White Paper Offers Alternative Approach to Handling Workers’ Comp MSAs

A newly released white paper suggests workers’ compensation payers forgo Medicare Set Aside (MSA) voluntary reporting. Conventional Set Aside practices, according to Care Bridge International, can greatly inflate costs to claims payers to the tune of almost double the cost of a claim.

“Medicare Set-Asides: What is the True Cost of Future Medical Care?” explores how the power of massive claims database analysis can lead to greater efficiency and cost savings.

A standard feature in settling workers’ comp claims within the past fifteen years, MSAs were created as a way for the Centers for Medicare & Medicaid Services (CMS) to obtain reimbursement from employers or workers’ comp carriers for work-related injuries requiring medical treatment. When older workers are injured on the job, they may already be Medicare-eligible. At the time a workers’ comp claim is settled, insurers and self-insured employers may be required to reimburse Medicare for payments it may have made for treatment of the work injury. According to the paper, “payers can substantially resolve their liability by setting aside funds as a part of the settlement.”

MSAs aren’t cheap. Workers’ comp claims payers put over $2 billion a year in Medicare Set Asides. The National Council on Compensation Insurance (NCCI) estimated MSAs represent approximately 45 percent of total settlement costs, with the average settlement including an MSA totaling about $200,000.

The NCCI also found that medication accounts for more than half of MSA costs.

Care Bridge analyzed the distribution of medical expenses in approved MSA reports and found that 68 percent of them contained opioids. Among MSAs including opioids, 79 percent utilize one opioid, 20 percent utilize two opioids and one percent utilize three opioids.

Many workers’ comp claims payers submit MSA reports as if they were legally required to do so. But submitted reports are not the only way to limit the claims payer’s financial liability, according to the report.

Care Bridge conducted a survey of 36 workers comp primary payers and found widespread dissatisfaction with the process. Rather than submit MSA proposals – which Care Bridge states excessively inflates claims costs and leaves payers worse off than if they never submitted a set aside forecast (proposal)– payers should consider the “non-submit” option.

The Florida-based data analytics firm analyzed more than a billion medical claims and MSAs that were reviewed and approved by CMS. Voluntarily submitting an MSA report for approval means the payer must comply with MSA mandatory medication forecast policies. In addition, the white paper noted that medication prices are set at “average wholesale prices”, which are not transparent and are arguably “subject to obscure manipulation”.

The firm’s data analysis found that MSA drug prices were 36 percent higher than actual drug costs.

The report also found that actual drug use patterns diverged greatly from MSA forecasts, which typically overestimated actual medical spend.

While the benefits seem pronounced, the white paper outlined the risk associated with non-submission. Medicare could deny future payments for treatment if the MSA is depleted faster than anticipated or CMS could pay and then seek out reimbursement.

Payers pondering a change in their MSA forecast submissions to CMS should consider using “a conventional MSA report for the relatively few medically complex claims and rely on a data-driven predictive system for the great majority of claims covered by Medicare regulation”, according to the white paper. These types of claims typically make up just 10 percent of claims subject to Medicare regulation. The paper suggests the rest can be settled with a submission using predictive analytics and post-settlement account administration.

“With the billions of medical claim transaction data available to carriers and payers, it is more important than ever for organizations to acquire the tools and technologies necessary to gain business advantage from data,” said Deborah Watkins, CEO of Care Bridge International and its wholly owned subsidiary, MSP Compliance Bridge. “We believe that property and casualty insurance companies need to understand and enable the insights available to them through the power of big data analytics for risk management and improved claims decision-making.”

Download the white paper: https://carebridgeinc.com/big-data-analysis-of-the-actual-costs-of-future-medical-claims-involving-medicare-secondary-payer-workers-compensation-medicare-set-asides/