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CMS releases request for proposal for the Workers’ Compensation Review Contractor (WCRC) contract

On January 4, 2023, the Centers for Medicare and Medicaid Services (CMS) issued a request for proposal (RFP) for its Workers’ Compensation Review Contractor (WCRC) contract.[1] This information reflects that interested parties have until February 6, 2023, at 12:00 p.m. EST, to submit a proposal for this position.[2]

Back To The Drawing Board: Cms’s Future Medicals Proposals Are Withdrawn – Where Does This Leave Lmsas?

By way of background, the WCRC is the Medicare contractor tasked, in main part, with reviewing Workers’ Compensation Medicare Set-Asides (WCMSA) for the adequacy of proposed medical and prescription drug costs.[3] The current WCRC contractor is Capitol Bridge, LLC which has been serving as CMS’s WCRC contractor since March 19, 2018. According to CMS, the purpose of the WCRC contract “is to procure an impartial entity, not as an agent of the Federal government, to independently price the future Medicare-covered medical services costs related to the WC injury, illness, and/or disease and to price the future Medicare covered prescription drug expenses related to the WC injury, illness and/or disease thereby taking Medicare’s payment interests appropriately into account.”[4] The RFP further reflects that this is a fixed fee contract.[5]

The following provides a very general overview of some key points regarding this RFP which are of likely interest to workers’ compensation stakeholders:

Contract Term

The related Statement of Work notes the contract’s period of performance is “one Base Period plus four one-year option periods” and that there will be “a transition-in period [which] shall be the first 90 days of the contract base year of the newly awarded contract. The transition out period will take place during the last 120 days of the last fully operational, exercised, option year.”[6]

In this regard, the Solicitation, Offer, and Award document indicates that “[t]he period of performance of the contract is April 4, 2023 – April 3, 2028” and provides a further breakdown as follows: Transition-In Activities: April 4, 2023 - July 3, 2023; Base Year: July 4, 2023 - April 3, 2024; Option Year 1: April 4, 2024 – April 3, 2025; Option Year 2: April 4, 2025 – April 3, 2026; Option Year 3: April 4, 2026 – April 3, 2027; and Option Year 4: April 4, 2027 – April 3, 2028.[7]

Workers’ Compensation cases

In general, the RFP documents reflect that “The Workers’ Compensation Review Contractor (WCRC) shall, in accordance with CMS guidelines, evaluate Workers’ Compensation Medicare Set-aside Arrangement (WCMSA) proposals and project the future medical costs, including prescription drugs, related to the workers’ compensation (WC) injury, illness, or disease that would be otherwise reimbursable by Medicare.”[8] As part of the RFP’s Statement of Work (SOW), CMS further states, in part, that the “contractor shall, upon reviewing complete WCMSA proposals, recommend the WCMSA amount for each proposal to CMS for final determination.”[9] In addition, the SOW, states, in part, that the WCRC contractor “shall review all WCMSA proposals within 20 business days inclusive of screening after the initial date of receipt, excluding development of the cases, and provide its recommended amount to CMS.”[10]

The SOW further notes that “[f]or staffing and other resource considerations, the contractor shall anticipate receiving 1,600 new WCMSA proposals per month, which represents forty-two (42) percent of the average workload on hand” and that the contractor “should anticipate a workload from proposals received in previous months that are in various stages of review/completion (e.g., development, etc.).”[11]

On these points, CMS further notes that historically “the WCRC has received approximately 19,000 cases annually, with roughly 14,000 of those reviewing through approval recommendation. There are about 5,000 developments from that group. However, additional cases that come back from development and are completed total roughly an additional 13,000, annually. The disparity between these totals is that some of these cases are returns from previous months or years. Approximately ten (10) percent of all cases will be re-reviewed at some time in the future”.[12]

Optional LMSA, NFMSA

The SOW contains a section related to Liability Medicare set-asides (LMSA) and No-Fault Medicare set-asides (NFMSA). The RFP basically leaves the door open to the possibility of LMSAs and NFMSAs at some future point. Specifically, in pertinent part, the RFP documents state: “Optional Non-Group Health Plan work, inclusive of LMSA and NFMSA, may (or may not) be exercised based upon submission receipts, unrealized legislative Acts, or regulatory and CMS policy changes. Optional Non-Group Health Plan work, inclusive only of LMSA and NFMSA is not expected to be exercised sooner [than] Option Year 1.”[13] As noted above, Option Year 1 is noted as April 4, 2024 – April 3, 2025.[14]

In regard to this section, many will recall, back in October 2022 CMS’s future medicals proposals were withdrawn. These proposals were anticipated to focus, in main part, on LMSAs. The notice withdrawing the proposals did not contain any information regarding if, or when, CMS intended to revisit the issue of future medicals in relation to liability and no-fault cases. Currently, there are no formal LMSA or NFMSA submission or review guidelines in place. Without reading too much into the referenced timeframes stated in the RFP in terms of CMS intentions, the above stated timeline is interesting in that it may possibly give at least some sort of glimpse into when CMS may look to take up the issue again. Of course, we will simply need to monitor if, and when, CMS may decide to revisit the liability future medicals issue.

Other points

In addition to the SOW, CMS’s RFP package includes other documents of note which can be accessed using the link at the beginning of this article. For example, and interestingly, CMS included a copy of their Workers’ Compensation Case Control System (WCCCS) User Guide (Version 6.3, January 20, 2022). At a very high level, the WCCCS is the system that the WCRC works in to set up, price, and track WCMSA cases.[15]

While the full analysis of the WCCCS is beyond the scope of this article, it is an interesting technical resource for those interested in gleaning some additional WCRC operational insights. Of note, the WCCCS User Guide also appears to have included additional functionality for the WCRC to manage and the CMS Regional Offices to track “Non-Submission” cases.[16] This appears to have been implemented to facilitate review and potential enforcement of CMS’s recent addition of Section 4.3 to the WCMSA Reference Guide. Very generally, in Section 4.3, CMS notes, in part, that they view non-submit and evidenced based medicine MSA (EBMSA) arrangements as “a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement” and indicates that they may deny medical services to the full amount of the settlement, minus procurement costs, if these arrangements are used with regard to settlements which meet CMS’s WCMSA review thresholds.[17] Presently, it is unknown how effective CMS is at tracking non-submit MSA and EBMSAs, and whether the agency will develop a process to link Section 111 TPOC data with the WCMSA process. In the meantime, it appears that if CMS is made aware of settlements, it has the functional ability to track them within the WCCCS and potentially note the CMS Common Working File (CWF) accordingly.

Questions?

Verisk will continue to monitor developments on this front and provide future updates as warranted. In the interim, do not hesitate to contact the authors if you have questions.

WCMSAs – our cost-mitigation services can help reduce MSA amounts!

On the WCMSA front, we have been an industry leader for over a decade in helping clients reduce WCMSA costs through an array of different services.  These services, combined with our advocacy driven approach, have delivered results to help our customers save money and settle cases year after year.  In 2021, we delivered over $158M in proactive WCSMA cost-mitigation; over $5M in CMS rebuttal savings; and over $13M in Amended Review savings.  To learn more about our cost-mitigation options – including our new (and popular) Provider Outreach program – see our Verisk WCMSA Cost Mitigation Solutions.


Mark Popolizio, J.D.

Mark Popolizio, J.D., is vice president of MSP compliance, Casualty Solutions at Verisk. You can contact Mark at mpopolizio@verisk.com.

Sid Wong, J.D.

Sid Wong is vice president of policy, Casualty Solutions at Verisk. You can contact Sid at swong@verisk.com.


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[1] This RFP consists of several different attachments as follows: Solicitation, Offer and Award; Statement of Work WCRC (Feb. 15, 2022); Workers’ Compensation Case Control System (WCCCCS) User Guide (Version 6.3, January 10, 2022); Monthly Progress Report; Q and A Template, Cost Template;  Attachment J.7: Contractor Offeror Business Ethics, Conflict of Interest and Compliance Program Requirements (January 2019); Attachment J.8: Contractor/Offeror Conflict of Interest (October 2020); Attachment J.9: Past Performance Questionnaire; and WCMSA Reference Guide (Version 3.6, March 15, 2022).  You can obtain these documents here: https://sam.gov/opp/2db4f2411d2543b09f3917df26bf1f5e/view

[2] See, Solicitation, Offer, and Award, Section 9.

[3] See generally, Statement of Work, Section II, A (Scope). This section describes the WCRC more technically as follows:

The Workers’ Compensation Review Contractor (WCRC) shall, in accordance with CMS guidelines, evaluate Workers’ Compensation Medicare Set-aside Arrangement (WCMSA) proposals and project the future medical costs, including prescription drugs, related to the workers’ compensation (WC) injury, illness, or disease that would be otherwise reimbursable by Medicare. This future cost projection is known as the WCMSA. The contractor shall, upon reviewing complete WCMSA proposals, recommend the WCMSA amount for each proposal to CMS for final determination.

[4] Statement of Work, Section II B, Purpose.

[5] Solicitation, Offer, Award, L.4 Type of Contract.

[6] Statement of Work, Section III, Period of Performance.

[7] Solicitation, Offer, Award F.2 Period of Performance

[8] Solicitation, Offer, Award, Section B.1 Description of Services

[9] Statement of Work, Section II, A (Scope) and B (Purpose)

[10] Statement of Work, Section IV, B (Assumptions) point 2.

[11] Statement of Work, Section IV, B (Assumptions) point 2.

[12] Statement of Work, Section IV, B (Assumptions) point 2.

[13] Statement of Work, Section IV, B (Assumptions), point 3.

[14] See, Solicitation, Offer, Award F.2 Period of Performance.

[15] Section 2.1 of the WCCCS User Guide describes the role of the WCCCS more technically as follows:

The Workers’ Compensation Case Control System (WCCCS) is a reporting and tracking system for [WCMSA] cases.  WCCCS creates transactions via the Coordination of Benefits and Recovery System (BCRS) batch application in order to transmit Health Utilization Secondary Payer (HUSP) records to the Common Work File (CWF) located at CMS and provide the Lead Contractor with notification and information regarding the cases.  This is further outlined in Appendix F.  Workers’ Compensation Case Control System (WCCCS) User Guide (Version 6.3, January 20, 2022), Section 2.1.

[16] See e.g., Workers’ Compensation Case Control System (WCCCS) User Guide (Version 6.3, January 20, 2022), Section 6.3.1 (Creating a New Non-Submission Case) and 6.3.2 (Changing an Existing Case Type to Non-Submission).

[17] See, Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.8, November 14, 2022), Section 4.3. 

Section 4.3 of the WCMSA Reference Guide states as follows:

The Use of Non-CMS-Approved Products to Address Future Medical Care

A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.”

42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement.

As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.

Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.  CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.


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