Medicare set asides: now with fewer amended review restrictions

June 30, 2023

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In 2017, the U.S. Centers for Medicare and Medicaid Services (CMS) began allowing older Medicare set aside arrangements (MSAs) for workers’ compensation to be reviewed and approved a second time. Prior to the introduction of this process, known as “amended review,” parties got just one bite at the apple when it came to CMS approval.

Earlier this year, CMS made a subtle but important update to the conditions needed for an amended review. Here, I’ll explain what’s changed regarding MSAs and how it might affect your organization’s workers’ compensation program.

What’s changed?

Before CMS’s May 15 update, MSAs were only eligible for amended review if they were originally submitted between one and six years ago. Now, there is no longer a six-year time limit on eligibility. This means that any previously approved MSA is eligible for amended review, as long as it meets all of the following criteria:

  1. It was submitted at least one year ago.
  2. It was not previously requested for amended review.
  3. The change in the MSA amount is at least 10% of the originally approved MSA amount or $10,000 — whichever is greater.

Is this good news or bad news?

We view the reduced restrictions on when a Medicare set-aside can go through amended review as a welcome change. Older inventories of claims that were previously locked out of the amended review process can now be revisited for settlement opportunities. In cases where CMS had approved MSAs that were restrictively high, we can now give those a second look with current medical and prescription drug information and try to get lower MSAs approved — all with an eye toward getting the cases settled.

It’s worth noting that CMS rules call for the inclusion of recent medical records as part of all amended reviews. This means that cases in which medical expenses have not been paid within the last two years are not the best candidates for amended review consideration, as they will require accumulating medical records from the claimants’ current treating physicians.

On the whole, the reduced restrictions will help employers close out more reserves and get older workers’ compensation claims off their books, while ensuring that injured employees are well cared for in the long term.

What’s next?

The Sedgwick Medicare compliance team is conducting a comprehensive review of our workers’ compensation claims data to identify possible opportunities for amended reviews on behalf of our clients. Our Medicare team members will work closely with the assigned claims examiners to determine appropriateness and viability before reaching out to clients about these opportunities. This process will take several weeks, but clients are welcome to bring cases to our attention in the meantime by emailing us at the address below.

Any updates on the workers’ comp review contractor?

While we’re on the topic of Medicare set-asides, let me share one other piece of news. In my last blog a couple of months ago, I referenced that CMS was expected any day to announce its new workers’ compensation review contractor (WCRC), whose role is to review and approve WC MSAs. Capitol Bridge LLC has been in place as the WCRC since 2017, and CMS issues a request for new contractor proposals approximately every five years.

Surprisingly, CMS has confirmed its decision to retain Capitol Bridge as the WCRC. This is surprising because CMS has replaced the WCRC with a new contractor each previous time it went out to bid. On a positive note, keeping the same WCRC offers some stability in the CMS approval process; the industry won’t immediately have to worry about jumping through hoops to accommodate a new contractor.

However, we have observed one issue arise with Capitol Bridge in recent months: They’ve begun using a second nursing subcontractor to review MSAs, whereas they previously used only one such subcontractor. One would expect both subcontractors to follow the same CMS approval processes and procedures to ensure consistent findings. However, our Medicare compliance team members are seeing subtle differences between the two subcontractors’ reviews that require our ongoing attention and analysis. We are working internally to ensure that our MSAs receive approval regardless of which contractor receives them, so that these discrepancies do not affect our reliable service delivery to clients.

As always, we continue to watch the Medicare compliance space and will keep you apprised of any significant developments that may affect your claims program. Our in-house team of experts stands ready to assist you with Medicare set asides, liens, reporting or other related needs.

Learn more — read about our Medicare compliance solutions or contact us at [email protected]

Tags: health, Medical care, Medicare, Public health