CMS Issues New WCMSA Reference Guide (Part 2)

On November 7th, we notified our subscribers that CMS had issued a new WCMSA Reference Guide (dated 11/1/2013). To access our prior blog which contains a high-level overview of the new Reference Guide, please click here.

Since our last blog posting, PMSI has conducted a thorough review of the WCMSA Reference Guide and would like to highlight some of the more noteworthy updates. The Reference Guide can also be found on the CMS website here.

  • In Section 8 of the Reference Guide, CMS clarified that “If the parties to a WC settlement stipulate a WCMSA but do not receive CMS approval, then CMS is not bound by the set-aside amount stipulated by the parties, and it may refuse to pay for future medical expenses in the case, even if they would ordinarily have been covered by Medicare. “

PMSI Comments: While this information is not necessarily new, it is interesting that CMS has now explicitly stated this point. CMS does go on to state within this section and acknowledge that there are no statutory or regulatory provisions requiring the submission of a WCMSA proposal to CMS for review.

  • In Section 9.4.4 of the Reference Guide, Step 5,CMS states that if a state institutes or changes a fee schedule, the WCRC will apply the new fee schedule immediately upon learning of its official publication, regardless of official effective date, for any case still in process on that date.

PMSI Comments: While PMSI supports CMS staying up to date on a state’s most current fee schedules, to adopt a new fee schedule to an MSA that is already in process for review at CMS may make the submission process unpredictable for submitters. Additionally, submitters are not aware of how often CMS checks for updates and how soon it will be able to adopt the new fee schedules, etc.

  • In Section 9.4.5 of the Reference Guide, CMS clarified frequency and/or pricing for various medical items such as MRIs, CT scans, surgical procedures and trials.

PMSI Comments: Submitters appreciate this guidance from CMS which will be helpful in understanding how CMS allocates for these items.

  • In Section 9.4.6.1 of the Reference Guide, CMS clarified that the WCRC continues to price Part D drug products based on AWP and further based on brand or generic drug pricing. AWP pricing is pulled from a proprietary source, Truven Health Analytics’ Red Book database. The WCRC uses a program for drug pricing that uses Red Book flat files updated quarterly, and soon to be updated monthly. For generic drugs, the WCRC uses the lowest non-repackaged generic drug AWP.

PMSI Comments: The industry collectively has been seeking to pinpoint how often CMS was updating its Red Book pricing. While many submitters receive updates from Red Book daily, it was never published how often CMS was updating their pricing. PMSI appreciates this update from CMS and hopes that CMS will continue to keep the industry apprised of any changes to how often it updates its Redbook pricing, but remains concerned that submitted MSAs may experience a price
change during the process and erode some predictability.  PMSI encourages CMS to adopt a practice that uses pricing based on the date submitted.

  • In Section 9.4.6.2 of the Reference Guide, it states the WCRC takes all evidence of drug weaning into account, although in most circumstances the WCRC cannot assume that the weaning process will be successful. Usually, the latest weaned dosage is extrapolated for the life expectancy, but again, they assess all records when making these types of determinations.

PMSI Comments: While this clarification is helpful and confirms that weaning will be taken into consideration by CMS if already underway, it does not allow for an accurate WCMSA when the physician plans to continue the weaning process.   

If you have any questions on the new Reference Guide, or if PMSI can be of further assistance, please contact us at askthexperts@pmsisettlement.com.

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