CMS Rescinds Recent Changes to Review of Zero Allocations
Heather Sanderson
November 4, 2016

Last week, the Workers’ Compensation Review Contractor (WCRC) informally let the industry know that an internal quality review revealed that the WCRC was improperly applying CMS’ documentation requirements to the review of zero allocations in denied worker’s compensation claims. As such, additional documentation would now be required for the WCRC to issue an approval of a zero Medicare Set-Aside (MSA) allocation. Franco Signor reiterated its position that the CMS review process was never intended for fully compromised cases, but rather for commutation cases where future medical is being funded, and as such we confirmed that this new practice of CMS would not affect our recommendations for fully denied compromise settlements. For our prior blog, please click here.

Earlier this week, CMS issued an alert stating that the WCRC initiated these changes without prior notice to the industry. The notice stated: “CMS recently received inquiries regarding procedural changes in the way that CMS’ Workers’ Compensation Review Contractor (WCRC) reviews proposed zero-dollar Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts.  CMS determined changes had transpired without prior notification. Effective immediately, the WCRC will utilize procedures that were previously in effect.  CMS continually evaluates all policy and procedures related to WCMSA reviews and will publish any pending changes when or before they go into effect.”

This alert from CMS, without specifics surrounding the actual review policy, could be interpreted in two ways:  Because the internal quality review revealed that CMS’ long-standing documentation requirements were not being improperly applied by the WCRC, it was not completely clear whether the WCRC was keeping the stricter policy in place, or whether CMS was now rescinding the WCRC enforcing this stricter policy due to the fact the WCRC began implementing it without notice.

We have verbally confirmed with our sources at the WCRC that the WCRC will go back to its “old ways” in their review of zero allocations and that the stricter policy has been shelved. In other words, in a completely denied claim, a court order/treating physician statement will not be required in addition to proof of no payments made.  We are happy to see that CMS has ensured that this stricter policy would not be allowed to go into effect without prior written notice.


Heather Schwartz Sanderson, Esq., MSCC, CHPE, CLMP, CMSP

Chief Legal Officer