Medicare Set Aside Delays: Know What is Required

Saturday, June 18, 2005 | 0

Here is some compelling information released by the Centers for Medicare & Medicaid Services regarding the approval of Workers' Compensation Medicare Set-Aside (WCMSA) Agreements that reflects the potential for significant financial ramifications to insurers.

In January of 2005, the Centers for Medicare and Medicaid Services (CMS) wrote to the industry in an e-mail titled "WCMSA Procedural Reminders". Included in these procedural reminders was some compelling information. Statistics were reported that identified an ongoing problem with CMS submissions, "On a national basis, CMS is still having to develop for required case information on approximately 80 percent of the cases that are submitted". Submitting a complete case file is the easiest way for you to help CMS process your cases in an expeditious manner.

This information was further clarified during a presentation from CMS officials at the March '05 American Bar Association (ABA) meeting. CMS reported receiving approximately 1000 submissions per month at the Coordination of Benefits Center (COBC) in New York. Based on this information, 800 of the 1000 cases submitted to CMS per month did not include the appropriate documentation to facilitate a CMS review of the settlement, and only 200 of the submissions had provided adequate information to be processed and forwarded onto the Regional Office and the Workers' Compensation Review Center (WCRC) for review without a request for additional information from the submitter. The time delay on these 800 files is estimated at 45-60 days before COBC will even forward the file to a CMS/WCRC reviewer for processing and approval.



In response to these staggering statistics, Gould & Lamb (G&L) conducted an internal audit of our CMS submissions in an effort to compare ourselves to these alarming national statistics. Between 1/1/05 and 5/01/05, Gould & Lamb has submitted an average of 109 cases to the COBC per month. Of these 109 cases, none have been returned for development of required case information. Of the 109 cases submitted, 107 are approved by CMS and the WCRC on the first pass, no request for additional information or additional monies. Statistically, G&L's CMS submissions represent 109 of the 200 files per month moving through the COBC without a 45-60 day time delay. Additionally, the first pass approval rating of G&L cases since 1/1/05 is 98.2%. Finally, G&L submissions represents 53.5% of all cases approved by CMS first pass, assuming the remaining 91 submitted by other companies are getting through CMS and the WCRC without the requirement for additional information/monies, which is an unlikely outcome.



It has been hypothesized by industry leaders that the proliferation of "weekend" MSA allocators, large managed care organizations with multiple product lines lacking dedicated experienced resources, and law firms without medical expertise that are trying to prepare allocations are directly responsible for these statistics and the continuance of lengthy CMS turnaround times. When 80% of all cases submitted are being rejected simply because the submitter doesnt understand what information to provide CMS, it creates time delays not only for the insurer on that one file, but for the other cases waiting behind it to get reviewed. The cost to insurers is staggering if you conservatively estimate indemnity benefits at $400 per week and monthly medicals of $500 per month. Over 60 days an insurer may have paid an additional $4200 on a small non-catastrophic settlement as a result of CMS processing delays due to incomplete CMS submissions by inexperienced allocation companies. Now imagine the impact these delays have on larger settlements.

For the last 3 years, CMS has been blamed for long turnaround times and disruption of the settlement process. In response, CMS has answered with the addition of administrative procedures, consistency across the regions, the COBC and the WCRC. CMS recently had to provide a step-by-step sample submission to help inexperienced submitters send the correct pertinent information to COBC. CMS can no longer be held solely responsible for delays in MSA approvals. The industry will be required to submit appropriate documentation for an adequate MSA arrangement that is substantiated by supporting records and rationale, if they want to see improved turnaround times on settlements. Experienced professionals utilizing a multi-disciplinary approach, who understand the Medicare Set Aside process, are key to expediting the MSA approval. To ensure success, utilize a vendor that has handled thousands of cases and insist that your defense counsel have an experienced company handle the allocation preparation and submission.

NET RESULT: Poorly constructed allocations and inadequate submissions prepared by inexperienced companies delay the approval of settlements for all insurers. Utilizing experienced professionals to handle your MSA Allocation and CMS Approval will expedite the process. If you do not, you will find yourself with a less than 10% shot at getting through CMS first pass, which will cost your company thousands in additional expenses.



If you have any questions concerning the information contained in this bulletin or would like source and/or reference material please contact us at news@gouldandlamb.com or call 866-672-3453 ext.1332.



-------------------------------

The views and opinions expressed by the author are not necessarily those of workcompcentral.com, its editors or management.