MSA Procurement Cost Offsets

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Question: Is there a policy relating to procurement cost offsets relating to a workers compensation MSA? i.e. If the MSA is $50,000 and the normal attorney fee would be $7500 is the claimant allowed to only set aside $42500.00?

 

Answer: I would say there is some tension on that issue currently. According to CMS guidance (i.e., WCMSA Reference Guide and previous policy memos), it does not allow for a procurement cost offset to WCMSAs. The thought there is that the only appropriate use of MSAs is to pay for future injury-related care otherwise covered by Medicare. However, Medicare's own regulations, specifically 42 C.F.R. Sec. 411.37, seems to say differently. There, in defining Medicare's recovery rights, when its beneficiary is represented by counsel, it allows for a procurement cost offset to its recovery amount to take into account counsel's fees, costs and expenses incurred in assisting its beneficiary to resolve a claim, which is a prerequisite (as we discussed yesterday) to Medicare even having a right of recovery. That regulation does not specifically contemplate "conditional payments" or "future medicals." Instead, it contemplates Medicare's "recovery." I certainly believe a reasonable interpretation of that rule leads one to conclude that Medicare's recovery consists of conditional payment reimbursement for past medicals as well as MSAs for future medicals.

In short, the CMS policy is to not apply procurement cost offset to WCMSAs, but the regulations may lead you to a different conclusion.

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