The Centers for Medicare and Medicaid Services (CMS) has released the Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (Version 3.9, May 15, 2023).
As outlined more fully below, CMS has made various updates to different aspects of its WCMSA process. Perhaps most significantly, CMS removed the maximum time limit for eligibility regarding its Amended Review Process which will now provide parties with additional opportunities to use this process going forward to potentially reduce prior CMS WCMSA counter-higher approvals for qualifying cases. In addition, CMS provides new information regarding frequency calculations for intrathecal pumps, spinal cord stimulator, and peripheral nerve stimulator replacements.
The below provides an overview of the Version 3.9 changes, including special focus on the potential impact of CMS’s Amended Review changes and its clarifications regarding intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacement frequency calculation. In addition, information is provided on our “Second Look” service which can help you take advantage of CMS’s Amended Review process.
Summary of Updates
CMS lists the updates made in Section 1.1 of the new Reference Guide as including the following:
- All WC letters currently signed with [CMS’s] Director of Financial Services Group name and signature image have been updated to reflect the current CMS customer service contact information (Appendix 5).
- The CMS Regional Offices are no longer responsible for approving initial determinations. Process language and contact information have been updated throughout the guide (Sections 9.0, 9.4.6, 9.5, and 18.0, and Appendix 5).
- Clarification has been provided regarding intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacement frequency calculation (Section 9.4.5).
- The maximum time limit for eligibility has been removed from the Amended Review process (Section 16.3).
- The 94585 ZIP code has been added to the Walnut Creek Medical Center in the table listing major medical centers (Appendix 7).
- The CDC Life Table link was updated (Section 10.3).
Amended Review – Time limit removed
By way of background, CMS introduced the Amended Review process in 2017 which, in general, allows parties a one-time request to submit new medical documentation to adjust a prior WCMSA approval for cases meeting the Amended Review requirements. Prior to CMS’s newly announced change, the maximum time limit was six years. Now, as noted, CMS has removed this limit thereby allowing the parties to use this process if the conditional approval is at least 12 months prior to the request for the Amended Review.
From a practical claims handling standpoint, this a significant and much welcomed change which potentially opens new opportunities to settle out older claims where a CMS approval or counter-higher caused a settlement to stall. With this new update, now may be an opportune time to review any claims with a CMS approval on file, which did not settle, but shows reductions in treatment costs or changes in the claimant’s treatment regimen.
Generally, opportunities to leverage the Amended Review may exist if the file shows:
- Surgeries or procedures for implanted devices have occurred after the original WCMSA approval
- Reductions or changes in medication resulting in less monthly spend
- Reserves have reduced over time
- Treatment has stabilized and reduced
To review CMS’s Amended Review criteria in full, see the information contained in the endnote to this sentence.1
CMS amends their calculation to increase the frequency of intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacements in WCMSAs
As noted, CMS has also made what they label as “clarifications” regarding intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacement frequency calculation (Section 9.4.5). By way of background, prior to the release of WCMSA reference guide version 3.9 CMS historically calculated the placement and revision frequency of intrathecal pumps, spinal cord stimulators, and peripheral nerve stimulators by dividing the injured worker’s adjusted life expectancy by 7 (or 9 years for rechargeable devices) and rounding down.2 For example, an individual with a 24-year life expectancy would expect CMS to include one placement and two replacements in their WCMSA. Now, per CMS’s Version 3.9 updates, if an intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator has not already been placed, CMS will assume that the device will be placed within the first year following settlement.3
In terms of practical claims impact, this means that CMS adjusted their calculation to subtract one year from the injured worker’s life expectancy for device placement before dividing the remaining whole number by 7 (or 9 years for rechargeable devices) and rounding down to determine the revision frequency.4 Therefore, CMS is leveraging the assumed placement in one year to potentially increase the number of intrathecal pump, spinal cord stimulator, and peripheral nerve stimulator replacements in WCMSAs. Using the same 24-year life expectancy per above, the WCMSA will include one placement and three replacements when applying the new calculation.
Please do not hesitate to contact the author if you have any questions.
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