About those Non-Submit MSAs
And it’s Wednesday again dear readers! So glad you could come back!
Here’s a hypothetical for you, dear readers. You’re ready to settle your case by way of C&R, and you’ve ever reached an agreeable figure. The applicant is saying “give me the money, and I never want to see you again.” The defendant is saying “take this money, and I never want to see you again.” At last, after depositions and med-legals and subpoenaed records and 5-hour trials over whether the UR report denying the $20 aspirin was timely, you’re finally ready to part ways forever and ever and ever.
Now here’s the problem. At the start of the case, applicant looked like the guy on the right, and by the time you are ready for a C&R, he looks like the guy on the left. So now you need an Medicare Set-Aside.
But both parties are ready to go and want the money now, and you don’t want the hassle of having CMS review and possibly sink the settlement. So you do what’s called a “non-submit MSA,” where your vendor makes an overly cautious estimate of future medical and you proceed with the C&R without getting CMS’s sign-off.
Well, the Federal Gubmn’t would like to have a word with you about that.
On January 10, 2022, CMS issued its “Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (Please shoot me an e-mail if you would like a copy!) Section 4.3 specifically addresses such an approach with some scary consequences. In short, if the MSA was not approved by CMS, CMS will require proof that the entire C&R was exhausted prior to providing benefits.
If there is a med-legal report that rates to 16% PD ($16,095) and future medical care is reasonable estimated at $20,000, and the parties end up settling for $60,000 to resolve all issues, including right to reopen, some disputed TD, AOE/COE on a denied body part, etc., then it looks like CMS would not provide benefits until there is proof that all $60,000 was exhausted, not just the $20,000 reasonably earmarked for future medical care.
“Yes,” you might say, “but what does that have to do with the price of tea in China?” Well, if you were optimistic about getting those non-submit MSAs into your C&R, you might have cause to deflate a bit. Applicant attorneys, once they hear about this, will be hesitant to recommend such arrangements to their clients lest they be faced with a mal-practice lawsuit or, even worse… a negative review on Yelp!
And even if you can get past a sleepy applicant attorney, all settlements must be approved by a workers’ compensation Judge, who must assess the settlement for adequacy. In light of the CMS’s approach to non-submit MSAs, the WCJ might be reluctant to find a C&R adequate.
What can the defense community do in these situations to move files along? Well, besides the obvious of stipping every case or submitting every MSA to CMS (which no one wants to do, of course), it looks like the only other real approach is to have either the defendant or the MSA vendor agree to pay, adjust, litigate, or defend the non-submit MSA in the event CMS declines to provide benefits.
Another thing we should all be doing is cursing the name of CMS for ruining all of our fun. A closed file is a happy file, and CMS’s approach is going to ensure that a lot fewer files get closed. That makes for a lot more unhappy files, no?
Straight on to Friday, dear readers!