By Rita Wilson, CEO, Tower MSA Partners
In today’s data-driven business environment, employers, carriers, third-party administrators, and other payers are inundated with data, both internally via claim analytics as well as external data received from vendor partners. Pharmacy alone with its drug interactions, duplicate therapy warnings, opioid utilization reports and polypharmacy alerts provides a plethora of data. Determining what data to use and aggregating data from different sources into metrics that show how you’re doing is the challenge.
Valuable data resides in the Medicare Secondary Payer (MSP) compliance/Medicare Set-Asides (MSA) process, but how can payers use it to reverse engineer strategies that can improve the outcomes of future MSAs? The first step is to define the metrics that reflect the performance your MSP/MSA program and identify the results to be achieved. As the renowned management consultant Peter Drucker famously said, “You cannot manage what you do not measure.” Claims professionals need to identify and manage the metrics that produce the best balance of care, cost and compliance.
Performance indicators include the average MSA allocation, average amount of successfully disputed conditional payments, re-review rates, and CMS approval rates. In addition, even though workers’ compensation pharmacy spend has decreased in recent years, pharmacy remains a significant cost driver and barrier to settlement,
Key metrics for pharmacy include the percentage of the CMS-approved MSAs that contain opioids, the percentage that include any pharmacy, and the overall cost of prescription drugs on a payer’s MSAs. When preparing to settle claims, payers are often shocked by the amount of the pharmacy allocation. When the drug spend is $1,000 a month, and the injured employee’s life expectancy is 20 years, the prescription drug allocation comes to $240,000. A pre-MSA analysis can identify cost drivers and determine if clinical interventions can be employed to reduce them.
But, why wait until settlement time? Payers can reverse engineer the information obtained through MSP compliance, provide it to their PBMs, and use many of the same clinical interventions to better manage claims proactively.
Several large employers have launched aggressive settlement initiatives to reduce aged pending and total incurred on claims involving Medicare beneficiaries or those close to becoming Medicare beneficiaries. Typically, these involved legacy claims with high pharmacy costs. A pre-MSA trigger decision-tree process identified inappropriate or overly expensive pharmacy and medical treatment that was not aligned with evidence-based guidelines. Claims teams then worked with the MSA partner and peer review company to determine and implement appropriate pharmacy and medical interventions that dramatically reduced the MSA allocations.
These employers then took the lessons learned and applied settlement best practices to managing ongoing claims, essentially reverse engineering the MSA triggers and interventions for current claims. This included providing key MSA metrics to their pharmacy benefit managers (PBMs). While some MSA and PBM metrics are similar, such as high doses of opioids and the use of brands versus generics, others differ because the MSA provider evaluates pharmacy through a Medicare lens.
What drugs will Medicare cover and under what conditions? The Centers for Medicare and Medicaid Services (CMS) does not cover the off-label use of certain drugs for some injuries or conditions that payers have been paying for years. For example, a workers’ comp insurance company may pay for Lyrica for an injured worker with a crushed foot, but that is not one of the diagnoses Medicare considers appropriate for Lyrica. Though Lyrica must be considered in settlement discussions, in this situation, it is not part of the MSA.
When issues are detected, the same clinical interventions (pharmacist-to-physician contact or physician peer review) used in the MSA process can be used to ensure the injured worker receives appropriate treatment and reduce costs to the claim. Payers can mitigate their eventual MSA exposure by managing the claim for settlement, and the PBM can help, but only if they know what will happen downstream.
Some payers tend to isolate MSP compliance, but it’s actually a continuation of claims management and critical to pre-settlement analysis. If payers have a high drug spend throughout the life of the claim, they are accepting a lifetime of spend at settlement. If they implement clinical interventions to reduce pharmacy usage early in the claim, they reduce its overall costs.
Take the time to evaluate your settlement and MSP compliance processes, especially MSAs. Once strategies that optimize your settlement processes have been developed, reverse engineer them to apply those strategies to day-to-day claims management processes. A claim that is well managed from the beginning is a claim that will settle more smoothly and easily.
About Rita M. Wilson
As CEO of Tower MSA Partners, LLC, Rita Wilson oversees all business development, sales, marketing and operational activities, IT systems development, and identifies new product offerings in support of Medicare Secondary Payer Compliance.
Wilson gained a wealth of expertise in information technology solutions, process driven workflow and metrics, and data analytics while holding leadership positions in pharmacy software development, pharmacy benefits management and workers’ compensation managed care companies for more than 20 years.
Prior to co-launching Tower MSA Partners in 2011, she founded and ran Select MRI, LLC, a diagnostic company, and Speedy Re-employment and Medicare Set Asides, an MSP compliance company. Previously, Wilson built out the operational and technology model for another startup, DirectCompRx, Inc., a subsidiary of Fiserv, Inc., ultimately becoming its CEO.
Before moving into the workers’ compensation industry, Wilson spent 15 years in software development for retail pharmacy and PBM serving as Director of Research and Development for QS/1 Data Systems. Wilson obtained a Bachelor of Science degree, summa cum laude, from Presbyterian College in Clinton, SC and completed graduate studies at Converse College in Spartanburg, SC. She has served in member and/or board of director capacities with the American Society for Automation in Pharmacy (ASAP), the National Council for Prescription Drug Programs (NCPDP), Health Level 7 (HL7), the National Council of Self-Insurers (NCSI), and the National Alliance of Medicare Set Aside Professionals (NAMSAP).
Wilson is an active member of the NAMSAP, serving as a member of its Board of Directors and Executive Committee since 2016, as Treasurer in 2017, and as President in 2018. She can be reached at 888.331.4941 or Rita.Wilson@TowerMSA.com.