As the new Workers’ Compensation Review Contractor (WCRC) takes over this spring, one of the key questions is whether or not this will have any impact in the liability MSA arena. When CMS was soliciting bids from the various potential vendors, leading up to the September 2017 award to Capitol Bridge, LLC, they requested that the potential WCRC vendor be responsible for reviewing not only workers’ compensation plans, but liability MSAs as well. The WCRC bidding proposal requested information regarding the contractors’ ability to review LMSA plans. Additionally, the contract awarded includes a budget increase that is rumored to be the result of the additional work related to the LMSA/NFMSA review.
This followed closely on the heels of the CMS 2016 announcement, noting that they were again considering expanding the Medicare Set-Aside (MSA) voluntary review process to include the review of proposed liability insurance (including self-insurance) and no-fault insurance plans. CMS noted that the agency would work with the community to identify how to best implement the potential expansion. CMS provided no further details, but noted that future announcements and town hall meetings were anticipated to follow. Thus, the industry has again been waiting for further liability guidance to follow.
It was anticipated that we would be potentially be presented with information related to Liability and No-Fault MSA review at the time of announcement of the contract award winner, or perhaps as Capitol Bridge began work in the spring. However, so far we have not heard anything further.
Current Status of Liability Review:
At present there are still no specific thresholds for the voluntary review of liability MSAs. The Medicare/MSA industry asked for clarification of policies and in October 2017 CMS issued the following statement:
The Centers for Medicare and Medicaid Services (CMS) continues to consider expanding its voluntary Medicare Set-Aside Arrangements (MSA) review process to include liability insurance (including self-insurance) and no-fault insurance MSA amounts. CMS will work closely with the stakeholder community to identify how best to implement this potential expansion of voluntary MSA reviews. Please continue to monitor CMS.gov for updates and announcements of town hall meetings in the near future.
Clearly CMS is continuing the process of considering whether they want to establish a more formal system of voluntary liability plan review (or simply development), and how to do so.
In the interim, CMS has continued to assert that their interests should be accounted for in any significant liability settlement involving a Medicare beneficiary. While they will “allow” each of the 10 Regional Offices to undertake review should they opt to do so, there is very limited actual review at this stage. The offices do not as a practice have resources devoted to the process and typically note that “resource constraints” limit their review.
As such, if you have a liability case involving a Medicare beneficiary (or a significant case in which know the Plaintiff will immediately become a beneficiary), the parties should consider whether or not Medicare’s interests should be protected in the matter. The parties should contemplate whether a MSA should be included in the claim, whether or not formal review thresholds are available from Medicare at this time. Plaintiff, particularly, should be aware that s/he should likely anticipate future denials from Medicare and that Medicare will require proper exhaustion of the MSA before they are likely to agree to step in as primary payer. Medicare is paying attention to post settlement medicals and whether or not the parties have protected the government’s interests under the Medicare Secondary Payer Act, and we expect to see more of this in the future.
At present, we suggest reviewing liability matters on a case by case basis at this time and will be happy to discuss a file with you in an effort to determine if a liability MSA is suggested. In the interim, here are a few suggestions for initial review in the liability arena. These are suggestions and not formal liability guidelines:
- If the Plaintiff is a current Medicare beneficiary and the liability settlement is significant (and there is no underlying WC action which will remain open – i.e. – a workers’ compensation carrier continuing to pay open medicals post settlement), then we suggest the parties consider a MSA. Review by the Regional Offices is very limited at this time (pending formal liability guidelines), but regardless of submission, the value of a MSA can be included in settlement documents with all appropriate indemnity language.
- If Plaintiff is not yet a Medicare beneficiary, but has a “reasonable expectation” of Medicare eligibility within 30 months, we suggest the parties exercise due diligence in considering a MSA, factoring in settlement value, future medical needs, and time prior to eligibility. A MSA may potentially be warranted in more substantial claims where medical need and clear access to impending eligibility are evident.
- Finally, where there is a liability claim with an underlying workers’ compensation claim, CMS issued limited guidance via a memorandum in 2003 (4/21/03 Memo Q19).
“To the extent that a liability settlement is made that relieves a workers’ compensation carrier from any future medical expenses, a CMS approved workers’ compensation Medicare Set-aside Arrangement is appropriate. The WCMSA would need sufficient funds to cover future medical expenses incurred once the total third party liability settlement is exhausted. The only exception to establishing a WCMSA would be if it can be documented that the WC claim remains open, and WC continues to be responsible for related services once the liability settlement is exhausted.”
These dual cases are particularly complicated and should be addressed on a case by case basis. We do see claims where workers’ compensation remains open thus the MSA is not necessary. We also see cases where the workers’ compensation case resolves, and thus a WCMSA is prepared. However, we also see cases where the workers’ compensation case closes and no WCMSA is prepared/obtained. In these cases, we frequently see the parties obtain a liability MSA for incorporation in the global settlement release. As there are many incarnations, and a variety of ways that this may or may not be approved, it is key to look at these issues early on in the process.
**These sample scenarios cover many, but not all settlement situations and are not formal legal guidelines. Please address with your counsel the legal and business ramifications concerning Medicare issues in your individual claims.**.
Natalie Clark
Atlas Settlement Group, Inc.
Medicare Compliance Services
3414 Peachtree Road, NE
Suite 990
Atlanta, GA 30326
Office: 404-926-4160 x215
Fax: 404-926-4161
Email: Natalie Clark
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