Tower MSA Partners CEO, Rita Wilson, was recently interviewed by WorkersCompensation.com following her participation in a January 24, 2017 “State of MSP” webinar presented by the National Alliance of Medicare Set-Aside Professionals (NAMSAP).
Workerscompensation.com asked Rita to comment on CMS’s December 21, 2016 announcement regarding its plans to update its WCMSA re-review process in 2017. This includes expansion of the process to previously approved MSAs where there has been a substantial change in the claimant’s medical condition and the case has not settled (For details see Tower MSA blog on the announcement: CMS Announces Plans for 2017 Expansion of MSA Re-Review Process & New Policy Regarding URs in MSAs)
Rita’s comments to WorkersCompensation.com follow:
“CMS will need to establish the parameters for re-review and define ‘substantial changes.’ We expect costly procedures such as surgeries and spinal cord stimulators to be included,” Wilson said. “A WCMSA involving patients who have weaned off expensive polypharmacy regimens could also qualify.”
“Tower’s workflow and decision-tree software application identifies recommended, not-yet-performed procedures and intervenes to address inappropriate treatment prior to submitting an MSA,” Wilson said, “But this could be a game-changer for payers with CMS-approved MSAs that they were unable to settle.”
For those of us who deal with MSAs, it’s all too common to see claims at settlement time that started out as basic and simple, then spiraled downward as a result of bad prescribing habits, increased drug use and opioid addiction. We hope for a different ending, but can miracles really happen?
Background
In late 2015, Tower completed a pharmacy project for a small employer in California. In the course of the project, drug triggers were identified, physicians were contacted and claimants were challenged to settle or make changes in treatment. As you might imagine, many of the physicians fought the request for change. But through perseverance, and working in tandem with the client, we pushed forward.
The Story as Shared by our Client
Dear Hany,
A few weeks ago, I was looking over the case for one of the California claimants and wanted to share the amazing results we have achieved with this gentleman.
This case involved a 26 year old man at time of injury. He sustained a minor back injury but was taking Hydrocodone, Testosterone, Celecoxib, Lyrica, Nortriptyline, Methocarbamol, and FENTANYL. With the recommendations and assistance from the Tower MSA Partners team, as well as support from his wife, we were able to get him into a new treating physician who agreed with our goal. He was weaned off of the Fentanyl, Methocarbamol, testosterone, hydrocodone, and Celecoxib. He has even started an exercise program. He is now both proud and happy to report how well he is doing.
The injured worker is now 51 years old and he sadly notes that he missed out on 25 years of his life and his children’s lives because he was so “drugged”. On a positive note, however, his new treating physician has been wonderful to work with and we see only good things for this claimant.
On the financial side we have now realized a reduction in the monthly Rx spend from $1,200 per month down to $600. The injured worker is now only taking Nortriptyline, Lyrica and Celebrex and we expect to reduce reserves next year and approach him for a settlement in June, 2018. None of this would have been possible if not for the Rx project and your team’s expertise, guidance and follow up assistance.
While we have had great success with many of the claims that we partnered on, this particular claim was really about improving his quality of life. So please share my THANK YOU and gratitude with your team. Let them know that what they do can save a life and that is priceless.
It’s True….Miracles Can Happen in Workers’ Compensation
What a wonderful way to end the day and begin our holiday celebrations!
From all of us at Tower MSA Partners, our best wishes for a wonderful holiday, and a safe and prosperous 2017!
In an announcement distributed on November 1, 2016, CMS acknowledged the receipt of many inquiries from the MSP industry regarding procedural changes in the way CMS’s Workers’ Compensation Review Contractor (WCRC) reviews proposed zero-dollar Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts. CMS further acknowledged that as a result of these inquiries, it has determined that changes had transpired without prior notification, and that effective immediately, the WCRC will utilize (the) procedures that were previously in effect,further noting that CMS continually evaluates all policy and procedures related to WCMSA reviews and will publish any pending changes when or before they go into effect.
Background
Prior to October, 2016, the Workers’ Compensation Review Contractor’s procedure with Zero Dollar WCMSAs in cases where evidence of a complete denial of the claim was handled as follows:
The carrier’s complete denial would be evidenced by
a claim payment history documenting no payments for medical treatment and indemnity and
a letter from the adjuster or defense attorney confirming such full denial.
The MSA must be submitted to CMS for approval PRIOR to obtaining a court-approved settlement.
When these conditions were met, the settlement would be recognized as a strict compromise and CMS would issue a determination letter staying no MSA is needed.
While CMS never published this procedure as an official policy in the WCMSA Reference Guide, the policy was exercised regularly and consistently. As such, Tower, as well as many other MSP companies, incorporated this “policy” into its standard CMS submission procedure for Zero WCMSAs for denied claims.
The October ‘Surprise’
Beginning in October, 2016, with no notice, CMS responses for denied claims took a complete 180 degree turn in terms of the WCRC’s review process. No longer was the carrier’s evidence of complete denial of the claim sufficient to obtain CMS’s approval of a Zero WCMSA.
When questioned regarding its rationale for this drastic change, CMS noted only that there was a ‘NEW‘ procedure being followed by the WCRC, and in order to obtain approval of a Zero WCMSA one of the following would be required:
A court ruling regarding the compensability of the claim; or,
Treatment records (i.e. a letter from the treating physician) which demonstrate/indicate that no further treatment for the alleged industrial condition(s) will be required.
Unfortunately for the industry, there was no advanced notice of the change in procedure, no documentation of the change and no explanation of CMS’s rationale for making such a drastic change. We, along with everyone else in our industry, basically learned about this through development letters and undesirable dialogue with WCRC & CMS representatives.
Industry Reaction and CMS’s ‘Reset’
As expected, companies reacted immediately, contacting CMS to request answers, and seeking to determine how WCMSAs currently being reviewed would be handled. Tower clients with cases pending with CMS were advised to wait to see if the case would be developed or if CMS would follow its original policies. If developed, the case could be withdrawn.
In an effort to further clarify, NAMSAP (National Alliance of MSA Professionals) also intervened on behalf of its constituent members to confirm why the change was made, to ‘demand’ the courtesy of notice, and to offer its expertise to assist CMS in setting future policy to simplify the process rather than creating confusion and chaos.
As a result of the avalanche of questions, concerns and complaints, CMS has now taken a very positive step back, announcing that it will revert to its original, established procedure for reviewing Zero WCMSA for denied claims until such time as it can analyze, define policy, establish review procedures, communicate to the MSP industry and provide ample notice.
What’s Next?
With today’s announcement that the WCRC will revert to its original procedure for reviewing Zero WCMSAs for denied claims, the industry can return to its internal policies for setting settlement strategy with a clear understanding of the review process that will be executed by CMS’s review contractor when evaluating Zero WCMSAs.
As a reasonable next step, NAMSAP has offered to serve as a resource to CMS to provide industry experiences, to identify the perceived impact of the WCRC’s shift in policy, and to open dialogue regarding both our goals and the unintended consequences of CMS’s shift in review practices. I trust CMS will consider this offer, and will engage in conversations that will lead to a seamless
In a statement released on September 1, 2016 (FDA Black Box Warning), the Food and Drug Administration (FDA) announced that “after an extensive review of the latest scientific evidence, it is requiring class-wide changes to drug labeling, including patient information, to help inform health care providers and patients of the serious risks associated with the combined use of certain opioid medications and a class of central nervous system (CNS) depressant drugs called benzodiazepines.”
Background
Benzodiazepine medications are most commonly prescribed to treat anxiety and mood disorders, such as depression and insomnia. The drugs also are used to treat seizures. According to the FDA, the number of individuals who were prescribed both opioids and benzodiazepines grew by 41 percent, or 2.5 million, between 2002 and 2014.
States submitted a petition to FDA calling for the agency to add black-box warnings about the potentially fatal combination of opioid painkillers and benzodiazepines to the drugs. The officials said prescription opioids and benzodiazepines often are used together, and data show that almost one in three unintentional overdose deaths from prescription opioids also involved benzodiazepines.
What drugs are impacted?
The agency is requiring that black box warnings, the strongest available, be added to nearly 400 products (of which more than 200 are opioid painkillers) alerting doctors and patients that combining opioids and benzodiazepines can cause extreme sleepiness, slowed breathing, coma, and death.
The FDA is warning patients and their caregivers about the serious risks of taking opioids along with benzodiazepines or other central nervous system (CNS) depressant medicines, including alcohol. Serious risks include unusual dizziness or lightheadedness, extreme sleepiness, slowed or difficult breathing, coma, and death. These risks result because both opioids and benzodiazepines impact the CNS, which controls most of the functions of the brain and body.
The bigger picture
The agency said the move is one of a number of steps the FDA is taking as part of the agency’s Opioids Action Plan, which focuses on policies aimed at reversing the prescription opioid abuse epidemic, while still providing patients in pain access to effective and appropriate pain management. For those who may not know what’s in play or want more information about the national effort, go to TurnTheTideRx.Org to access the U.S. Surgeon General’s plans to curb the epidemic.
In responding to the announcement, FDA commissioner Robert Califf noted, “It is nothing short of a public health crisis when you see a substantial increase of avoidable overdose and death related to two widely used drug classes being taken together,” He further added, “We implore health care professionals to heed these new warnings and more carefully and thoroughly evaluate, on a patient-by-patient basis, whether the benefits of using opioids and benzodiazepines … together outweigh these serious risks.”
What does this mean to you?
In dealing with workers’ compensation claims for Class I and Class II Medicare beneficiaries, the combination of opioid pain killers and benzodiazepines is a common occurrence. When we see it, we immediately notify the claims handler that this is a dangerous combination and certainly not intended for long term use. For the elderly, drug combinations such as this are even more dangerous as their effects are exacerbated due to the rate at which they metabolize in an elderly person. For those who may not be familiar, there is an excellent resource (2015 Beers Criteria for Potentially Inappropriate Medication Use in Older Adults) that focuses on commonly used drugs and the risks and potential dangers when prescribed to the elderly. According to the guide,
“Older adults have increased sensitivity to benzodiazepines and decreased metabolism of long-acting agents; in general, all benzodiazepines increase risk of cognitive impairment, delirium, falls, fractures, and motor vehicle crashes in older adults and should be avoided”.
One of many pieces of the opioid puzzle
As stated within the “TurnTheTideRx” campaign literature, it is truly “All hands on deck” if we hope to change the course of the opioid epidemic. It will take patient, family members, friends, and in the case of workers’ compensation claims, claims handlers, nurse case managers, employers, carriers and even MSP compliance providers to help change prescribing habits. While legislative, regulatory and compliance entities can assist by setting policy, it is the physician who writes the first script. When I see that one of the largest emergency rooms in the country (One of Nation’s Largest ERs Kicks the Opioid Habit) can function without writing opioids as first line pain management for acute pain, I am convinced that a change is possible if we can engage our physicians.
We are but one piece of this very complicated puzzle, and “Big Pharma” has deep pockets. Through education of all stakeholders, advocacy to those in positions of power and influence, and our respective collaborative efforts to optimize claims and treatment, we can make a difference in the lives of our patients.
Older workers can be a valuable asset to any company. The institutional knowledge they bring, combined with their years of experience and a solid work ethic make them an integral component of any organization seeking to move forward successfully. Employers can realize the most benefit from their aging workers by ensuring they stay safe and healthy and recover quickly when they do become injured.
Due to elements of the natural aging process and often the presence of co-morbid conditions, older workers typically take longer to heal from their injuries than younger employees. With the prediction that 25 percent of the workforce will be at least 55 years of age by 2020, the National Institute for Occupational Safety and Health has developed a variety of materials to help employers understand and address some of the unique characteristics of older workers.
A primary focus of NIOSH is roadway crashes — the leading cause of occupational fatalities for older workers in the U.S. Older workers are more likely to be injured in a crash and more likely to die if they are injured. In fact, they have twice the risk of dying in a work-related motor vehicle crash than younger workers. According to the government, death rates for work-related roadway accidents increase steadily beginning around age 55.
Driving ability can be affected by a variety of physical factors; such as reduced vision, slower reaction times, declines in cognitive functioning, and chronic health conditions. The good news is that the effects of these and many other conditions can be greatly reduced or resolved with treatment. Employers are advised to work with their employees do develop safety and health programs that consider older drivers’ needs. Some companies are taking this advice to heart, and seeing great results.
“The safety of older drivers in the workplace is a shared responsibility of employers and their employees,” NIOSH states on its website. “Forward-thinking safety programs, reasonable accommodations, and open lines of communication between employers and workers can help protect valued older employees from death or disability due to roadway crashes.”
Effects of aging
Becoming aware of bodily changes that can affect a worker’s driving ability is the first order of business for employers that seek to protect their older workers. According to NIOSH, the following are among those changes:
Diminished eyesight and the need for more light can affect driving ability in some people. Older workers affected may find it especially difficult to drive at dawn, dusk, and at night. Cataracts and macular degeneration may make it harder to read signs and see colors.
Diabetes can make blood sugar levels too high or low, which can lead to drowsiness, dizziness, confusion, loss of consciousness, or seizures. Arthritis may cause stiff joints, limiting movement of shoulders, hands, head, and neck and making it difficult to grasp the steering wheel or apply brake and gas pedals. And sleep apnea can increase the risk of drowsy driving. Medications can interfere with sleep quality, also increasing the risk for drowsiness.
Motor skills.As they decline with age, it can become more difficult to have the strength to step on the brake or gas pedal. A decrease in flexibility makes it harder to see all angles of the car. A lack of coordination can make it more difficult for the upper and lower body to work together while simultaneously braking and turning.
Mental abilities.Attention span, memory, judgment, and the ability to make decisions and react quickly may be affected. Older drivers may feel overwhelmed by signs, signals, pedestrians, and vehicles around them.
What you can do
So what can an employer do? For one thing, employers can instruct all workers regarding driving best practices… use caution at intersections, especially when making left-hand turns, often a trouble spot for aging drivers. Helping older workers — as well as all employees — maintain their overall health is key to preventing tragic accidents.
What one company has done
One national transportation company, and a client of Tower MSA Partners, is protecting its aging drivers in a variety of ways. For one thing, the company employs a nurse who routinely calls all employees — whether they have company-sponsored health insurance or not. The nurse discusses annual physical exams and ways employees can take better care of their health. That strategy alone has resulted in a significant number of employees having at least a primary-care-physician.
The company’s focus on health and safety has also led many employees with chronic conditions to get treatment for their hypertension, diabetes, and sleep apnea.
For older workers that do become injured, the company’s key focus is on actions that will bring the worker back to function and work in a timely and positive way. Sometimes that means temporarily covering a medication, for example, to allow surgery to move forward.
Return to work is also a challenge when drivers are injured. For this company, a key step in the rehabilitation process is to engage a Return-to-Work company as soon as the injured worker is released to some level of activity. Keeping the employee active and involved in the recovery process is critical to maintaining forward progress. As the employer states, “the preventive work we are doing and our focus on return-to-work should help alleviate healing delays when/if a workers’ comp injury occurs.”
NIOSH suggests companies also develop and enforce a comprehensive driver safety policy, offer refresher driver training and encourage older workers to attend, and keep complete and accurate records of workers’ driving performances. Also, have policies that ban texting and hand-held phone use to prevent distracted driving, make sure work schedules allow workers to obey speed limits, and allow employees to take naps of less than 30 minutes or stop in a safe location if they are tired.
Tower’s perspective
As an MSP compliance company, Tower MSA Partners has a laser focus on best practices in claims management and settlement optimization when dealing with an aging workforce. We identify the co-morbid conditions that exacerbate injury severity, increase the cost of treatment and add time to rehabilitation, and seek to educate our clients as to potential exposure when these conditions exist. Injuries are inevitable. Our goal is to know where claim cost can spiral out of control and assist clients to identify, intervene and mitigate before the MSA.
The pursuit of positive health choices to minimize accident frequency, and optimize recovery when injuries do occur, is paramount to improving claim, settlement and MSA outcomes.
For more information visit www.cdc.gov/niosh/docs/2016-116/default.html/?s_cid=3ni7d2employerblog032016.
An article today posted by Yahoo! Finance discusses the new MSP Automation Suite by Tower MSA. The article cited the groundbreaking and sophisticated technology developed by Tower MSA that drives the MSP process.
Describing the MSP Automation Suite:
“The sophisticated technology drives all the processes Tower has perfected to proactively manage Section 111 Mandatory Insurer Reporting, the recently implemented Conditional Payment Notice process, and to stage workers’ compensation claims for Medicare Set-Asides and closure.”
Our CEO Rita Wilson offered many insights about the new MSP Automation Suite:
“Essentially, it automates our best practices for Medicare Secondary Payer compliance, claims optimization and MSA preparation.”
“Our Pre-MSA Triage identifies barriers to settlement and recommends claim-specific interventions, like physician peer review and clinical oversight, to remove those barriers long before preparing an MSA.”
“Clients don’t need to manually diary activities or call to check on things.”
“The system shows exactly when a phone call was made, and follow-up is due.”
“Automation frees claims professionals to address issues that require a human touch.”
The article went on to say:
“The MSP Automation Suite can track a claim from Medicare beneficiary identification through final settlement. It records every claim activity performed by Tower or its network of practicing physicians and pharmacists and provides clients with 24/7, end-to-end visibility into claims. The system prompts for missing data, conditional payment searches, and medical/pharmaceutical interventions and sends electronic updates to clients at appropriate data points.”
If you would like to read the full article, it is available here on Yahoo! Finance.
Lyrica is one of the most widely prescribed ‘pain’ medications in the workers’ system. Unfortunately, it is also one of the most expensive. Add to that the fact that it is typically prescribed ‘off label’ for injured workers, and you’ve got a recipe for high claim cost. But will this high dollar monthly drug spend translate to a high dollar MSA?
Lyrica’s 2016 price increase
Lyrica is among more than 100 drugs that saw price increases as of Jan. 1, 2016. Drug maker Pfizer said the company had raised the price by a whopping 9.4 percent this year. That follows the 20.5 percent increase in its average wholesale price just two years ago. With patent protection firmly in place, a generic version is not expected for at least two years.
While workers’ compensation stakeholders seek medical treatments that result in the best outcomes for injured workers, and off label drug use is common in both workers’ comp and group health, starting with an off-label medication is unnecessary. First-line therapy should be those medications that are FDA-approved for the patient’s condition.
Lyrica’s off label use
Lyrica is FDA approved for only a limited number of conditions, not chronic pain in general. The Food and Drug Administration has indicated the drug for pain associated with diabetic peripheral neuropathy, post-herpetic neuralgia, partial onset seizures, fibromyalgia and neuropathic pain associated with spinal cord injury.
If you have a claimant on Lyrica who does not have any of the above conditions, Medicare WILL NOT cover it — meaning that while you, the payer, may foot the bill as part of your monthly claim spend, Lyrica would NOT be included in the Medicare Set Aside should you move toward settlement. Many medical providers, as well as insurance carriers, are unaware that the medication is not covered by Medicare for off-label uses.
Tower MSA recently saved a client $179,000 after confirming Lyrica was being prescribed off-label and, therefore, should not be included in the MSA. That’s just one example of a high dollar claim cost that did not translate to a high dollar MSA projection.
What to do
Lyrica is just one of the many medications prescribed off-label in the workers’ compensation system. There are many others, like Lidoderm patches, Terocin cream, ACTIQ, Abilify…. all extremely expensive drugs that are not decreasing in price anytime soon.
If you’re unsure as to whether a drug is being prescribed off label, contact Tower and ask the question. If you’re considering settlement, you might also consider Tower’s Pre-MSA Triage. This service identifies unnecessary/inappropriate treatment and recommends claim specific intervention strategies to optimize claim cost before the MSA.
Whether a recommended intervention involves clarification that a medication is being prescribed for an off label use, contact with the treating physician to obtain discontinuation of medications not intended for long term use, or a complete physician peer review with peer to peer collegial dialogue, Tower’s MSP Automation Suite drives the process, tracking progress through completion. As a result, payers can better manage treatment and proactively lower their costs before discussions of the MSA ensue.
Conclusion
Never underestimate the value of a good doctor in optimizing claim outcomes. Payers should identify good physicians through data analytical resources and tools, and not settle for mediocrity. Next, work with your PBM to established and enforce pharmacy guidelines when authorizing treatment. Finally, be proactive in utilizing state jurisdictional options to avoid inappropriate treatment.
Optimal care, cost and compliance can be achieved.
Inappropriate and/or unnecessary prescription drugs, along with recommended medical procedures that are recommended, but never performed, are all too common in workers’ compensation claims. Yet they are often overlooked when moving a claim to settlement. But a new tool is helping payers identify and address obstacles, saving millions of dollars in MSA and settlement costs. Several recent cases bear out the program’s success.
Tower MSA Partners developed this unique service to ensure MSAs include only accurate and appropriate medical and pharmaceutical treatment. The Pre-MSA Triage allows payers to stage claims for optimal outcomes by providing a snapshot of MSA exposure before the MSA. By following our recommended interventions, clients are achieving CMS approval of reduced MSAs, with reductions of more than 50% in many cases.
How it works
Tower analyzes 6 months of medical records to identify care and cost issues, including the projected MSA cost of a claim based on the current medical and pharmacy treatment regimen. The review also provides a snapshot view of the MSA exposure in a non-discoverable (not an MSA) format, and offers an overview of inappropriate, unnecessary treatment and cost drivers that may impact MSA and settlement. For example, the review may uncover denied injuries and/or body parts, recommended surgical procedures that were never pursued, spinal cord stimulators that were recommended but never evaluated, gaps in treatment dates, unrelated medications, and off-label drug usage.
We then recommend various interventions, such as physician peer review, clinical oversight and conditional payment searches/negotiations to effect improved outcomes and savings in the overall claim costs, frequently as much as 50 percent!
Example Case Study
Tower’s Pre-MSA Triage projected the MSA cost for a 46-year-old male at $1,300,000. More than $1,000,000 of the total projection was due to extended prescribing of both long and short acting opioids. Tower recommended a Physician Peer Review followed by direct dialogue with the treating physician. Agreement to wean was obtained in writing and Tower initiated its clinical nurse oversight service to track progress.
Through Tower’s MSP Automation Suite, developed and maintained internally, we were able to drive the weaning process with the physician through tracked monthly calls, and to guide the adjuster as to when discontinued medications should be blocked by the client’s PBM.
Upon finalization of the weaning process, Tower worked with defense to obtain the necessary written language from the treating physician to confirm discontinuation and remove past medications. The final MSA was submitted and approved by CMS for $210,641 – a savings of more than $1,000,000 from the original estimate!
Conclusion
The example provided here is one of many success stories we are seeing, and through our MSP Automation Suite, we’ve been able to manage the process from triage through final CMS submission and approval in a secure, digital environment. Whether handled internally by our team of nurses or through a formal intervention and peer dialogue by one of our physicians, our system drives every step in the process.
Many companies can identify problems, and some even make recommendations. At Tower, we believe the key to successful MSA outcomes is a proactive approach to identify, intervene and remain involved through closure.
With the signing of A.B. 1124 by Governor Jerry Brown October, California has now joined a handful of states that have adopted closed pharmaceutical formularies in their workers’ compensation systems. While many details have yet to be worked out, the decision comes as good news for injured workers and payers alike.
Closed formularies essentially use evidence-based medicine to identity the prescription drugs that should be allowed for certain injuries. All other medications must go through a preauthorization process. The idea is to ensure the injured worker gets the right medication at the right time for the right reasons – AND to reduce unnecessary pharmacy costs.
Implemented appropriately, a formulary can result in better outcomes and lower costs. In fact, a study last year suggested California’s workers’ compensation system could save between $124 million and $420 million annually by adopting a formulary similar to that in effect elsewhere.
In addition to the states that have already implemented closed formularies or are in the process of doing so, several others are considering the idea. The result could be better efficiencies and significant savings for Tower MSA Partners’ clients in managing workers’ compensation claims even before the Medicare Set Aside review and triage process.
The specifics
Under A.B. 1124, the administrative director of California’s Division of Workers’ Compensation must create a formulary by July 1, 2017 for medications prescribed to injured workers. Between now and then, California regulators must determine a program that best addresses the needs of California’s injured workers.
Four states – Ohio, Oklahoma, Texas and Washington have implemented closed drug formularies. Arizona, Arkansas, California, Louisiana, Maine, Michigan, Montana, Nebraska, North Carolina and Tennessee are among the other states considering the formularies or in the midst of developing them.
There are several different types of formularies in effect. Washington, which adopted the first such formulary in 2004, has a more restrictive program than those in some other states. Texas, on the other hand includes more therapeutic groups and more choices within each group.
Regardless of the type of formulary, the states have touted successes. Texas, Washington and Ohio have all reported lower costs.
Texas, which implemented its closed formulary for new injuries in September 2011 and for all injuries in September 2013, also reported the number of injured employees receiving ‘N’ drugs – those requiring preauthorization – fell 65% and costs dropped 83% for new claims for injuries suffered on or after Sept. 1, 2011. Also important, the formulary has led to a significant reduction in the number of injured workers taking opioids on a long-term basis.
The Ohio Bureau of Workers’ Compensation likewise reported significant utilization and cost declines, including a 74% drop in skeletal muscle relaxants, a 25% decline in narcotics and a total drug cost drop of 16%, for a total of $20.7 million, in fiscal year 2014 compared with fiscal year 2011.
Many decisions must be made before California’s formulary takes effect and a variety of issues must be addressed. For example, the pre-approval process for drugs not allowed, decisions about the strategy for long-time opioid users, and considerations of compound medications must be determined.
Fortunately, a team of workers’ compensation stakeholders involved in helping to craft the legislation ensured some important provisions were included. The law requires the California Division of Workers’ Compensation to update the formulary at least quarterly, establish an independent pharmacy and therapeutics committee, accept public comment and publish two interim status reports
Supporters are confident when all is said and done, California’s formulary will provide effective treatment for injured workers, reduce delays and medical disputes, and reduce costs.
How closed formularies impact claims and MSAs
Closed formularies can serve as a gatekeeper in preventing troublesome medications being prescribed to injured workers. Medical providers in states with closed formularies tend to change their behavior and prescribe more clinically appropriate medications and treatments rather than unnecessary opioids and other drugs that require preauthorization.
While providers need approval to be reimbursed for medications not automatically allowed, supporters say closed formularies do not seek to prevent injured workers from having access to medications that are truly beneficial to them.
Workers’ compensation payers can also look for less adversarial relationships with providers, since there will be fewer questionable medications prescribed for the injured worker. Drugs that are not appropriate for first line therapy are generally those that are not allowed without prior authorization, under the closed formularies.
Many steps must be taken before California’s closed drug formulary will take effect and the devil is surely in the details. However, the fact that the nation’s largest workers’ compensation market is going in this direction is good news indeed!
Expect potential changes in the Medicare’s conditional payment reimbursement process related to a workers’ compensation claim while the claim is still open, possibly more than once. That is among the changes stemming from a revised process to seek reimbursement of conditional payments made in a claim.
Beginning Oct. 5, Medicare is shifting responsibility for its recovery of conditional payments, where the Centers for Medicare and Medicaid Services (CMS) is pursuing recovery directly from a workers’ compensation entity, to the Commercial Repayment Center (CRC), away from the Benefits Coordination & Recovery Center (BCRC). The transition will result in several changes to the process.
Working with the experts at Tower MSA Partners means your claims professionals need not be experts on Medicare Secondary Payer (MSP) compliance or conditional payments. However, payers should be aware of the new process and take steps to reduce any challenges.
Medicare’s Conditional Payment Reimbursement Process: The Plan
The move by CMS for reimbursement recoveries from non-group health plans to the CRC follows CMS’ previous transition of group health plan recoveries. In addition to workers’ compensation entities, the change will also pertain to CMS’ recovery efforts directly from a liability insurer (including a self-insured entity) and no-fault insurer.
The transition will only affect new conditional payment recovery efforts. Actions pending prior to the transition will continue to be managed by the BCRC. The BCRC will also continue to handle recoveries when a beneficiary self reports that a workers’ compensation or other non-group health entity has primary payment responsibility for a claim where Medicare has made a conditional payment.
CRC will manage cases where the Responsible Reporting Entity (RRE) has reported Ongoing Responsibility for Medical (ORM), ORM Termination or Total Payment Obligation to Claimant (TPOC) on Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) and CMS has identified the primary debtor as the RRE.
Changes
One of the biggest changes is in the initial dispute process. Where the BCRC provides a Conditional Payment Letter (CPL), the CRC will issue a Conditional Payment Notice (CPN). Both are information — not requests for payments. Both identify the amount of the current conditional payment, provide a statement of reimbursement, and describe the manner for disputing the charges.
However, where the CPL has no specific date for a response, the CPN must be disputed within 30 days. Failure to do so will result in a demand letter or initial determination issued to the applicable plan for payment. While applicable plans do have appeal rights for recovery demand letters issued on or after April 28, 2015, the demand letter locks the applicable plan in place as the identified debtor. Also, interest accrues from the first day of a demand letter; however it will not be assessed if the debt is paid within 60 days.
The CRC will begin to issue CPNs starting October 25, from Section 111 data processed on or after October 5. A CPN is typically issued when an applicable plan reports under Section 111 that it has ORM or a responsibility for the claim as a primary payer, rather than when a settlement, judgment or award is issued.
To dispute the CPN, the applicable plan may contact the CRC in writing or through the Medicare Secondary Payer Recovery Portal (MSPRP). However, disputes submitted through the portal may only be on the basis of relatedness and in response to a CPN. All other disputes must be in writing.
Applicable plans will have one opportunity to file a dispute. If the CRC does not agree with the dispute, the conditional payments will be reflected in the demand letter.
What you can do
Workers’ compensation payers can help prepare for a smooth transition by taking the following actions:
• Carefully review all correspondence related to conditional payments to determine if they are generated by the CRC or BCRC.
• Develop and implement a process for the timely review of CPNs as well as CPLs.
• Make sure disputes of CPNs are properly filed within the 30-day time limit.
• Ensure Section 111 reporting information is updated.
• Make sure the ORM process is working properly.
More specific details will follow as we track the rollout of this process…. Stay Tuned!
