By Dan Anders, Chief Compliance Officer, Tower MSA Partners
If you ask the workers’ compensation payer community about the value of a Medicare-Set Aside or MSA, some might say, “An MSA is not valuable to us; it’s just something we have to do when we close a claim with a Medicare beneficiary.” Others see MSAs as barriers to settling claims, and another camp–perhaps more enlightened–understands that MSAs can pave the way to settlement.
How Perception Has Impacted CMS Submission of MSAs
In recent years, some workers’ compensation payers and attorneys have shied away from seeking CMS approval of MSAs. Some settle claims with the medical open, meaning the insurance company or employer continues to cover the injury related medical and pharmacy costs of the claim after they’ve settled the rest of it. Another group does not submit the MSA to CMS for approval, potentially leaving the injured worker at risk of future benefit denial or a Medicare reimbursement claim.
From the perspective of these payers and attorneys, the MSA costs will be too high. However, with careful coordination of settlement professionals, these costs can be contained. In fact, an MSA’s real value is to facilitate a settlement in a case where Medicare’s interest must be protected.
What Are the Facts?
MSAs are no doubt costlier than when they were introduced. They became more expensive when CMS started requiring the allocation of future pharmacy costs in 2006. Payers and attorneys have heard horror stories of $1 million MSAs, with drugs making up most of the costs.
However, high-dollar MSAs represent the minority of CMS-approved MSAs. Tower MSA Partners’ data show the median CMS-approved MSA amount in 2020 was $23,205. Also, only 40 percent of Tower’s CMS-approved MSAs included any prescription medications last year and there have been year-over-year declines in MSA costs even when medications are included.
No doubt, CMS MSA pricing and allocation methodologies can be problematic. They do not consistently recognize state statutory limitations to exclude care, such as utilization reviews. Also, these methodologies tend to allocate funds based on the worst-case scenario for a claimant.
Yet, they have their benefits. For example, CMS does not require medical cost inflation to be factored into calculations, so MSA allocations reflect current treatment and pharmacy prices. CMS also allows a portion of the MSA to go into an annuity, which usually provides a significant cost savings to the employer or carrier when compared to the cost of keeping the medical open.
Still, the MSA needs to cover the medical and pharmaceutical injury related costs for the employee’s life expectancy and that can be costly.
Making MSAs Facilitate Settlement
The MSA process is the time to review medical treatment on a claim and make sure that the medical records reflect current treatment, and that the treatment is evidence-based, appropriate, and compensatory. You’d be surprised what a careful clinical review will detect.
Good MSA providers find gaps in care that can indicate treatment has ended, treatment of unrelated body parts, discontinued prescriptions, and surgeries and other procedures that were discussed but don’t appear to be happening. Some injured workers are taking brand medications when generics are available. All these costs would need to be allocated in an MSA if not challenged through some kind of clinical intervention. These interventions can also improve care, especially when working with physicians to reduce the use of dangerous drugs like opioids, muscle relaxants, and benzodiazepines.
How can this be done without adding to the adjuster’s or defense attorney’s already full workload? An effective program to settle workers’ compensation claims with MSAs typically consists of the following:
Internal MSA Team: Because adjusters and defense attorneys have varied levels of knowledge and experience with MSAs, it is critical for a payer or its third-party administrator to have a dedicated team (or in smaller entities, individual) that is knowledgeable on MSA matters and can act as a resource for adjusters and defense attorneys in driving claims with MSAs to settlement.
MSA Partner: The true value of the MSA comes in facilitating a settlement of the case with a closure of medicals. This calls for an MSA partner who will not only draft the MSA, but will also identify cost barriers, mitigation opportunities, and then implement a plan to reduce those costs to obtain quick CMS approval.
Structured Settlement Broker: Once the dollar amount of the MSA is set, a structured settlement broker can work with the payer to determine how best to fund the MSA amount through an annuity that distributes a portion of the MSA over the injured worker’s life expectancy.
MSA Professional Administrator: The MSA professional administrator can step in during the settlement process to educate the injured worker and their attorney on the resources available after settlement through professional administration. Once an injured worker understands they can receive services like medical and pharmaceutical discounts, assistance navigating the healthcare system, and Medicare reporting services after their claim closes, they’re more likely to settle.
While MSAs have undoubtably become more complicated over the years, there is excellent value in settling a case and closing out future medical with a CMS-approved MSA. This is why so many payers have created internal teams and partnered with competent and experienced MSA providers that aggressively mitigate costs and foster collaboration among other settling parties to pave smooth paths to settlement with closures of medicals.
About Dan Anders
Daniel M. Anders, Esq., MSCC, CMSP, is an expert in Medicare Secondary Payer (MSP) compliance and Medicare Set-Aside (MSA) preparation. As Chief Compliance Officer for Tower MSA Partners, Anders oversees all aspects of regulatory compliance associated with the MSP status and local, state and federal laws. His responsibilities include ensuring the integrity and quality of Tower’s services and products, including its MSA program.
With 18 years of experience working with employers, insurers, third-party administrators, attorneys and claimants, Anders provides education and consultation to Tower’s clients on all aspects of MSP compliance. He presents at webinars and industry conferences, including WCI and the National Workers’ Compensation & Disability Conference & Expo. A respected subject matter expert, Anders writes articles, is frequently interviewed for insurance and workers’ compensation publications, and regularly contributes to Tower’s MSP Compliance Blog.
An attorney and certified Medicare Set-Aside Consultant, Anders joined Tower in 2016. He previously served as Senior Vice President of MSP Compliance for ExamWorks Clinical Solutions and has extensive litigation experience from his earlier position with the Chicago law firm of Wiedner & McAuliffe.
Anders is a member of the Illinois State Bar Association and president of the National Medicare Secondary Payer Network (MSPN), formerly the National Alliance of Medicare Set-Aside Professionals (NAMSAP). He has been involved in the organization for years, having served on MSPN’s executive committee for several years and co-chairing its Policy & Legislative Committee.
Anders earned his Juris Doctor degree from Chicago-Kent College of Law and his bachelor’s degree from Loyola University Chicago. He lives in the Chicago area.
About Tower MSA Partners
Headquartered in Delray Beach, Florida, Tower MSA Partners provides Medicare Secondary Payer services that focus on settlement optimization via pre-MSA intervention and cost mitigation.
Services include pre-MSA Triage, Medicare Set-Asides, physician peer reviews, drug utilization reviews, CMS submissions, medical cost projections, life care plans, conditional payments, and Section 111 reporting.
Tower leverages leading edge technology to proactively stage claims and works collaboratively with clients to identify issues and intervene to modify outcomes. Tower remains involved in the claims through final resolution, MSA and/or other settlement.
This model enables Tower’s clients to provide better care to injured workers, reduce claim and MSA costs, and obtain CMS acceptance of the MSA. For more information, call 888-331-4941 or visit www.towermsa.com or https://towermsa.com/blog/.