• CMS Opens Comment Period For Proposed Workers’ Compensation Medicare Set Aside Appeal Process
  • March 17, 2014
  • Law Firm: Fineman Krekstein Harris P.C. - Philadelphia Office
  • The Centers for Medicare and Medicaid Services (CMS) has released a proposed plan to expand its current Workers’ Compensation Medicare Set Aside (WCMSA) “re-review” process. CMS has opened a comment seeking industry input on the proposed process and also plans to hold a Town Hall teleconference prior to implementing the plan.

    CMS’s proposed plan intends to make the review process available for a broader array of categories. In its proposal, CMS lays out the basic criteria a WCMSA must meet for a re-review to be permitted, including a time limit and qualifying value the challenge must meet. The plan also provides the grounds on which a claimant may challenge the WCMSA. If a re-review request meets all requirements and challenges the WCMSA on one of the permitted grounds, the Workers’ Compensation Review Contractor (WCRC) will direct the request “to a group of experts best skilled to review the identified issue.” These experts will perform the re-review, and will not be the same specialist(s) involved in the original WCMSA decision. Finally, the proposed plan allows challenges regardless of the WCMSA’s ability to meet the basic requirements for re-review if the re-review is necessary due to a mathematical error, or in situations where the original submission included costs for someone besides the beneficiary.

    Currently, there is no formal WCMSA appeal process, however, CMS has historically provided an informal reconsideration process that allows parties to argue for a reduction or modification of the WCMSA amount. Additionally, claimants may contact the Regional Office that issued the decision to provide additional documentation supporting the originally proposed set-aside amount, or submit a re-review request if they believe the decision contains an obvious error, or failed to consider relevant evidence. The turnaround time on such reviews, however, can prove to be restrictive, which has led to parties requesting a more structured and expansive review process.

    Members of the legal and insurance communities have long lamented the lack of similar structure and guidance as to Medicare Set Asides (“MSA”) in liability settlements. Currently, there is no statutory or regulatory requirement for liability MSAs; rather, the MSP Act requires parties to “protect Medicare’s interest.” This leads to inconsistent interpretations of what is required from parties to a settlement involving a Medicare beneficiary with future medical needs. At least some courts have interpreted the regulations and directives that apply to set asides in workers’ compensation cases to also apply in third-party liability cases. See Hinsinger v. Showboat Atlantic City, No: L-3460-07, 2011 N.J. Super. LEXIS 96 (Jan. 21, 2011). However, most courts will only make a determination regarding whether a liability MSA in the following two situations: (1) where the parties agree that an MSA is required, but cannot obtain the approval of CMS for the MSA arrangement; and (2) where the parties have a settlement agreement but disagree as to whether the settlement agreement’s terms included the creation of an MSA.

    Ultimately, parties are left vulnerable to the possibility of a future recovery action by Medicare if they fail to designate sufficient funds in the settlement to cover the beneficiary’s future medical expenses. Although CMS issued advanced notice of a proposed rulemaking on liability MSAs in June of 2012, an official rulemaking has not taken place. If CMS were to issue regulations and guidance similar to the approval process used in the workers’ compensation arena, parties to liability settlements would be better able to protect Medicare’s future interest and assert Medicare’s right to reimbursement as a preemptive means of guarding against their own risk of liability in a Medicare recovery action.