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In a first-of-its kind study, Ametros found that over 34,000 claims per year were denied to Medicare beneficiaries’ post-settlement because Workers’ Compensation Medicare Set Aside (WCMSA) funds were responsible for the payments.

Following settlement resolution of a workers’ compensation claim, the MSA may only be used to “…pay for medical treatment or prescription drugs related to [the underlying] claim, and only if the expense is for a treatment or prescription Medicare would cover. This is true even if you are not yet a Medicare beneficiary… ” See Self-Administration Toolkit for WCMSAs, v1.3, Sec. 4 & WCMSA Reference Guide, Sec. 17.3

An MSA administrator is responsible for accurate record keeping of payments made from the account. On an annual basis, within 30 days from the anniversary of the settlement, the administrator reports attestation information to CMS. This attestation is a “statement that payments from the WCMSA account were made for Medicare-covered medical expenses and Medicare- covered prescription drug expenses related to the work- related injury, illness, or disease.” (WCMSA Reference Guide, v3.5, Sec. 17.5). An attestation is also reported in instances where an annuitized MSA has been temporarily depleted prior to annual re-funding of the account as well as when an account is permanently exhausted. Id.

The Centers for Medicare and Medicaid Services (CMS) has long warned that it requires WCMSA funds to be used appropriately before Medicare benefits will pay for injury-related treatment. CMS’s WCMSA Reference Guide states in Section 17.3 “Medicare will deny all [workers’ compensation] injury-related claims until the WCMSA administrator can demonstrate appropriate use equal to the full amount of the WCMSA.”

Despite this, many in the industry have questioned whether Medicare ever denies claims. Ametros decided to find out.

Collaborating with ResDac researchers, Ametros analyzed Medicare Part B claim data from 2018-2020 and has published “A Study of CMS Policy on Treatment Denials for Injured Workers with a Medicare Set Aside.

Examining a random sample of five percent of the Medicare beneficiary population over a three-year period, researchers estimated Medicare denied 35,980 WCMSA claims in 2018, 36,060 in 2019, and 30,720 in 2020 because the individual’s WCMSA account should have paid the claims.

The report provides a state-by-state chart of denial breakdowns along with definitions and explanations of the Medicare Secondary Payer and MSA terms, how CMS tracks MSAs, and MSA post-settlement administration and compliance obligations.

Almost a third of all denials were in California, which has a robust workers’ compensation claim volume. Less populated states like Indiana, Colorado, and Maryland also had a substantial amount of denied claims.

The data shows a robust tracking system is in place for Medicare to identify and deny payment when an individual with an MSA submits a claim and they have properly attested to exhausting their funds.

The report concludes by saying “it’s evident that individuals who choose to self-administer risk being denied future treatments and services by Medicare because they have not properly complied with Medicare’s guidelines. This includes setting up their account incorrectly or not using their MSA settlement funds appropriately.”

Ametros will present the study’s findings in a February 15 webinar hosted by John Kane, Shawn Deane, and Jayson Gallant starting at 1 p.m. EST. Register here.