May 21, 2018

Deborah Watkins: Algorithms and Analytics: A Comparision of Data Driven MSAs to CMS Reviewed and Approved MSAs

By: Deborah Watkins, CEO, Care Bridge International

Deborah WatkinsLast year we addressed the results of our non-group health payer survey findings regarding Medicare Secondary Payer (MSP) compliance programs. MSP compliance is excessively costly not only due to the added costs of compliance to a claim settlement, but additional costs are incurred due to delays in claim settlements and litigation. We proposed that the time had come for a data-driven or analytic-powered approach to compliance which leaders of the future will embrace. An analytic-powered approach uses high-quality data and strong algorithms to augment human decision-making in the process. Current practices to forecast medical care for Medicare Set-Asides are subjective and lacking in data science to validate exposure.

This year we re-assessed the current state of Medicare Secondary Payer compliance and we are reporting on the outcomes of a data driven approach.

Medicare Secondary Payer
Medicare was established in 1966 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, In an attempt to collect as much money for the Medicare trust fund through rulemaking, Congress enacted the Medicare secondary payer act expanding Medicare’s recovery to; group health and non-group health plans or self-insurance for liability, automobile and no-fault. Including all plans under those P&C lines that paid for any medical or personal injury, sweeping in 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 and officer and errors and omission policies. Medicare has a right to both reimbursement for Medicare dollars paid, and recovery of payments Medicare might make in the future, where another primary plan exists.

Primary Payer Survey In 2016 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. The table presents the results.

MSP Compliance Survey

Companies surveyed agree 100% that MSP compliance delays or interferes with claims settlements. However, few have a formal monitoring process (4%), most a fragmented vendor panel is used (71%), and some (30%) have a centralized program, such as an internal department or individual responsible for the oversight of MSP compliance. The most compelling result 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, controlling or monitoring MSP compliance. Further, most payers do not establish internal best practices, relying heavily instead on external MSA vendor suggested best practices.

Data is Power! An Analytic-Powered Approach to MSP
The difference between an analytic-powered and a conventional approach to Medicare Set Asides 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. It offers tighter security standards, HIPAA (PHI/PII) protection with fewer hands touching the files. It remains in the hands of a payer’s internal professionals and can stay within the confines of its IT structure.

Case Study Comparison
Conventional methods are subjective, non-standardization, and therefore variable in nature and lack transparency. 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.

A conventional, outsourced vendor compliance process takes approximately 4 weeks for the intial Medicare Set Aside and Conditional Payment Research and process is typically as follows:

MSA Process

If the records become “stale” more than 3-6 months at the time of settlement, additional medical records must be sent to the vendor and Medicare Set Aside updated and refreshed prior to CMS submission, adding an additional 2-4 weeks in delays, until the Medicare Set Aside is submitted to CMS. Upon acceptance of the MSA by CMS and receipt of determination, an additional 70 days pass before the parties assume liability for the MSA and negotiate a settlement. Often, upon CMS review, disputed/ denied body parts which are not compensable to the claim, or future care that is misaligned with state statutes is included in the future care costs, inappropriate prescription medication allocated over a life expectancy can thwart settlement efforts and entirely preclude the settlement of a bodiy injury claim.

An integrated, big data technology approach provides an Enterprise Risk Management platform streamlining and lowering costs:

MSA Pro Process

We compared over 300 CMS submitted cases to the results using our professional use software, MSA PRO. Those cases were a cross-section of 18 states and USLSH with settlements ranging from $25,000 up to a million.

The results show that overall, our data driven software produced results that on a median basis, were 3.3% less that the CMS approval rating; the average was actually higher at 8% less. These are significant numbers when one considers that MSA professionals, on average, completed these cases in two hours and at a fee that is nearly half of the marketplace of other MSA vendors.

We run algorithms (predictive modeling and business rules) on ONE BILLION workers compensation medical transactions to present a “basket of services” for the MSA professional to revise, if needed. The software performs the “grunt-work” while the MSA professional adds the finishing touches to the CMS submitted MSA.

The platform is standardized using diagnosis and treatment/ procedure codes, NDC codes for prescription drugs and additional standardization allows for measuring and monitoring of a claims and compliance program.

CMS Approved MSAs

A data-driven approach will not only drastically improve the quality, reliability and validity of an MSP program. It will provide the platform for a company’s internal program, offering transparency and control that will cut the overall total cost of MSP compliance by 50% or more.

“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.

Our MSA study shows that data- driven compliance reduces MSA completion time and greatly improves accuracy in forecasting future medical. Additionally, dashboard analytics offer risk analysis and important variables for claims decision-making that allow payers to share relevant information with their clients to improve claim outcomes. An integrated data driven model for MSP provides transparency, risk protection, cost savings and affords primary payers complete control. The future of MSP Compliance is here!

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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