Review or Not Review — That is The Question!

DECEMBER 6, 2023

In William Shakespeare’s play Hamlet, Prince Hamlet of Denmark agonizes over his sanity and speaks one of the most famous lines in English literature, “To be, or not to be, that is the question!” 

While Prince Hamlet could not have known about the perils of the Medicare Secondary Payer Act, he clearly could understand the tribulation of claim handlers and attorneys as they ponder the issue of submitting a Medicare Set-Aside (MSA) for review to the Centers for Medicare and Medicaid Services (CMS).

Considering Medicare’s Interests in Your Settlement

The Medicare Secondary Payer (MSP) Act requires parties to consider Medicare’s interest – preventing it from becoming the primary payer post-settlement.  One tool to achieve this statutory command is an MSA, which can be submitted to CMS for review and approval.  This review process is voluntary and available for parties to use when the CMS workload thresholds are satisfied.

The “requirement” to consider Medicare’s interests does not mean parties are compelled to use an MSA, or submit it for review.  Instead, an MSA is recommended when:

• There is a reasonable expectation of Medicare eligibility in the foreseeable future, or the employee is a Medicare beneficiary at the time of settlement;

•  The employee will reasonably require medical care and treatment otherwise reimbursable by Medicare post-settlement; and

•  The settlement closes out all future medical care – would otherwise make Medicare the “primary payer.”

When these factors are present, it is essential to consider using an MSA to ensure Medicare remains the secondary payer post-settlement.

Understanding the Voluntary Review Process

CMS has established workload thresholds to assist parties with MSP Act compliance.  As a matter of practice, many insurance carriers will submit a case for review when the case meets these thresholds.  This has complicated settlement discussions and decision-making processes on how to proceed.

• The CMS review and approval process is voluntary, but parties should not attempt to settle cases with impunity;

• CMS does not have statutory or regulatory authority to deem non-submitted MSAs as being unreasonable – Medicare’s cause of action only arises in those instances where the primary payment is made by Medicare; and/or

• The MSA is merely a contract between CMS and the employee.  While the insurance carrier has “deep pockets,” the employee is the target of any adverse action as they shift the burden onto Medicare by seeking post-injury medical care and having it billed to Medicare.

Given this vital consideration, interested stakeholders should recognize the non-submission of an MSA does not create liability or exposure.  The main target of any potential litigation is the employee.

Common Pitfalls of the WCMSA Review Process

It is also vital that members of the claim management team and other interested stakeholders consider the consequences of unnecessarily submitting cases.

• Common Development Delays:  Cases submitted for review can be subjected to unnecessary development and additional requests for documents – sometimes, documents included in the initial submission.

• Counter-Higher Conundrum:  Inclusion of costly prescription medications the employee is no longer using.

• Failing to Consider Statutes of Limitation and State Law: Recognition of state law from California, but not other jurisdictions.  Frequent examples include CMS ignoring a state’s Statutes of Limitation or an affirmative defense such as payment by mistake of fact.

Effective Medicare Secondary Payer compliance starts with efforts by all interested stakeholders to consider Medicare’s interests to protect their client(s).  While this often can start with submitting an MSA for review and approval, this step is often taken with the misunderstanding that it is the only way to protect oneself from future adverse action.  This notion is not based on law and often involves paying extra monies to settle cases.

Conclusions

MSA Source is here to work with you on all your MSA allocations and submissions.  Our trained medical and legal compliance team can best position your cases before CMS submission and answer the age-old question – to have CMS review or not review!