CMS Issues Updated WCMSA Reference Guide Version 2.2

CMS has issued an updated WCMSA Reference Guide. The updated Guide can be found here; however, we have noted the updates below.

CMS has added a section regarding deference to hearings on the merits of a case:

Section 4.1.4:  Hearing on the Merits of a Case:
When a state WC judge approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests.  If Medicare’s interest were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the dollar amount of the entire WC settlement.  Medicare also will assert a recovery claim if appropriate.

  • If a court or other adjudicator of the merits (e.g., a state WC board or commission) specifically designates funds to a portion of a settlement that is not related to medical services (e.g., lost wages), then Medicare will accept that designation.

We believe that this newly added section highlights the importance of a hearing on the merits of a case, so long as Medicare’s interests are reasonably considered, and how it can greatly affect the result of a CMS submitted WCMSA. A hearing on the merits of a case can be a great benefit for claims/WCMSAs which may involve legal issues, denied claims and/or body parts, and where the need for future medical treatment (and the extent of that treatment) is contested among the parties.

While this policy is not entirely new and CMS did express in its 2003 memo that it would “generally” honor decisions made by a workers’ compensation hearing on the merits, this is the first time that this policy was mentioned in the Reference Guide. Additionally, the Reference Guide provides more detail than the 2003 memo by stating that Medicare will accept a court’s designation of non-medical expenses in a settlement. Arguably, this would mean that so long as Medicare’s interests are reasonably considered, that CMS could not require MSA funds to exceed what is leftover in the settlement (beyond what the court has designated for non-medical expenses). Therefore, we encourage payers to utilize a hearing on the merits, where available, to resolve these issues prior to submission of a WCMSA to CMS.

CMS deleted the following from Section under physician dispensed drugs: “If the WCRC finds physician-dispensed drugs used for the work injury, these drugs will be included and priced in the WCMSA using the Drug Tables at as linked in Appendix B.

CMS deleted the following which was previously in 10.7, section 35: “If you believe the last two years of treatment are unrelated to the work injury, send those records in addition to those related to the injury, along with any explanation you believe is necessary.” Additionally, CMS revised the following in 10.7, section 35: “If the claimant has not been treated by any doctor for any reason within the last two calendar years, CMS generally needs all treating physicians to state when the last two years of treatment for any reason occurred.  The treating physicians must also state, in writing, the specific condition/injury the claimant was last treated for, and any related therapy.”

Previously, CMS only required one treating physician to state when the last two years of treatment occurred, but now it appears that CMS will require all treating physicians to state when the last two years of treatment occurred. CMS also modified section 10.8, section 40 regarding payment history to require “an all-inclusive payment history (that is medical, indemnity and expenses) from all carriers, third-party administrators (TPAs), employers, pharmacies, and prescription drug suppliers dated within the last six months of submission or reopening of the proposal, showing all payments made (including payment date, payee, date of service, and amount).”

We believe this to mean that CMS is now going to require a full payment history with all submissions, whereas CMS previously used to only require the last two years of payment history. This will likely help CMS identify where and when payments were made over the claim history beyond the last two years. It appears that CMS will still only require the last two years of medical records.

For any questions on the updated Reference Guide, please contact us at:

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