Ever get close to settling a claim only to find the Medicare Set-Aside is a problem? Either the amount seems too low for the injured worker, or it seems too high for the payer. What do you do? How can you know if an MSA is appropriate for both sides and does not shift the burden of future medical to Medicare?
As much as you might seek a second opinion for a medical issue, getting an outside party to take a look at the MSA isn’t a bad idea — especially since the good ones will do it for free.
On its face, an MSA seems like it should be fairly straightforward. It’s an allotment of money to cover the injured worker’s medical needs for life. The idea is to make sure that the MSA portion of the settlement is available to cover future medical expenses, so they do not become the responsibility of Medicare to pay.
You might think it’s a simple matter of looking at the injured worker’s current medical expenses and extending them for the person’s expected lifespan, figuring in estimated inflationary costs. What seems like it should be a relatively simple process is anything but simple.
There are any number of things to include — or not — in an MSA. For example:
- Only costs related to the actual work injury should be included
- Only medications/procedures covered by Medicare should be included
- Only body parts associated with the claim and for which the payer has been paying should be included
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While those are among the basic issues to consider for MSAs, getting a truly accurate picture takes a thorough analysis and working with treating physicians to clarify ongoing treatment and medications.
For example, a careful review of medications might reveal that some are not specific to the accepted body parts. Or it may uncover the use of expensive, brand name drugs where generics could be substituted.
Looking at the provider’s notes might indicate recommendations for specific treatments that have may no longer be under consideration or even be totally inappropriate for the injured worker’s condition.
Among other potentially unnecessary cost drivers in MSAs are:
- Never filled or discontinued drugs
- Lag time in pharmacy price reductions, , e.g., lower price of a medication such as Meloxicam not reflected in MSA
- Use of inaccurate CPT codes and number of physician visits/year
- Urine drug screen test frequency and coding issues
Changes to the MSA
Finding unnecessary expenses is only part of the solution. It’s imperative to make sure that making changes or eliminating anything from the proposed MSA is done in a way that meets the approval of treating physicians — especially if seeking the approval from the Centers for Medicare and Medicaid Services.
While CMS approval for MSAs is not required by law, in many cases it is the prudent action to take to protect all parties. Those with expertise in the CMS approval process can save time and money.
An example is the inclusion of MSA funds for medications and/or treatments that are not valid; either they are not appropriate for the person or, more than likely, they are no longer recommended. To confirm/verify, MSA experts need to speak with the treating physician who made the recommendations.
Frequently, the issue has been overlooked and never deleted from the physician’s notes. Having an MSA professional speak with the provider often results in getting agreement and written confirmation that the medication/procedure is no longer needed. That alone can save thousands of dollars in an MSA.
In some cases, a letter from the MSA vendor to CMS is warranted. For example, a ‘Body Part Letter’ can clarify what conditions are or are not being paid for by the insurer. That can also result in thousands of dollars saved by removing medications or treatment associated with the wrong body part.
The expected lifespan of the injured worker is also key to developing an accurate MSA. The person’s injury and comorbid conditions may dramatically change his life expectancy. A 35-year old male, non-smoker in tip top shape has a longer life expectancy than a 35-year old smoking male with hypertension, diabetes, and a severe injury. Using a ‘rated age’ can reduce the amount of the MSA to account for the discrepancy.
Working with CMS
Getting CMS approval for an MSA can be hugely challenging for those not intimately familiar with the agency’s processes. However, MSA experts who work with CMS day in and day out understand what needs to be done. These professionals understand when to press on against CMS arguments and when it is a losing endeavor. It’s also imperative to stay abreast of the continuing updates from CMS, such as coverage, coding and individual state pricing data. Those who have paid careful attention to CMS responses for years have unique insights into what CMS will and won’t accept. MSA experts understand how to nuance the phraseology and provide the specific documentation geared to a more likely acceptance from CMS. Finally, MSA experts are able to fully explain and defend the MSAs they provide.
Injured workers are much more likely to settle their claims if they believe they have the appropriate support and funding they need for the future. While ensuring that is crucial, it’s also vital to provide a settlement — and MSA — that meets their needs without costing unnecessary dollars for payers.
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 the founder & lead trainer of Amaxx Workers’ Comp Training Center, which offers the Certified Master of Workers’ Compensation national designation.
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