For numerous years, a slightly varied version of essentially the same proposed legislation regarding Workers’ Compensation Medicare Set-Asides continues to be re-introduced in Congress. This year the MSA Bill was again introduced in the Senate. It is titled “Medicare Secondary Payer and Workers’ Compensation Settlement Agreements Act of 2018.”  The Bill has generally failed to gain traction and support year after year.

The MSA Bill seeks to formally legislate guidelines around the WCMSA process. Currently, the MSA and CMS review process have never been formalized in statute or legislation. All CMS guidance around protection of Medicare’s interest has been issued via administrative guidance (i.e., the WCMSA Reference Guide, CMS memoranda, etc.).

While the Medicare Secondary Payer Act (MSP) does clearly indicate that Medicare should not pay where a beneficiary has received primary payment and MSAs in settlements with Medicare beneficiaries have become a de facto Best Practice in the industry, the MSP and its corresponding regulations have never explicitly addressed the MSA and CMS approval process.

Essentially, the MSA Bill would provide formal regulatory teeth to the WCMSA approval process that never previously existed. As such, the industry has been hesitant to provide CMS extra teeth into its currently voluntary MSA review program.

When the MSA Bill was initially formulated close to ten years ago, the industry was experiencing many difficulties with CMS’ current contractor regarding inconsistencies in approvals, high/unreasonable Part D allocations in the WCMSA, and long turnaround times.

However, the current and last contractor have become more consistent in their review policies, and turnaround times are reasonable. With all necessary documentation, CMS reviews WCMSAs within 3-4 weeks. As such, there is not currently a strong desire for WCMSA reform.

That’s not to say that the CMS review process is without flaw. Overallocation of prescription drugs, particularly opioids, continues to be an issue that such over-use potentially could cause long-term health issues for the beneficiary. Further, outside of a limited Re-Review/Amended Review process, no appeal process providing full due process in our court system exists; a CMS determination is final.

Changes from the last version of the MSA Bill include: Removal of the threshold for settlements under $25k where the plan wouldn’t be considered primary (the Bill now seems to indicate there is no threshold to make a plan primary) and removal of all the Qualified MSA language (this was proposed in the prior Bill to make an MSA considered final and adequate without CMS review).

The MSA Bill provides that the MSA shall include payment for “items and services” covered by the workers’ compensation law or plan. “Items and services” are technically not prescription drugs as defined under the MSP. Does this MSA Bill seek to exclude Part D prescription drugs from the MSA? That is not clear, and this point is ambiguous in the text proposed.

Overall, the MSA Bill is vague and missing out on a number of components more pressing and needed in WCMSA Reform.