Medicare Parts C & D Have Entered the Work Comp MSA Chat  

On August 1, 2024, the Centers for Medicare & Medicaid Services (“CMS”) issued updates to the Workers’ Compensation Medicare Set Aside Reference Guide & Self-Administration Toolkit. These revisions highlight Medicare Part C & D’s encroachment upon Workers’ Compensation Medicare Set Aside compliance and administration.  

Workers’ Compensation Medicare Set Asides (“WCMSAs / MSAs”) are a unique creature of federal compliance where state workers’ compensation law intersects with federal regulatory and agency policy. An MSA is a determination of anticipated post-settlement medical expense and prescription drug needs related to the underlying workers’ compensation injury and otherwise covered under Medicare. MSA funds are “set aside” from a workers’ compensation settlement to pay for treatment related to the injuries associated with the workers’ compensation claim to prevent a cost-shift to the Medicare program. Funds from the MSA must be appropriately exhausted prior to Medicare paying for related care. 

When most think of Medicare, they picture the classic red, white, and blue card with the Department of Health and Human Services logo in the left-hand corner. However, this depiction only encompasses “traditional Medicare.” For years there’s been a gradual increase in the inclusion of Medicare Part C and Part D in Medicare Secondary Payer (recovery and MSAs).  

Medicare’s Alphabet Soup: A Brief Primer on Medicare Coverage 

Since 1965, Medicare has provided federal health insurance coverage for people aged 65 years or older and for younger beneficiaries who have a qualified disability. Medicare Part A covers inpatient hospital care and Part B provides coverage for outpatient treatment. Together, Medicare Parts A & B are often referred to as “traditional Medicare.”  

Since traditional Medicare can be limited with respect to coverage, an option for Part A/B enrollees is Medicare Advantage – otherwise known as Medicare Part C. Part C has been around since 1997 and unlike traditional Medicare, Part C plans are administered by private insurance companies (think United Healthcare, Humana, Blue Cross/Blue Shield, Aetna, etc.). As of 2023, over half of eligible Medicare beneficiaries were enrolled in a Part C plan. The advantage (pun intended) of a Part C plan is that it covers additional services that traditional Medicare doesn’t, like vision, hearing and dental.  

With the passage of the Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003, Medicare Part D became an option for Medicare beneficiaries to cover prescription drugs. Like Part C, Part D plans are administered by private insurance companies 

Medicare Part C & D Make their way to Medicare Secondary Payer Recovery & MSAs  

In 2009, CMS began requiring costs related to Medicare Part D-covered prescription drugs to be included in MSAs. In 2012, the 3^rd Circuit allowed for a Medicare Part C plan to recover under the Medicare Secondary Payer (MSP) private cause of action. See In re Avandia Mktg., Sales Pracs. & Prod. Liab. Litig., 685 F.3d 353 (3d Cir. 2012). Since then, other courts have lined up behind this decision. Medicare’s Prescription Drug Benefit Manual has been updated to include additional MSP coordination of benefits and recovery responsibilities for Part D plans. In a CMS memo dated June 13, 2024, upcoming changes were announced with respect to MSP data-sharing enhancements with Part D plans.   

The above examples are highlights and not intended to be an exhaustive tome on the intersection between MSP and Medicare Part C and D. Point being, there has been an increase in recovery and coordination of benefits around MSP and Part C and D. With the recent updates to the WCMSA Reference Guide and Self-Administration Toolkit, there’s an expanded focus on Part C and D considerations in MSAs.  

Updated Reference Guide 

On August 1, 2024, the Centers for Medicare & Medicaid Services (“CMS”) issued an updated (v4.1) Workers’ Compensation Medicare Set-Aside (WCMSA). In it, the agency has revised the guide “with details about WCMSA coordination with other health insurers…” i.e., Medicare Part C and D prescription drug plans. See WCMSA Reference Guide, v4.1, Sec. 1.1.  

The update, found in Sec. 4.1.3, reads in full:  

“A WCMSA is still recommended when you have coverage through other private health insurance, the Veterans Administration, Medicare Advantage (Part C), or Medicare Prescription Drug Program (Part D). Other coverage could be canceled or you could elect not to use such a plan. A WCMSA is primary to all Medicare coverage related to your settled illness or injuries and must be exhausted before using other Medicare benefits on your WC illness or injury. CMS notifies Part C and D plan sponsors that a WCMSA has been approved and instructs plan sponsors to conduct Medicare Secondary Payer (MSP) investigations. However, CMS does not relay WCMSA details to plan sponsors. Instead, CMS instructs plan sponsors to seek WCMSA coverage details from the WCMSA administrator as part of the plan sponsor’s investigation. When possible, Part C and D plan sponsors are required to avoid paying for expenses that should be covered by a WCMSA. When a settlement is reached, the settlement details dictate who is responsible for ensuring Medicare (Parts A, B, C, and/or D) is repaid for any conditional payments associated with the WC illness or injury. If the settlement does not identify funds for past debt, CMS considers those debts up to the date of settlement to belong to the WC insurer. Recovery may be sought from any party receiving inappropriate payment on behalf of the beneficiary. The administrator must provide details concerning treatments and medications used exclusively to treat a related illness or injury to the plan sponsor so the sponsor may avoid making primary payment in the future.” 

There is a lot to unpack in the paragraph above, but the big takeaways and questions are as follows:  

• Medicare recommends an MSA when Medicare Part C & D is involved 

• An MSA is primary to Medicare Part C & D 

• Medicare provides Part C and D plans notice that an MSA has been approved (when voluntarily submitted) and instructs the plans to seek MSA information from the MSA administrator and the plans are required to avoid paying for expenses that should be covered under the MSA 

• Notably, “CMS does not relay WCMSA details to plan sponsors.” Why not? In the future will they when MSA data is required via Sec. 111 reporting?  

• Medicare indicates the settlement dictates who is to pay for conditional payments (inclusive of Part C & D past payments), and if it does not dictate such information then Medicare presumes the workers’ compensation payer has conditional payment responsibility.   

• As we know, the Commercial Repayment Center (“CRC”) recovers against the primary payer in situations where Ongoing Responsibility for Medicals (“ORM”) existed. If a settlement, i.e. Total Payment Obligation to Claimant (“TPOC”) occurs following ORM and conditional payments are not identified by the CRC, then the BCRC has the opportunity to seek recovery against the claimant beneficiary.  

• Can the above language be utilized by a beneficiary in support of post-settlement disputes / appeals with the BCRC in the event a settlement does not outline responsibility for conditional payments? Did CMS only mean for this to be applicable to Part C / D plans?  

• An MSA administrator must provide details concerning treatments and medications  

• Why isn’t the MSA or the annual attestation information shared with Part C / D plans?  

Updated Self-Admin Toolkit 

On August 1, 2024, CMS also released an updated version (v1.6) of the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs) [“Self-Admin Toolkit”]. This (now 32 page) document issued by the agency offers guidance to a claimant who chooses to self-administer their MSA and covers areas such as establishing a bank account, reviewing and paying bills, record keeping and submitting annual attestation reporting.  

Notable Changes in the Toolkit 

Reimbursement to and Coordination of Benefits with Part C & D Plans  

In Sec. 4, “Using the Account”, there is new language that indicates, “[t]he WCMSA account may also be used to reimburse Medicare for payments on treatments that should have been covered by the WCMSA after the date of settlement.” This language should be read in conjunction with provisions in the same section associated with Medicare Parts C & D coverage. 

Historically, CMS’ conditional payment recovery contractors, the Benefits Coordination & Recovery Center (“BCRC”) and Commercial Repayment Center (“CRC”), which seek recovery for Medicare Parts A & B (i.e., “traditional Medicare”) conditional payments, have only sought recovery against a beneficiary or primary payer for Medicare conditional payments made prior to the date of settlement. Based upon this author’s analysis, this reimbursement provision is simply guidance to clarify and support the ability for reimbursement to a Medicare Part C or D plan from the MSA as those entities do not possess the same technical capabilities to coordinate benefits post-settlement (as traditional Medicare does).   

Sec. 4 goes on to add language relative to Medicare Part C and D coordination of benefits vis-à-vis an MSA as follows:  

“CMS will tell your Medicare Advantage or prescription drug plan that a WCMSA has been approved. Insurance plans are not given specific information about treatment and medications that should be covered by the WCMSA. You must tell your insurance plan sponsor any details concerning treatments and medications used exclusively to treat a related illness or injury, so they can avoid making primary payment in the future. CMS requires your plan to contact you or the administrator of your WCMSA to find out which expenses are covered by your WCMSA. The plan must avoid paying for expenses that are included in the WCMSA. The plan has a responsibility to recover any payments it made that should have been paid by the WCMSA. If you do not respond to your plan’s investigation efforts, your coverage may be delayed or cancelled. If you are enrolled in a Medicare Advantage or prescription drug plan, please contact your plan to discuss your WCMSA, if you have not already done so.” 

The above procedures raise the question of why additional MSA details are not provided to Part C & D plans, including attestation information. Regardless, it would behoove an injured worker to opt for the services of a professional administrator to assist in this complicated post-settlement coordination process with other healthcare plans.  

Attestation Required in Instances of Parts C & D Enrolment  

Attestation is the process whereby a self-administering claimant or their administrator submits reporting to CMS attesting to appropriate expenditure of the MSA. This reporting is required on an annual basis or in the event of a temporary depletion or permanent exhaustion of the funds.  

Sec. 8 of the Toolkit adds clarifying language with respect to Part C & D coverage: “This attestation is required annually, even if you are enrolled in a Medicare Advantage or prescription drug plan. You should also contact your plan to discuss any changes in medication or treatment that should be covered by the WCMSA.”  

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Author Bio 

About J29 

J29 is a women-owned business that offers Medicare Secondary Payer (MSP) compliance services providing Medicare Set Asides (MSAs), conditional payment / lien services and related solutions to all workers’ compensation stakeholders – including carriers, self-insureds, third-party administrators, and attorneys. 

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