CMS Issues Updated WCMSA Reference Guide Addressing Evidence-Based and Non-Submit MSAs

CMS recently issued an updated WCMSA Reference Guide (Version 3.6) providing revised guidance on Evidence-Based and Non-Submit MSAs. CMS revised Section 4.3 of the Reference Guide as follows:

A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.”

42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.

As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.

Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.

CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.

Notably, the new Section 4.3 provides that “CMS may at its sole discretion deny payment for medical services,” whereas the prior language provided that “CMS will deny payment for medical services.” The new language also reflects that CMS may deny payment for treatment “unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.” Previously, Section 4.3 simply indicated that CMS would deny payment for up to the settlement amount and did not refer to any showing that the MSA was sufficient and was appropriately exhausted. Additionally, the prior language did not address whether it would apply to settlements below the CMS review threshold and whether it would apply to cases settled in the past. The new version clarifies those issues.

Please let us know if you have any questions about the new Reference Guide.