Show Me The Money

You have settled your client’s workers’ compensation case and now its time for all the paperwork. In an effort to help the parties complete the settlement, the Centers for Medicare and Medicaid Services (CMS) has a reference guide setting forth the process it uses for approving proposed Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA).

When a WCMSA is submitted for approval, CMS must have certain documentation available to complete its review of the proposal. The reference guide sets forth a checklist of the required documentation.

On October 5, 2021 CMS released an updated reference guide, Version 3.4. This version of the guide adds language requiring information regarding the funding to be provided for the Medicare Set-Aside amount as part of the settlement agreement.

According to reference guide 10.5 Section 25, entitled “Settlement Agreement or Proposed or Court Order” – “The parties can proceed with the settlement of the medical expenses portion of a WC claim before CMS actually reviews the proposed WCMSA and determines an amount that adequately protects Medicare’s interests. However, approval of the WCMSA is not effective until a copy of the final executed WC settlement agreement, which must include the funding information for the WCMSA amount, is received by CMS.” Emphasis Added. In essence CMS wants to know where the set-aside funds are coming from and not just the amount of the set-aside.

It is important to keep in mind that no statement in the settlement agreement of the amount needed to fund the WCMSA is binding on CMS until CMS is provided with documentation that the WCMSA has actually been funded for the full amount.

If CMS does not provide approval of the WCMSA amount as set forth in the settlement agreement or proof is not provided to CMS that the approved amount has been fully funded, CMS may deny payment for services related to the WC claim up to the full amount of the settlement. Moreover, your client could also be at risk if the WCMSA is funded for less than the amount that CMS determines to be adequate to protect Medicare’s interests.

The short of it is that it is vital that CMS be provided with all the required information regarding the funding of the settlement.