A new version of the Workers’ Compensation Medicare Set Aside (WCMSA) Reference Guide brings with it an important reminder to ensure CMS has a copy of the final workers’ compensation settlement agreement, including funding information.
The Centers for Medicare & Medicaid Services (CMS) released version 3.4 of the WCMSA Reference Guide on October 5, 2021 (dated October 4, 2021). This iteration brings with it minor changes, as indicated in sec. 1.1:
Version 3.4 of this guide includes the following changes: To help ensure that funding information is provided for the WCMSA amount as part of a settlement agreement, clarification language has been added to several conditional letters (see Section 10.5 and the Approval and Development sample letters in Appendix 5).
To align with updates to the MyMedicare.gov site, all references to MyMedicare.gov have been changed to Medicare.gov (Section 17.7).
With respect to clarification language (as referenced in Sec. 10.5 and sample letters in Appendix 5), in instances of a submitted WCMSA, “[t]he parties can proceed with the settlement of the medical expenses portion of a WC claim before CMS actually reviews the proposed WCMSA and determines an amount that adequately protects Medicare’s interests. However, approval of the WCMSA is not effective until a copy of the final executed WC settlement agreement, which must include the funding information for the WCMSA amount, is received by CMS.
Funding information would include details such as the funding date, amount, and whether the account is being funded via lump-sum or annuity. If funded via annuity, particulars need to include identification of the source of the annuity, the annual payment amount, annual funding date, amount of the initial deposit (seed money), and number of years. See WCMSA Proposal Requirements Checklist in the WCMSA Reference Guide, v3.4, at Appendix 5.
Copies of settlement documents, including funding information, should be submitted through the original method of submission. If the original method of submission was via mail, this information can be sent to:
WCMSA Proposal/Final Settlement
P.O. Box 138899
Oklahoma City, OK 73113-8899
If documentation is 10 pages or less, you may also fax them to the following: (405) 869-3306.
Why is it critical to send in this information?
Following approval of a WCMSA and settlement, CMS establishes an “…MSP code in its systems, which identifies situations where CMS has reviewed a proposed WCMSA amount, [and] will assist Medicare contractors in denying payment for items or services that should be paid out of an individual’s WCMSA funds. [The] MSP code specifically associated with the WCMSA situation will permit Medicare to generate an automated denial of diagnosis codes associated with the open WCMSA occurrence.” See MLN Matters Number: MM5371 Revised. This marker, which is placed in a beneficiary’s Common Working File (CWF), is used to coordinate benefits post-settlement. The “marker is removed once the beneficiary can demonstrate the appropriate exhaustion of an amount equal to the WCMSA plus any accrued interest from the account. For those with structured settlements, the marker is removed in any period where the beneficiary exhausts their available funds; however, it is replaced once the anniversary fund deposit occurs until the entire value of the WCMSA is demonstrated as entirely exhausted.” WCMSA Reference Guide, v3.4, Sec. 18.0. Therefore, if the WCMSA approval is not finalized (by way of sending in settlement documents with funding information), there could be issues with respect to proper coordination of benefits.
Moreover, an administrator must ensure accurate record keeping of payments made from the WCMSA account. On an annual basis, within 30 days from the anniversary of the settlement, the administrator reports attestation information to CMS. This attestation is a “statement that payments from the WCMSA account were made for Medicare-covered medical expenses and Medicare-covered prescription drug expenses related to the work-related injury, illness, or disease.” WCMSA Reference Guide, v3.4, Sec. 17.5. Attestation is also reported in situations where an annuitized MSA has been temporarily depleted prior to annual re-funding of the account as well as when an account is permanently exhausted. Id. at Sec. 17.5. If settlement documentation, which includes funding information, isn’t received by CMS, it impedes an administrator’s ability to transmit attestation information electronically via the WCMSAP. See Workers’ Compensation Medicare Set Aside Portal (WCMSAP) User Guide, v. 6.5, Figure 13-7. The WCMSAP states that, “[y]ou cannot submit your attestation until final settlement documentation has been received.”
Submitting settlement documentation that includes funding information is a critical step in the WCMSA submission process since approval of the amount is not effective until CMS receives this. Should you have any questions on this process, please reach out to Ametros.