On April 19, 2021, the Centers for Medicare & Medicaid Services (“CMS”) released an updated version of their Workers’ Compensation Medicare Set-Aside Arrangement (“WCMSA”) Reference Guide, version 3.3.
Section 1.1 of the WCMSA Reference Guide always lets you know “What’s new” in the updated Guide.
Most of the changes were fairly minor and will not have a significant impact on a structures professional.
There was one change in language, however, that a structures professional needs to know in some detail. That update has to do with how seed money in a structured settlement is calculated.
Summary of the Change in Language Regarding Seed Money Calculation
- In the previous version of the WCMSA Reference Guide, CMS used this language to explain how to calculate see money:
- “In a structured WCMSA, an initial deposit is required to cover the first surgical procedure or replacement and two years of annual payment.” (emphasis added)
- “The seed includes the cost of the first surgery, including all costs such as prescription drugs, physician fees, anesthesia fees and facility fees.” (emphasis added)
- It was standard in the industry to interpret the underlined language as meaning a deposit for the first surgical procedure, post settlement, no matter the body part that was being operated on. In other words, seed money has typically been calculated for only ONE expected surgery.
- Late last year, at the annual meeting of the National Medicare Secondary Payer Network, John Jenkins of CMS told the audience there that the phrases “first surgical procedure” and “first surgery” should actually include the first surgery, procedure or replacement for each body part addressed in the MSA.
- This assertion was quite the surprise to the attendees, and Mr. Jenkins received some vigorous pushback.
- In the new version of the WCMSA Reference Guide, the relevant language was edited to read as follows:
- “In a structured WCMSA, an initial deposit is required to cover the first surgery or procedure for each body part, and/or replacement and the first two years of annual payments.”
- CMS described this change in language as a “clarification” of policy rather than a “change” in policy. Given this, it is clear that Mr. Jenkins was correct – CMS always intended that seed money be calculated in this manner.
- It is unclear what effect, if any, this clarifying language should have on WCMSAs calculated prior to April 19, 2021. It is, however, quite clear that all WCMSAs going forward should use this method for calculating seed money. The net result, of course, is that seed money will typically be larger than before.
In addition to the change in the way seed money is calculated, CMS made the following changes to the Guide:
- The CDC Life Table link was updated;
- A link was added to the online Conduent Strataware tool;
- The table of Major Medical Centers for Missouri was updated; and
- Three “clarifications” were added:
- Pricing of intrathecal pumps should include the cost of refills.
- The consent to release form should include a full signature.
- Professional Administrators must contact the BCRC for case access in the WCMSA Portal IF they were not the original MSA submitters.
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