CMS Counteroffers on Medicare Set-Aside Allocations

Medicare Set-Aside Blog on April 28, 2008
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MEDVAL has been tracking CMS counteroffers on MSAs for years now and recently we have noticed changes that deserve some attention. Currently, there is no formal appeal process for CMS counteroffers. If your MSA total is within 5% of what CMS believes it should be, the MSA is approved. Anything over 5% and you’re stuck with CMS’s logic and corresponding number. This is incredibly frustrating since CMS has published only guiding memos on how to properly allocate for future Medicare-covered expenses in an MSA. And with no formal appeal process, many unreasonable counteroffers cause settlements to stall or even cease settlement altogether.

Generally, CMS states it will not revisit a case until 5 years have passed. However, we have recently received an increase in requests to review CMS counteroffers for MSAs prepared by other firms who are simply not allocating properly or in accordance with widely-accepted CMS practice. Should you have a CMS counteroffer reviewed? It depends. Some of the recent counteroffers are so unreasonable that we have recommended going forward with an administrative ruling to be submitted to CMS for reconsideration. Insurance carriers are usually unwilling to pursue this path as it ends up costing more to ‘appeal’ than to simply accept CMS’s number.

But these counteroffers can have disastrous consequences including: 1) essentially holding insurance companies hostage if they want to settle a claim, and 2) windfalls to claimants who have no intention of getting the procedures CMS is requiring funding for. On top of that, unreasonable counteroffers lead to additional costs while parties obtain a Workers’ Compensation order to force CMS to back down, additional defense expenses, and ongoing indemnity to the claimant during the wait.

Overall, this recent trend in counteroffers and lack of formal appeal process is costing the insurance industry big money. While some of CMS’s counteroffers may be legitimate, some are simply careless. We’ve been noticing math errors that have resulted in thousands of dollars that went uncaught by the CMS reviewer. On top of that, there are counteroffers for treatments Medicare does not cover and allocations for 2.5 MRIs over a life expectancy. MEDVAL will keep you posted as we track more CMS counteroffers and trends. Questions? Send them to Ask Jen or call 1-888-SET-ASIDE.
*Contact us if you have an CMS counteroffer you would like us to review.*

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