medicare Secondary Payer (MSP) compliance, including issues pertaining to WCMSAs.

For questions regarding the above updates, please contact Medicare.Compliance@optum.com.