For much of the last 20 years zero pay meant zero MSA when asking CMS to review a case and approve a zero MSA allocation. But for the last 24 months or so that has predominantly not been the case with “legal zero MSAs” as many MSA vendors like to call them. By the way, you will not find the terminology “legal zero MSA” in any of the WCMSA reference guides. In fact, I am not sure how or why zero pay cases got tagged by the MSA industry as “legal” absent a court ruling.

Here is the closest the current WCMSA reference guide gets to describing a legal zero MSA, “CMS prices based upon what is claimed, released, or released in effect, the CMS must have documentation as to why disputed cases settle future medical costs for less than the recommended pricing. As a result, when a state WC judge or other binding party approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests. This shall include all denied liability cases, whether in part or in full. If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the entire dollar amount of the entire WC settlement. Medicare may also assert a recovery claim, if appropriate.”

Based on the guidance above it is safe to presume that a judicial ruling after a hearing on the merits that refutes the employer/carrier’s liability for future medical treatment will get you CMS approval of a zero MSA allocation. But anyone with much WC experience knows those cases are few and far between. Only a small percentage of WC claims are adjudicated and often it is the risk and cost of adjudicating a claim that drives it to settlement. Yes, sometimes cases are settled for nuisance value to avoid defense costs. Maybe those nuisance value settlements do not warrant an MSA allocation. But I often see totally denied cases settling for well into six figures. And those six figure settlements quite likely run afoul of the first two criteria in which CMS actually states an MSA is not necessary.

A zero MSA based on the following three criteria is commonly referenced as a “medical zero MSA” by MSA professionals but again you will not find "medical zero MSA" terminology in the WCMSA reference guide. The current WCMSA reference guide states a WCMSA is not necessary when all of the following criteria are met:

a) The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement);

b) There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare’s detriment; and

c) The individual's treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.

Keep in mind that CMS states all of the above criteria must be met for an MSA not to be necessary. Many WC jurisdictions require a settlement allocation to close a benefit category (i.e. future medical) so that requirement alone could violate the first criteria. And anyone with much WC experience knows the difficulty of obtaining the report prescribed above from most treating physicians. Nevertheless, meeting the three criteria above is the most likely way to get CMS approval of a zero MSA allocation based on my experience over the last 15 years involving hundreds of CMS submissions.

I welcome any feedback from WC and MSA professionals who have had significant experience getting CMS approval of zero MSAs within the last two years. I can tell you that I have had exactly two zero CMS approved zero MSAs in the last 24 months. One of those cases had a medical record to support a zero MSA and the other case had an ALJ decision refuting liability for future medical treatment. I am sure many of you have seen zero MSAs approved in the last 24 months. There are always those exceptions and those cases that sneak through the WCRC/CMS typical review protocol.