Most workers’ compensation practitioners agree: Medicare Set-Asides can be a pain in the neck. It takes time, resources and skill to create an MSA. In addition, any snag could result in a loss of money — for the injured worker as well as other parties involved.
The myriad of moving parts and high chance for error, along with getting approval from the Centers for Medicare and Medicaid Services are the reasons a specialized industry has arisen around MSAs as well as other components to Medicare Secondary Payer compliance. By understanding such things as when, how, and where to get an appropriate MSA and ensuring post-settlement assistance is available for reporting and follow-through, stakeholders can settle more claims and feel confident they are doing the right thing for injured workers and other parties involved.
Here are a few sobering, post-settlement, realities from a professional administrator that demonstrate why MSAs cause angst to so many:
- There were 51% more phone calls from Medicare on MSA administration in 2018, compared to 2017
- Medicare inquired on virtually 100 percent of lump sum MSA exhaustions
- Medicare checked in on 1-out-of-every-3 structured settlement exhaustions
- CMS is adding more technology and getting smarter about compliance every year, especially with the post-settlement administration of the MSA.
In other words, don’t expect the government to ease up on ensuring Medicare’s status as the secondary payer in workers’ compensation cases anytime soon. Quite the opposite is happening as Medicare becomes more intent on not only ensuring the MSA was accurately put together but that the funds are spent appropriately.
Here are appropriate questions you need to ask and what to look for.
When is the right time to obtain an MSA?
When an injured worker has reached maximum medical improvement. Someone who is about to have or just had surgery, or is changing medical providers is not an appropriate candidate because his medical situation is likely to change. The injured worker should have his medications and treatment stabilized.
How can MSA amounts be deemed sufficient for the injured worker but not excessive?
You want to make sure the injured worker has the funds he needs to live out a fulfilling life, but don’t want to spend unnecessary dollars. This requires working with an MSA partner willing to take a deep look into the injured worker’s situation, now and in the future. There may be some projected treatments and/or medications that are inappropriate and unnecessary. Things to consider are:
- Generic alternatives to medications
- Potential overuse of opioids
- Inconsistencies between medical records and prescription drug history
- Whether authorized medications are still being prescribed or used
- Medications that are unrelated to the occupational injury
- Planned surgery that the injured worker does not want or need
- Estimated costs for surgeries and other treatments that may be unrealistic
- Frequency of physician visits
- Rated age/life expectancy
- Evidence-based medicine; to ensure it is being followed
- What is clinical intervention and why is it important?
Identifying and clarifying these and other issues takes leg work. The MSA vendor must be willing and able to work with treating physicians and others to get the correct answers, as these are key to both saving money and protecting the injured worker.
This may include
- Physician follow-up
- Clinical oversight
- Peer-to-peer review, where another physician is brought in to work with the treating physician
- Addressing inappropriate care — another area where peer review is advantageous
There are situations, for example, when a particular medication is listed as being current but is no longer being prescribed. The solution is to have both the injured worker and the treating physician write statements specifying the date the medication ceased to be prescribed or used.
Another typical example is when a treating physician had discussed a specific treatment — such as a spinal cord stimulator, but later determined it was not necessary. The cost of a spinal cord stimulator can be in excess of $150,000. In that case, the MSA partner should seek a statement from the treating physician confirming the treatment is no longer necessary or reasonable.
What are indications of an effective MSA partner?
When considering organizations for partnerships, facts and figures tell the story. Some to look for include:
- CMS MSA approval rate
- Percentage of MSAs with prescription medications, especially opioids
- Percentage of cases settled
- Savings from clinical interventions
- Rate of development letters
- Average MSA approval amount
“These metrics determine the success or failure of an MSA program in limiting allocation amounts and facilitating settlement,” says Dan Anders, Chief Compliance Office of Tower MSA Partners. “Your MSA partner should be using these key performance indicators to drive the outcomes you want to see.”
Post-Settlement MSA Support
Just because the MSA has been developed and approved by CMS and the claim settled, does not mean things cannot still go wrong. Complying with CMS requirements — including reporting duties — is crucial. That’s why it’s just as important to have a post-settlement strategy set up before the claim is settled. If the injured worker unintentionally fails to adhere to CMS guidelines and the money runs out —
- They jeopardize their future Medicare benefits
- They may be forced to reimburse all the money that was misspent, up to the full settlement amount
- Their attorney(s) and/or others (including the adjuster/payer) may also be pulled back into the case, which can cause unnecessary burdens and work on everyone involved
Those in the best position to ensure things go smoothly after the settlement are professional administrators. These are neutral, third-party experts who handle all compliance and annual reporting for MSAs. Additionally, professional administrators establish a bank account for the injured worker’s future medical care and act as custodian — receiving the medical bills and paying them on behalf of the injured worker.
“There are a lot of things that happen in the settlement process that could confuse an injured worker,” said Marques Torbert, CEO of the leading professional administration company, Ametros. “Injured workers are worried about getting better. A professional administrator makes sure the injured worker has a support system and access to savings and support post-settlement while helping to keep them in compliance.”
A professional administrator should have extensive physician and pharmaceutical networks, which results in cost savings for the injured worker and extends the life of the MSA. Top-notch professional administrators demonstrate significant cost savings for injured workers while also protecting Medicare’s interests by maintaining the viability of the MSAs account over those workers’ lifetimes
Average Savings From Top Professional Administrator
- 63% on provider bills
- 28% on other medical expenses
- 50% with bill review adjustments
Many advocates for injured workers are finding that bringing in professional administrators during the settlement process can be extremely valuable. Because they are neutral third parties, they can serve as mediators for competing interests; such as carriers, and plaintiff and defense attorneys.
“Bridging the gap to settlement can sometimes be difficult,” says Torbert. “At the end of the day you have several stakeholders at the table, the only party that stays with the injured worker well after the settlement is the professional administrator. Being able to show the injured worker that they will be taken care of can help all parties come to a resolution.”
The benefits of professional administrators are such that CMS itself last year “highly recommended” injured workers consider using them for MSA administration.
Injured workers who have been in the workers’ compensation system for long periods are often hesitant to settle their claims due to fears of running out of money. An improperly developed or utilized MSA is one of the main reasons that fear can come to fruition. Having the right partners involved brings peace of mind to injured workers, as well as all parties involved in settlement.
Author Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .
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