What is a “Non-Submit” or “Evidence-Based” MSA?
Medicare Set-Asides are a specialized product where Medicare has set forth a special process. The general idea is that an MSA will pay for medical care related to sued-for injuries so that Medicare doesn’t pay. But what happens when the MSA industry decides it wants to cut Medicare from the approval process?
Medicare says no.
But what is a Non-Submit Medicare Set-Aside (NSMSA) or Evidence-Based Medicare Set-Aside (EBMSA)? Both are future medical allocations where carriers are cutting Medicare from the MSA process. These allocations usually suggest a lower MSA amount that Medicare likely would reject. These allocations may indemnify the claimant or plaintiff if Medicare refuses to pay for care; however, these allocations can similarly refuse to pay for care. We often consider them a trade: the claimant trades one insurance carrier for another – with even less ability to take legal action.
Medicare’s disagreement was always obvious, but never stated until now. Medicare released its Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide on January 10, 2022, with a brand-new section that clearly states Medicare’s disagreement with NSMSAs and EBMSAs. Section 4.3 reads:
A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. 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 will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
So, CMS sets out saying these are not CMS-approved. And it continues saying the repercussions for using one: Medicare will not pay for care. If you are a plaintiff or claimant’s attorney, you may want to ask yourself what’s the point of one of these non-MSAs?