Be an MSA Zero Hero: Getting $0 MSAs Approved
SEPTEMBER 20, 2023
Medicare Set-asides (MSA) have presented countless challenges to members of the claim management team and other interested stakeholders. A reoccurring challenge is the submission and approval of $0 MSAs. To be effective within the Medicare Secondary Payer compliance framework, it is essential to understand the $0 allocation and explore alternatives.
What is a $0 Allocation?
The challenge of any $0 allocation remains that the concept of future medicals is not explicitly defined in statute or regulation. The result is stakeholders rely on a limited body of case law and guidance provided by the Centers for Medicare and Medicaid Services (CMS) in the Workers’ Compensation Medicare Set-aside (WCMSA) Arrangement Reference Guide.
CMS views the MSA as a contract between the injured party and CMS. Because the defense interests are not a party to that contract, there is little exposure to the employer and insurer. It is ultimately within the providence of the federal courts and not CMS to determine if the parties shifted the burden in a settlement and made Medicare the primary payer.
The bottom line is there are two types of $0 allocations: Medical and Legal.
Understanding $0 Medical Allocations
This type of allocation is typically found in claims where the employer and insurer have paid various workers’ compensation benefits to and on behalf of the employee, but the employee has now fully recovered from their work injury and does not require future medical care. Guidance for these allocations is found under Section 4.2 – Indications That Medicare’s Interests are Protected, in the WCMSA Guide:
The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished before the settlement);
There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare’s detriment; and (emphasis added)
The individual’s treating physicians conclude (in writing) that to a reasonable degree of medical certainty, the individual will no longer require any Medicare-covered treatments related to the WC injury.
When these factors are found, CMS will generally agree to a $0 allocation based on the full recovery of the employee.
Understanding $0 Legal Allocations
Unlike “medical $0 allocations,” there is little direct discussion about Legal $0 within the WCMSA Guide. Instead, parties are forced to examine various portions of the Guide for clues in terms of what CMS is looking for and how to get one approved:
Review of Section 4.2 and factors outlining consideration of Medicare’s interests;
10.1 – Cover Letter – Information CMS requires for submission, such as denied claims and supporting documents, settlement information, medical and indemnity payment information documenting that the insurer has made no payments; and
Whether there has been a hearing on the merits.
The goal is to work together to ensure an explicit denial of primary liability, proper verification no benefits have been made in the past, and the defense interests are not responsible for any future portion of the claim.
Conclusions
MSA Source wants you to be a “Zero Hero” and is here to assist with the WCMSA submission process and discuss options. When seeking a $0 allocation, it is crucial to consider whether CMS submission is necessary to meet the needs of all parties. Factors to consider should include information (or lack thereof) necessary to avoid CMS development or delay.
If the parties choose to submit the case, MSA Source is prepared to do what it takes to get the best possible outcome in the WCMSA submission process. We offer a full suite of services to identify and overcome the complex medical and legal challenges in the WCMSA process and offer effective compliance solutions.