New WCMSA Reference Guide (V 4.1) focuses on Medicare Advantage and Part D

August 21, 2024 / 6 min read

The Centers for Medicare and Medicaid Services (CMS) has released an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.1, August 1, 2024).

As part this update, CMS indicates that “Version 4.1 of this guide includes the following changes: By CMS’ request, the guide has been updated with details about WCMSA coordination with other health insurers (Section 4.1.3).”^[1]

Summary

As outlined more fully below, the changes made by CMS to Section 4.1.3 relate to Medicare Advantage Plans (Medicare Part C) and Medicare RX Drug Plans (Medicare Part D). In this regard, CMS has added verbiage to Section 4.1.3 which, in part, instructs Part C and Part D plans to “conduct MSP investigations” and seek “WCMSA coverage details” from the WCMSA administrator in relation to approved WCMSA arrangements.^[2] Further, CMS has added verbiage stating if a WC settlement does not identify funds for past debt, CMS considers those debts up to the date of settlement to belong to the WC insurer and that “[r]ecovery may be sought from any party receiving inappropriate payment on behalf of the beneficiary.”^[3] In addition, CMS states that the “administrator must provide details concerning treatments and medications used exclusively to treat a related illness or injury to the plan sponsor so the sponsor may avoid making primary payment in the future.”^[4]

In the big picture, these changes appear to add additional clarity to the use and potential impact of WCMSAs on Medicare Advantage Plan (MAP) beneficiaries. While MAPs may not be provided the same level of information and insight into the WCMSA program that the Benefits Coordination & Recovery Center (BCRC) may have, CMS, based on the added verbiage noted above, may be understood to expect MAPs to identify when a WCMSA may exist to pay primary and to coordinate benefits accordingly. How this may impact beneficiaries remains to be seen. However, if MAPs take a more active role in denying coverage when a WCMSA exists to pay for claim related Medicare covered treatment, there may be more attention on the adequacy of the WCMSA allocation amount and the post settlement WCMSA spend – especially considering the new WCMSA reporting data that will be provided to Medicare as part of TPOC reporting beginning on April 4, 2025.

Additionally, the new language regarding identification of funds for past debts and WC insurer responsibility if that information is absent from the settlement contracts is interesting. The current Medicare conditional payment recovery process typically assigns repayment responsibility based on the Section 111 reporting of ongoing responsibility for medicals (ORM), which acknowledges primary payer responsibility related to a workers’ compensation claim. When ORM is not reported, conditional payment recovery is currently directed by the BCRC against the beneficiary and the settlement proceeds. Therefore, it remains to be seen if this language is intended to mark a shift in the conditional payment recovery process related to denied claims without ORM.

With this backdrop, the author breaks down CMS’s new changes as follows:

Section 4.1.3 (“Other Health Coverage”) updates

To help assess CMS’s new updates, it is first noted that the prior version of Section 4.1.3 read as follows:

A WCMSA is still recommended when you have coverage through other private health insurance, the Veterans Administration, or Medicare Advantage (Part C). Other coverage could be canceled or you could elect not to use such a plan. A WCMSA is primary to Medicare Advantage and must be exhausted before using Part C benefits on your WC illness or injury.^[5]

CMS, as part of its new Version 4.1 updates, has now added verbiage to Section 4.1.3 regarding Medicare Advantage (Part C) and Part D plans.

The current and updated Section 4.1.3 now reads as follows:

A WCMSA is still recommended when you have coverage through other private health insurance, the Veterans Administration, Medicare Advantage (Part C), or Medicare Prescription Drug Program (Part D). Other coverage could be canceled or you could elect not to use such a plan. A WCMSA is primary to all Medicare coverage related to your settled illness or injuries and must be exhausted before using other Medicare benefits on your WC illness or injury.

CMS notifies Part C and D plan sponsors that a WCMSA has been approved and instructs plan sponsors to conduct Medicare Secondary Payer (MSP) investigations. However, CMS does not relay WCMSA details to plan sponsors. Instead, CMS instructs plan sponsors to seek WCMSA coverage details from the WCMSA administrator as part of the plan sponsor’s investigation. When possible, Part C and D plan sponsors are required to avoid paying for expenses that should be covered by a WCMSA. When a settlement is reached, the settlement details dictate who is responsible for ensuring Medicare (Parts A, B, C, and/or D) is repaid for any conditional payments associated with the WC illness or injury. If the settlement does not identify funds for past debt, CMS considers those debts up to the date of settlement to belong to the WC insurer. Recovery may be sought from any party receiving inappropriate payment on behalf of the beneficiary. The administrator must provide details concerning treatments and medications used exclusively to treat a related illness or injury to the plan sponsor so the sponsor may avoid making primary payment in thefuture.^[6]

Compliance Considerations

CMS’s new updates to the WCMSA reference guide emphasize the interactions of the WCMSA program with MAP and Part D beneficiaries. Moving forward, MAPs in turn may take direction from this new language and guidance to coordinate benefits more actively when an WCMSA is funded to pay for claim related Medicare-covered treatment.

From a compliance perspective, it may be beneficial to leverage the PAID Act data provided through the Section 111 query response file to identify when MAP and/or Part D coverage exists and to incorporate MAP and/or Part D handling as part of claim settlement and resolution. Proactively managing this process can help mitigate post settlement issues.

Additionally, for denied claims without ORM or for partially accepted and partially denied claims, it may be beneficial to review the new verbiage CMS has included as part Section 4.1.3 to determine how best to address conditional payments as part of settlement in this context.

Finally, on a related front, it is noted that CMS recently revised its WCMSA Self-Administration Tool-Kit to add verbiage regarding MAPs and Part D with respect to a claimant’s administration of the WCMSA account.

How Verisk Can Help

Please keep in mind that Verisk offers several different WCMSA services, including our popular Provider Outreach program which can help insurers reduce WCMSA amounts. In addition, Verisk can help you address MAP and Part D recovery claims through our MAP resolution service and our programmatic CP Link program.

Questions?

Please contact the author if you have any questions at Sidney.Wong@verisk.com or (978) 825-8262.

[1] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.1, August 1, 2024), Section 1.1 (“Changes in this Version of the Guide.)”

[2] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.0, April 1, 2024), Section 4.1.3

[3] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.0, April 1, 2024), Section 4.1.3

[4] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.0, April 1, 2024), Section 4.1.3

[5] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.0, April 1, 2024), Section 4.1.3

[6] CMS’s Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 4.1, August 1, 2024), Section 4.1.3