Monday, January 5, 2009

CMS Operating Rules

Posted by John Cattie

How do CMS WCMSA review contractors review submitted MSAs?

On 12/19/08, CMS posted “Operating Rules” on its website in an effort to share more information with the workers’ compensation industry and workers’ compensation MSA submitters. These Operating Rules, though partially redacted, provide insight to how CMS WCMSA review contractors review submitted MSAs.

With the Operating Rules as guidance, we share one MSA submitter’s story to illustrate the fluidity in this area of law. A worker’s compensation claimant settled a case for $250,000 or less and was not then a current Medicare beneficiary, but would become one in February 2009. An MSA evaluation was provided, but the submitter doubted its reviewability based on prior CMS guidance which indicates these types of cases do not need CMS approval. Upon review, the CMS review contractor deemed this MSA reviewable because it was greater than $25,000.

Prior to the Operating Rules this would be a curious result. According to the Operating Rules, “if a TSA (Total Settlement Amount) is between… $25,001 and $250,000, the case is eligible for review only if the claimant is entitled to Medicare according to the WCCCS (Workers’ Compensation Case Control System) before the PSD (Proposed Settlement Date).” Upon further review of the definition of PSD in section 3 of the Operating Rules, CMS defines it as the later of COBC receipt date plus 120 days or a certain redacted pricing date plus 3 months. Because the MSA submitter received a letter from the COBC dated 12/8/08, the claimant would be eligible for Medicare before their defined PSD, making the MSA reviewable. Note that this is a change to how CMS approval is determined for WCMSAs, but does not change the fact that an MSA evaluation is needed where, due to settlement, there is a permanent burden shift of future injury-related care over to Medicare.

The morale of this story is that the CMS review thresholds provided by the Patel Memorandum are not static. As CMS has told us in the past, the review thresholds are subject to adjustment and may be modified at any time.