By Daniel M. Anders, Esq., MSCC, CMSP, Chief Compliance Officer, Tower MSA Partners
If you search for commodities online, you’ll find such items as crude oil, coffee, gold, wheat, cotton, corn and sugar. What you won’t find are Medicare Set-Asides. While I point this out jokingly, the reality is that some work comp payers treat all MSAs like sugar, interchangeable.
The result is that payers may consider the price to prepare the MSA report rather than its value as a tool for a cost-effective settlement. What do I mean by this? Let’s take a quick example of how value quickly replaces price.
Value Over Price
A payer chooses between MSA Company #1 that charges $1,000 for an MSA, and MSA Company #2 that charges $2,000 for an MSA. The payer considers an MSA to be a commodity and picks MSA Company #1.
Yet that company prepares an allocation for $100,000, whereas the second one would have prepared it for $50,000. The $50,000 difference could result from MSA Company #2 having better MSA writers, a more robust quality assurance process and an allocation methodology which favors exclusion rather than inclusion of uncertain future treatments.
The point is not that the $1,000 vendor has the weaker MSA program but that the MSA price does not reflect the value of the MSA. MSA value is inherent in how it is developed and utilized as a settlement tool.
MSA Evaluation and Metrics
Payers need to learn how to evaluate the value of the MSA. Is the current provider coming in too high on their MSAs, potentially costing the payer thousands of dollars more than they should? Are cases not settling because of MSAs that can be lower?
Evaluation of the MSA company should be done at the report level and through key indicators of success. At the report level, the payer should look beyond the dollar amount of the MSA.
Too many payers look at the MSA’s dollar amount and decide, based on that amount, whether a case can settle. This is where you need to open the report. Look especially at the table of medical treatment and medications. Are the body parts listed the ones you accepted as compensable? Are the medical treatment and medications allocated consistent with your expectations? If not, these should be addressed with the MSA provider. It should welcome such inquiries and be prepared to defend why specific treatments and medications were included in the MSA.
Your MSA provider should provide you with regular key indicators of success. Such indicators may be the average MSA amount, the percentage of MSAs with prescription medications, development letters received post-submission. Is the company submitting re-reviews to the Centers for Medicare and Medicaid Services when the MSA returns higher than expected? There should be year-over-year trends to demonstrate success or problems with the program.
In 2022 CMS released metrics around the MSAs it reviews. It provided such metrics as average MSA amount and average prescription drug amount. How does your program measure up against these CMS averages? If you are at or above these averages, you are likely over-allocating your MSAs.
Value Beyond the MSA
The preparation of the MSA report should mark the beginning, not the end, of the MSA company’s involvement in ensuring the MSA will facilitate a claim’s settlement. It should be the beginning of addressing future medicals and how the MSA can effectively be incorporated into a complete claim settlement. Beyond writing the MSA report, the company should provide consultation, intervention and closure services. This is the true mark of an MSA partner whose interests lie in settlement.
In a perfect world, once the MSA is written, there are no further questions, and the case settles easily. However, the reality is that writing an initial MSA report often leads to identifying clinical matters that must be addressed before settlement. This is especially true if the MSA meets the threshold for CMS approval.
For example, a possible surgery that is no longer viable was mentioned in the medical records. In that case, a recommendation may be to obtain a statement from the treating physician that confirms the surgery is no longer a reasonable treatment option. The last treatment date may need to be confirmed if medical care was left open-ended. There may be a need to make sure CMS understands what body parts are accepted and which are denied to avoid having the cost of inappropriate treatment added to the allocation.
A payer should expect their MSA partner to alert them to any problems along with options for addressing them. In some cases, a risk analysis should be conducted so the payer can weigh the value of acting on the partner’s recommendations versus proceeding to settlement without taking future action.
The bottom line is that you should expect prompt and expert consultation to include answers to your questions about the MSA and its impact on settlement.
A company may offer options and recommendations, but do they offer to execute and stay involved? Besides providing consultation, the MSA partner should be willing to act on the recommendations which are in its power to act upon. Reaching out to a treating physician to confirm the last treatment date or working with the adjuster and defense attorney to provide draft language for the doctor to sign are actions an MSA provider can take.
Besides communication with the treating physician, there could be a conference call with the adjuster and defense attorney to discuss settlement strategy. Sometimes, MSA partners speak with the injured worker to explain the MSA and how it works. These actions make a difference in whether the MSA can facilitate the settlement of the case.
Consultation and intervention are the drivers that lead to case closure through settlement. Again, the MSA company should be a partner in bringing the claim to closure. In many cases, this means obtaining CMS approval of the MSA and identifying and working with structured settlement professionals and MSA professional administrators along with reviewing settlement terms. The MSA partner should make itself available to address any matters through the point of final settlement.
An MSA partner should understand that it is in the settlement–not the MSA–business. A payer should know that an MSA is not a commodity …. all MSAs are not interchangeable. There are fundamental differences among MSA companies. The price of the MSA should not be the main factor in choosing one. Instead, look at how the company prepares its MSAs and the key indicators of success it provides. Also, does it go beyond just writing the MSA and includes consultation, intervention and, ultimately, case closure – all for the price of the MSA? This is an MSA partner which has proven its job is to facilitate the MSA as a tool for settlement and that should be trusted with your MSA program.
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 statutes 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 20 years of experience working with employers, insurers, third-party administrators, attorneys and claimants, Anders consults with Tower’s clients on all aspects of MSP compliance. A respected subject matter expert, Anders regularly contributes to Tower’s MSP Compliance Blog.
Anders is a past president of the National Medicare Secondary Payer Network (MSPN) and current board member.
Tower MSA Partners provides Medicare Secondary Payer (MSP) services and Medicare Set-Asides (MSAs) with settlements in mind. Services include Section 111 Reporting, Conditional Payment Resolution, pre-MSA Triage, clinical and legal interventions, Physician Follow-up, and second opinions on MSAs. Based in Delray Beach, Florida Tower provides services nationally and successfully completes annual SOC 2 Type II audits. For more information, call 888-331-4941 or visit www.towermsa.com or https://towermsa.com/blog/.