Medicare’s interests must be considered and protected in any workers’ compensation settlement. Future funding is accomplished through a Medicare Set Aside (MSA). Future prescription costs became part of MSA’s effective January 1, 2006.
A Centers for Medicare and Medicaid Services (CMS) memorandum, published May 2010 changes the way prescription drugs are included as part of a MSA for Medicare beneficiaries. The memorandum also altered the “rated age” verbiage as it relates to MSA’s.
Prescription drugs covered by Medicare Part D used for “off-label” conditions (a condition other than one approved by the FDA) and brand-name to generic substitutions are both affected by this change.
By definition: “For a drug to be covered by Medicare, thus included properly in a WCMSA, the drug should be prescribed for an outpatient use that is approved under the Federal Food, Drug and Cosmetic Act (21 U.S.C.A. S301 et seq.) or supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(B)(1) of 42 U.S.C. 1396r-8”.
The “memo” on this topic is very detailed and this blog only touches on some high points.
Eliminating “off-label” drug coverage under Medicare Part D, raises the potential for a reduction in settlement dollars. For example, drugs prescribed for orthopedic pain management may only be approved to treat pain for a completely different condition. Thus, in theory, these medications are no longer MSA covered expenses. Some specialized medications are extraordinarily expensive and substitution of another pain reliever could save thousands of dollars.
Submissions based on generic pricing where no generic is available will be recalculated by CMS at average wholesale pricing.
“Rated Age” certification must be included submission as follows:
“Our organization certifies that all rated ages obtained on the claimant, at any time during that individual claimant’s lifetime, have been included as part of this submission to the Centers for Medicare & Medicaid Services.”
Employers and Carriers involved in settlements with a MSA will save costs by making certain (to the extent possible) the prescribing physician allows generics and the medication’s period of use is named whenever possible. Absent these two points, it’s possible CMS will calculate the drug for lifetime use. For the same reason, be sure a rated age is obtained in cases of a reduced life-expectancy. (workersxzcompxzkit).
Remember, to keep up to date with changes related to WCMSA’s and know the criteria for use. Noncompliance carries potential fines so taking care to fund a WCMSA when indicated is important.
Author Rebecca Shafer, J.D.. Consultant, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
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WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php
TD Calculator: http://www.reduceyourworkerscomp.com/transitional-duty-cost-calculator.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
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