NCCI Release of Medicare Set-Asides and Workers Compensation 2018 Update

NCCI Release of Medicare Set-Asides and Workers Compensation 2018 Update

The National Council on Compensation Insurance (NCCI) released its updated Research Brief on Medicare Set-Asides (MSAs) and Workers Compensation earlier this month.  The initial study had been released in 2014 and considered data on CMS submissions that had occurred between September of 2009 and November of 2013. The recently updated report includes information from 2014 and 2015 submissions.

It comes as no surprise that the updated study concluded that CMS’ processing time had improved from the earlier study.  Based on this data sample, CMS’ average processing time was 60 days for submissions involving MSAs that were under $25,000.00, with a median processing time of approximately 18 days for MSAs that were under $200,000. In addition, approximately 30% of CMS submissions for MSAs under $100,000.00 were required to provide additional claim documentation. (Exhibit 4, page 7)

The study also looked at the differences between the submitted MSA proposals and the approved MSA proposals. Although approximately 90% of the submitted MSA during December 2012 and May 2014 were approved as submitted, this was attributed to a reduced degree of scrutiny given CMS’ need to clear out the claims backlog.  Excluding this period, the study concluded that CMS   requested an average 51% increase when the submitted MSA was under $25,000.00, and an average 6% increase when the submitted MSA was greater than $200,000.00. Prescription drugs accounted for about 50% of the larger MSA amounts.  CMS’ publications of review guidelines were credited with the improved 1:16 ratio of average approved to submitted MSAs in 2015.

 When it came to administering the CMS approved MSA funds, most of the MSAs were self-administered.  Given CMS’ recommendation in its updated Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide ( Version 2.6) that funds be professionally administered, it is reasonable to assume that  MSA accounts were not being administered correctly. Without proper administration of the MSA funds, there is no “safe harbor” that comes from funding an excessive  CMS determination.

CMS processing times for MSA reviews have improved since the initial NCCI study came out in 2014. The study, however, confirms the need to build additional time into the settlement process if CMS’ voluntary review is sought.  Furthermore, the study confirms CMS’ tendency to over -project. The arbitrary nature of CMS’ review process is also evidenced in the 90% approval of MSAs as submitted during CMS’ attempts to clear their backlog.

Since the CMS review process is voluntary, parties to a settlement should consider alternative methods for Medicare Secondary Payer compliance. The NuShield certified MSA projects future injury-related Medicare-covered treatment that is reasonably likely to occur in a claim. It is based on the treating physicians’ recommendations and Evidence-Based Medicine Guidelines.  The hold harmless and indemnification agreement, coupled with the assistance in the administration of the certified MSA funds provide parties with additional assurance that the NuShield certified MSA is appropriately funded.  There is no delay in settlement or overfunding of care with the NuShield certified MSA. Although the NCCI study references the  “safe harbor” that CMS review may provide, why take the unnecessary journey for a false promise?  More information regarding the NuShield certified MSA program is available upon request by contacting Kip Daniels or Barbara Fairchild at [email protected] or [email protected].

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