March 21, 2018

Deborah Watkins: Survey Says! 92% of Companies Lack Confidence Adjusters Can Manage MSP Compliance

By: Deborah Watkins, CEO, Care Bridge International

Deborah WatkinsAre you concerned about adjusters having the necessary knowledge and skills to properly manage Medicare Secondary Payer (MSP) compliance? You are not alone! The time for a data-driven, analytic-powered approach to compliance is now. Today’s industry leaders and early adopters have already begun embracing this method. An analytic-powered approach uses high-quality data and strong algorithms to augment human decision-making in the process, removing the burden of compliance from the adjusters’ desks.

Medicare Secondary Payer
Medicare was implemented in 1965 as the primary payer for medical claims involving Medicare beneficiaries not covered by workers’ compensation (WC), federal black lung, or veteran’s administration benefits. In 1980, to collect as much money for the Medicare trust fund through rule making, Congress enacted the Medicare Secondary Payer Act which expanded Medicare’s recovery to group health and non-group health plans or self-insurance for liability, automobile and no-fault. This includes all plans under the P&C lines that paid for any medical or personal injury, travel insurance, medical payments coverages (under commercial and personal property plans), as well as plans that typically do not pay for a bodily injury, such as treatment for medical professional liability, director, officer and errors/omission policies. Medicare has a right to both reimbursement for Medicare dollars paid, and recovery of payments that Medicare might make in the future where another primary plan exists.

Primary Payer Survey
We randomly and confidentially surveyed 36 non-group health primary payers, including carriers, third-party administrators, state funds and self-insured entities, to learn about their MSP compliance programs. This graph presents the results:


Companies surveyed agree 100% that MSP compliance delays or interferes with claims settlements. However, few have a formal monitoring process (4%), a fragmented vendor panel is used (71%), and few (30%) have a centralized program, such as an internal department or individual responsible for the oversight of MSP compliance. Most compelling is that 92% of companies surveyed do not have any confidence that their adjusters or claim handlers are capable enough to identify the risk or execute on MSP compliance at the time of settlement.

These results clearly reveal an absence of risk management or quality measures for identifying, managing or monitoring MSP compliance. Further, most payers do not establish their own internal best practices, relying instead on external vendor suggested best practices, which hold considerable variability. The overall results conclude that MSP compliance lacks transparency and control.

Data is Power! An Analytic-Powered Approach to MSP
Analytic-powered or data-driven decision management (DDDM) is an approach to governance, using data that has been appropriately gathered and verified to make business decisions. This technique has been around since the early days of the computer in the 1950’s when data was first mined and extracted for analysis. Today, business intelligence has advanced to offer technology based dashboards that display data in an organized form for analysis and decision making. These tools no longer require an expensive IT staff to gather and analyze information. The quality of the data and effectiveness of the analysis are the foundations for a successful data driven solution. Using data intelligence, primary payers can identify, manage and control MSP exposure and make informed decisions about managing MSP compliance risks.

The difference between an analytic-powered and a conventional approach to Medicare Secondary Payer is dramatic. An analytic-powered approach relies upon a robust claims data warehouse of real medical transactions for bodily injuries over time. A standardized digital platform with algorithms and tables is applied. Given the same exact set of medical claim variables, an outcome will be the same every time. Software offers tighter security standards, HIPAA (PHI/PII) protection with fewer hands touching the files. The process remains in the control of a payer’s management team and can stay within the confines of its IT structure.

Case Study Comparison
We analyzed the experience of a primary payer who sent the same set of medical records, for a given claim involving a Medicare beneficiary, to 5 different MSA preparers. The primary payer received five different MSA forecasts as follows:

MSA SamplePreparer SourceTotal MSA AmountKey Differences
MSA #1Certified Life Care Planner (CLCP)$83,742.36Future care includes possible complications
MSA #2RN, Medicare Set Aside Consultant Certified (MSCC)$68,563.50Uses incorrect, outdated fee schedule pricing
MSA #3Attorney Firm$76,582.36Incorrect Medications
MSA #4Claims Adjuster$39,879.42Does not include a medically necessary surgery, recommended by authorized treating physician
MSA #5Analytic-Powered$54,672.00Uses accurate, standardized platform and verified data points based on 423 claims having the same medical condition and variables

Conventional methods are subjective, non-standardized, and therefore variable in nature. The same medical variables or medical claims record information can be reviewed by five different people and interpreted differently by each person; the same variables are not reproducible or consistent. Today’s conventional methods increase the complexity of future care analysis and vendor dependency, and we can understand why adjusters are both challenged and frustrated by claims involving MSP compliance.

“Non-Group Health Plans and self- insureds are frustrated by the world of Medicare Set-Asides. This frustration has led to attempts to change the policy guidance in Congress, numerous meetings with CMS, and searches for new solutions. Some of the “Best in Class” have determined that the only way to secure superior outcomes is to control the process, bringing it inside their organizations and using data to secure superior results, thereby affording themselves an advantage in the marketplace.” Peter R. Foley C.P.C.U., C.I.C, Principal at C.L.A.I.M.S, LLC and former Vice President, Claims Administration, American Insurance Association.

A data analytics approach will not only drastically improve the quality, reliability and validity of an MSP program, but it will provide robust dashboard capabilities, which can remove the responsibility for MSP from the adjusters’ desks’, improving transparency, control and risk management that cuts the overall total cost of MSP compliance by nearly half. Companies who boldly seek to adopt and adapt new technologies to remain relevant in today’s economy will attract and retain the best talent today for tomorrow’s sustainability.

Our survey of 36 companies exposes the failure of the current state of MSP compliance and highlights the need for disruptive and revolutionary change. As future guidance for MSP compliance is released, there is a risk of greater complexity for primary payers and third-party administrators who rely on conventional practices. The future is here for a fully integrated, data-driven solution that is streamlined, efficient and compliant with the intent of the MSP Act that is more user friendly and mitigates risk at a lower cost.

About Deborah Watkins
As the CEO of Care Bridge International, an Insurtech company, Deborah Watkins has worked closely with the Centers for Medicare and Medicaid Services (CMS) and congressional staff advocating for improvements in the Medicare Secondary Payer program. During her career, Watkins received the 2010 Oracle Titan Award and Gartner 1to1 CRM Silver Award for technology implementation. She has worked closely with industry leaders, including NCCI to produce “Medicare Set Asides and Workers Compensation” presented at the 2014 Annual Issues Symposium and September, 2014, Research Brief. She has a Master of Science in Nursing and a Master’s in Healthcare Leadership (MBA/MPH) from Brown University and is a past board secretary for the National Association of Medicare Set Aside Professionals (NAMSAP). Watkins is an experienced clinician and insurance executive, having spent most of her career in the management of complex medical claims integrating technology and evidenced based clinical and technical processes. She was directly involved with the Centers for Medicare and Medicaid’s early pilot program for Medicare Advantage C, formerly Medicare + Choice. Deborah is a speaker and subject matter expert on issues pertaining to healthcare, Medicare, Medicaid, Medicare Secondary Payer, care coordination and Life Care Planning. She is also a Registered Nurse (RN), Certified Case Manager (CCM), Certified Registered Rehabilitation Nurse (CRRN), Certified Life Care Planner (CLCP), and Medicare Secondary Payer Consultant Certified (MSCC) professional.

About Care Bridge International
Care Bridge InternationalUsing data intelligence, Care Bridge International offers integrated technology based solutions for future medical valuations, medical reserve setting, claim settlements, litigation, care coordination, Medicare set asides and dually-eligible Medicare/Medicaid beneficiaries. For more information about our Analytic-Powered Outcomes® please visit,

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