The CMS-approved $0 Medicare set-aside
Reveiw the types of $0 MSAs and the criteria to qualify for Centers for Medicare & Medicaid Services approval.
A zero-dollar Medicare set-aside, or $0 MSA, means that no funds for future injury-related treatment are set aside when a workers’ compensation claim settles. Workers’ compensation payers frequently ask if it is possible to obtain a Centers for Medicare & Medicaid Services (CMS) approved $0 MSA. The answer is, yes — if certain criteria are met and the right documentation is provided.
If no dollars are allocated, why request CMS approval? With a regular MSA, CMS approval means the agency recognizes that neither the payer nor the injured worker is obligated to pay for future medical care for the injury treatment once the MSA funds are properly spent. Medicare then picks up the cost of any future treatment.
When CMS approves a $0 MSA, Medicare will immediately pay for injury-related care post-settlement. CMS approval of the $0 MSA gives the parties, especially the injured worker, the assurance that CMS accepts the claim denial and a $0 MSA that facilitates settlement of the claim.
There are three different types of $0 MSAs that qualify for CMS approval, each with its own criteria and documentation requirements.
Denied claim $0 MSA
This is a $0 MSA based on a completely denied workers’ comp claim when no payments have been made for medical treatment or indemnity. In certain jurisdictions, such as California, some medical payments could have been made during a statutory investigating period. Payments for nontreatment purposes such as independent medical exams, case management and medical records copies do not impact the ability to obtain a $0 MSA approval.
The denied claim $0 MSA requires significant documentation. First is a claim payment history, even if this document is blank. The history has to show all payments made since the claim’s inception and the payments must be itemized. The printout needs to be divided into categories for medical, indemnity and expenses with subtotals for each category and a grand total. And the claims history printout must include a print or run date.
Additionally, this type of $0 MSA needs to include a draft or final version of the settlement documents and court orders or rulings or a statement that no such documents exist.
Importantly, CMS requires a proposed settlement. It will reject the $0 MSA if the settlement is finalized, for example with court or commission approval, before CMS’s review and approval of the $0 MSA.
Other requirements are a first report of injury (or a declaration that no such document exists) and a financial detail and denial letter that confirms that the claim was denied, along with any other explanations, such as why no first report of injury is available. Finally, two years of medical records must be submitted along with a CMS consent to release form, executed by the claimant.
Accepted claim $0 MSA
This is a $0 MSA based on medical documentation that there is no further need for injury-related treatment. CMS’s WCMSA Reference Guide says: “The individual’s treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.”
In practice, CMS accepts treating physician statements that say the injury-related treatment has resolved or returned to baseline (when there was a pre-existing condition) and that no further injury-related treatment will be necessary. Keep in mind that CMS will not accept the physician’s statement unless it is consistent with the treatment records and notes.
For example, if the physician states the injury-related issue has been resolved, but treatment notes show ongoing pain to the relevant body part, CMS is unlikely to approve a $0 MSA. Also, if the injured worker will require a revision or replacement to a body part, such as a knee replacement, a $0 MSA will not be approved.
In addition to the physician statement, a claim payment history, two years of medical treatment records and an executed consent to release form are required.
Judicial decision $0 MSA
CMS will accept a judicial decision after a hearing on the merits of the case as a basis for a $0 MSA. This can be on a completely denied claim where the judge upholds the denial of the claim or an accepted claim where the judge finds future medical treatment, if any, is unrelated to the work injury.
The key here is the decision is “on the merits.” If it in any way looks like an agreement between the parties and the judge just stamped their approval, CMS will not accept it.
In addition to the judicial decision, a claim payment history, medical treatment records and an executed Consent to Release are required.
While there are strict documentation requirements, these $0 MSA approvals remain available for workers’ compensation cases meeting the applicable criteria. Given these requirements, it’s a good idea to consult with an MSA company prior to completing a settlement with a $0 MSA.
As Chief Compliance Officer for Tower MSA Partners, Daniel (Dan) Anders oversees all aspects of regulatory compliance associated with the Medicare secondary payer status and local, state and federal laws. His responsibilities include ensuring the integrity and quality of Tower’s other services and products, including its Medicare set-aside program. An attorney and certified Medicare set-aside consultant, Anders consults with payers on all aspects of MSP compliance.
Opinions expressed here are the author’s own.
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