WCMSA Reference Guide v3.0: Challenges to Effective Compliance
NOVEMBER 1, 2019
CMS recently released its latest version of the WCMSA Arrangement Reference Guide. This Guide includes several process changes that will bring efficiency to the voluntary review and approval process. These changes allow MSA Source to become a part of your compliance process to remove barriers and unnecessary costs to your workers’ compensation program and avoid unnecessary delay and confusion.
General WCMSA Process Updates
Several Reference Guide updates include minor changes, which remain essential to the Medicare Secondary Payer compliance process. This includes the following areas to review and ensure all segments of your program understand:
Clarification for reporting workers’ compensation cases; for sending yearly WCSMA account attestations; and for sending WCMSA proposals, final settlements, and re-review requests (Sections 2.2, 17.5, and 17.6);
Inclusion of “Death of a Claimant” information to ensure consistency with the recently updated Self-Administration Toolkit for WCMSAs (Section 19.2);
Clarification on how hospital fee schedules are determined (Section 9.4.3); and
Updated link information for Life Table information (Section 10.3).
The WCMSA process has changed countless times since its introduction under policy memoranda and was later formalized with the Reference Guide’s inception. These changes have left all interested stakeholders to constant revision of their compliance programs. While the advent of the Medicare Secondary Payer Recovery Portal is streamlining processes, two additional updates will significantly challenge your compliance program.
Beware of 10.2 Section – Consent to Release Note
Effective April 1, 2020, a new version of the Consent to Release note will be required for all WCMSA submissions. This note requires the employee to certify they reviewed the submission package and understand the WCMSA intent, submission process, and associated administrative requirements. The employee’s initials must be included for the Consent to Release note to be valid.
It is unclear what is driving this change, as employees typically rely on their attorneys for advice regarding the process. One theory is the change stems from Alvarenga v. Scope Industries, 2016 Cal. Wrk. Comp. P.D. Lexis, ADJ8873556 (WCAB 2016). In Alvarenga, the parties settled a workers’ compensation case with a Medicare Set-aside submitted to CMS for review and approval. The employee later sought to rescind the settlement based on the following factors:
The employee was not informed of the risks associated with the WCMSA review and approval process; and
The settlement funds did not cover the full funding of the Medicare Set-aside and non-Medicare-covered expenses.
While a vast majority of submissions will not be questioned, it can be expected that roughly 10% will be disputed by employees who have not been properly educated about the WCMSA review and approval process. This will cause delay, frustration, and confusion. Likely objections will include:
Is the proposed allocation fair? Employees may express concern the allocation does not anticipate all reasonable future Medicare and non-Medicare reimbursable items and services.
Does the employee need a separate allocation prepared on their behalf? They may ask their attorney why defense interests only prepared an allocation. This creates a problematic scenario where two competing allocations become subject to renewed litigation.
What if the employee does not agree to the Medicare Set-aside submission? Parties cannot submit an allocation until the employee, and their attorney agree. More likely than not, this will drive the costs of the submission process via the submission of allocations that favor excessive medical care and treatment.
Road to Required Professional Administration?
CMS may lay the groundwork for required professional administration with additional barriers to Medicare Set-aside self-administration. Under current CMS policy, professional administration is required in the following situations:
The employee has an appointed guardian/conservator; or
The employee has otherwise been declared incompetent by a court.
The new version of the Reference Guide states, “CMS highly recommends professional administration where a claimant is taking controlled substances that CMS determines are ‘frequently abused drugs’ according to CMS’ Part D Drug Utilization Review (DUR) policy.” Information regarding these prescription medications can be found at: https://cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/RxUtilization.html.
It is important to note that this new directive does not “require” professional administration when the employee uses various opioids and benzodiazepines commonly found in allocations. However, it will create a problem in the near future as it can be viewed as de facto compulsory professional administration. It will also cause added concern among attorneys representing injured employees.
Be proactive, not reactive: Now is the time for you to work with our medical and legal experts to update your compliance program. Examples of this can include overcoming the challenges faced by employee and plaintiff attorney objections that will occur with the WCMSA submission process and required informed consent requirements; and
Reduce the growing problems associated with “high-risk” prescription drugs. Less than 50% of people properly metabolize opioids, given their frequent use following a personal or work injury, a large percentage of settlements will be delayed given questions parties have regarding the cost of a Medicare Set-aside allocation and its administration.
Let us become a part of your process. Our team is willing to work with you and develop strategies to address these challenges so you can avoid delay, frustration, and confusion.