Medicare Set-Asides Archives

Section 111 Reporting for WCMSAs & Avoiding Civil Penalties

June 28, 2024

It’s time to get everything set up to accommodate new Section 111 reporting fields for WCMSAs. While compliance has long been required, Civil Money Penalties (CMPs) are real now.

Tower’s Chief Technology Officer Jesse Shade joined our Chief Compliance Officer Dan Anders for the “Premier Webinar: Get Ready for Section 111 Reporting Penalties and WCMSA Reporting” to help attendees do just that. Here are the highlights:

Important Section 111 penalty and WCMSA reporting dates

October 11, 2024
The date that CMS starts to make Responsible Reporting Entities (RREs) accountable for the timely reporting of ongoing responsibility for medicals (ORM) and of the Total Payment Obligation to the Claimant (TPOC). Any claims with ORM or TPOC on or after October 11, 2024, can be audited and subject to penalties.

April 1, 2025
CMS requires the reporting of WCMSA information when a TPOC is reported

October 11, 2025
Date that CMS starts its compliance review process.

April 1, 2026
CMS begins Section 111 reporting audits.

About those penalties

No penalties will be issued for claims that are reported within one year of the date of acceptance of ORM or the TPOC date. And no claims with ORM or TPOC dates prior to October 11, 2024, will be reviewed.

If a claim is not reported within one year, the RRE can incur penalties of $357 per calendar day. This per-day penalty increases to $1,428 if it’s not reported for three years. (These are 2024 inflation-adjusted rates.)

The good news is that CMS caps the amount of a penalty for a single instance of noncompliance by a non-group health RRE. The bad news is that cap is $365,000!

In the somewhat good news department, CMS will randomly select only 1,000 claims to audit each year and audit 250 claims every quarter. Additionally, the agency will randomly select claims from group health as well as non-group health plan (NGHP) claims from workers’ compensation, liability and no-fault programs. This greatly mitigates your risk of an audit even if you have instances of late ORM or TPOC reporting.

How does CMS notify RREs of penalties?

CMS first emails an informal notice, so it is important to keep contact information updated in the Section 111 Profile. This initial notice allows the RRE to present mitigating evidence and this must be presented within 30 days.

Examples of the type of evidence to submit include: ORM was not reported because the claim was under investigation OR a good-faith effort was made to obtain claimant information, such as a social security number, but the claimant refused to provide it or did not respond. (See CMS Section 111 Penalties Rule Focuses on Untimely Reporting – Tower MSA for details on “good-faith efforts” to establish Medicare eligibility.)

If the RRE does not respond to the informal notice or CMS rejects the explanation, the agency mails a formal written notice. At this point, an RRE either needs to pay a fine or appeal to an administrative law judge within 60 days.

WCMSA Reporting Fields

Jesse Shade reviewed the upcoming changes CMS will implement to collect additional information on WCMSAs through Section 111 reporting. New fields and the information for them were covered in this post.

Tower smooths the transition for its Section 111 clients.

Jesse also described Tower’s IT efforts to make things as easy as possible for our Section 111 reporting clients. Our goal is to improve your ability to monitor the pivotal events in a claim.

The first step for Tower reporting clients is adding the new WCMSA fields to the end of your current claim input file. Once the fields are added to the feed file, testing will be scheduled to confirm that the data is properly transmitted to Tower. Tower will, in turn, participate in a testing period with CMS that begins in October.

The additional fields will require those who enter the Section 111 reporting information to be trained on when to enter the WCMSA date, what date to enter, and how to enter the data.

Additionally, Tower will highlight in our MSA delivery correspondence the importance of completing this information at the time of settlement.

Tower will continue to provide comprehensive reports to our Section 111 reporting clients, ensuring the accuracy of the data reported.

Our commitment is to make this transition easy and seamless for everyone involved and we will customize systems where needed so the process works for all our clients.

Practices that protect RREs from penalties

Dan advised clients to do the following to maintain compliance with the reporting rules:

Query claims to identify Medicare beneficiaries monthly and document when a social security number cannot be obtained.
Report ORM acceptance and TPOCs on the next quarterly submission.
Correct errors in reporting data to avoid report rejection (if they reject a submission, it will be considered untimely if not corrected within the reporting deadline).
When WCMSA reporting begins, make sure these fields are completed anytime a TPOC is reported.

The webinar also provided several examples of how ORM and TPOC penalties could work and how they could be mitigated. Slides and access to the recorded webinar can be requested from Dan Anders, daniel.anders@towermsa.com.

Tower’s proactive audit

To ensure your organization’s readiness for the coming audits and penalties, have Tower audit your processes, policies and systems to see if there are any holes in your compliance. Not only will we identify errors and other issues that could lead to penalties, but we also help you fix issues that lead to them. For more information on our Section 111 audit offer, please contact hany.abdelsayed@towermsa.com.

Tower’s Physician Follow-Up Service Kicks Costly SCS Out of MSA

June 20, 2024

Nothing can stall settlement faster than a Medicare Set-Aside (MSA) that includes an unnecessary or unwanted medical procedure. Procedures like surgeries, spinal cord stimulators (SCSs), and intrathecal pain pumps significantly raise the costs of MSA allocations. Fortunately, Tower’s client partners have access to our complimentary Physician Follow-up service that Save on MSAs.

In a recent case, this service successfully removed a costly SCS from the MSA, resulting in a savings of $132,232.

Challenges with SCS Trial Inclusion in MSAs: Addressing Worker Reluctance and CMS Requirements

A worker who had suffered a low back injury was advised by his neurosurgeon and pain management physician to consider an SCS trial. A review of treatment records showed that the injured worker was very anxious about the procedure, and a psychological evaluation revealed a diagnosis of major depressive disorder.

Despite the worker’s reluctance to undergo the procedure, CMS will include it in the MSA, assuming that the worker may change their mind. Tower drafted an initial MSA to include the SCS for a total allocation of $157,500.

Successfully Removing SCS from MSA with Physician Statements: Tower’s Approach

The injured worker’s resistance to the procedure and results of the psych evaluation indicated he would not be a suitable candidate for an SCS. Therefore, we recommended that our Physician Follow-up service obtain statements from both physicians that confirmed the SCS is no longer part of the treatment plan. (If only one physician had provided a statement, CMS would likely keep the SCS in the MSA).

After client approval, in compliance with this jurisdiction’s regulations, Tower notified the plaintiff’s attorney of our intention to communicate with the injured worker’s providers. We then contacted the neurosurgeon and pain management specialist and provided them drafts of physician statements that confirmed the SCS is no longer a treatment option.

While it took several weeks of persistent follow-up with the physicians’ offices, Tower successfully obtained both signed statements.

Efficient MSA Revision: Tower Achieves Significant Cost Reduction and Quick CMS Approval

Tower revised the MSA down from $157,500 to $25,268 and submitted it to CMS. CMS approved the MSA within two weeks for the proposed amount.

In response, Tower’s client said, “Great job, Tower! I am so thankful for our partnership and truly appreciate your hard work and persistence. $132k in savings!!! Woohoo!”

The defense attorney said, “you guys work some real magic here, bravo!”

It’s more methodology than magic, but we often find opportunities to reduce the allocation or mitigate potential increases from CMS review when we draft an MSA. Vague references to potential future procedures mean these costs will be included in the MSA. CMS’s exacting review process requires explicit confirmation of the last dates of service and ongoing treatment and medications.

At no extra charge, Tower contacts physicians, clarifies treatment, drafts physician statements, and obtains medical providers’ signatures to document dates of treatment and ongoing and future medical care. This service paves the way to quick CMS MSA approval and mitigates the potential for unexpected increases.

To learn more about our Physician Follow-up service, please get in touch with Hany Abdelsayed at 888.331.4941 or hany.abdelsayed@towermsa.com.

How to Manage Medicare Set-Asides: Tips from Dan Anders

May 29, 2024

Tower MSA Partners Expert Tips on How to Manage Medicare Set Asides

Our Chief Compliance Officer Dan Anders learned how to write Medicare Set-Asides (MSA) the hard way through trial and error in the days before the Centers for Medicare and Medicaid published complete guidelines. Even now, the manuals and regulations don’t cover every detail.

And with MSAs details matter. Proper documentation, down to the way the claimant signs and initials their consent form, is essential. Dan compiled some tips for managing MSAs with CMS in his May 21 Leaders Speak article for WorkCompWire. These are among the topics covered:

Rated ages

The article highlights the use of rated ages as a way to calculate a fair allocation for the MSA. Briefly, if an injured worker has comorbidities that will likely reduce their longevity, a rated age can reduce the allocation of the MSA.

How to respond to a dreaded Development Letter from CMS

Dan tells readers how to respond to a CMS Development Letter, which CMS sends when it needs additional information to review submitted MSA. These letters usually request updated treatment records, complete claim payment history of medical, indemnity and expenses, or a document that clearly outlines all the dates of injuries, all carriers, and all accepted and denied body parts.

Development letters can be avoided with the submission of all the correct documents with the MSA. Some submissions provide an Independent Medical Evaluation or Qualified Medical Evaluator report in lieu of medical records. IMEs, QMEs and similar evaluations may influence a decision, but they cannot replace treatment records. And CMS wants ALL the injury-related records even if workers’ compensation did not pay for the treatment.

When to request a Re-Review

Dan also explains how to handle the Re-Review Appeal process. CMS can make mistakes when issuing counter-highers. He cites several common mistakes, including incorrect prescription drug pricing, misinterpretation of medical records, and using the wrong fee schedule. Always analyze counter-highers for potential errors and consider taking advantage of this appeal.

Tower is here to help manage Medicare Set-Asides

Read the article here and remember that Tower consults with its clients on every aspect of MSA submission and other Medicare Secondary Payer issues. Whether you’re a client yet or not, Dan is available to discuss issues you encounter with your MSAs. Contact him at daniel.anders@towermsa.com.

MSA Amended Reviews – Key to Settlements of Old Dog Legacy Claims

October 26, 2023

Tower MSA Partners covering CMS expanded Amended Review availability for Medicare Set-Aside arrangements.

Tower MSA Partners’ Chief Compliance Officer Dan Anders’ enthusiasm for Amended Reviews kept the audience engaged during our recent Premier Webinar: Amended Review MSA Provides Second Bite at the Apple.

Several criteria dictate whether payers can submit an Amended Review, including the fact CMS needed to have approved the first MSA more than 12 months earlier. In addition, there must be a $10,000 or 10% (whichever is higher) difference between the first MSA allocation and the Amended Review MSA.

Our earlier post discussed CMS’s decision to remove the lookback period for Amended Reviews. Previously, we could only use this process if the original MSA had been approved during the last six years. The removal of the lookback period opened the door for insurers and employers to examine their unsettled legacy claims that had any approved MSA and try to settle the claims.

Dan cautioned attendees not to submit an Amended Review MSA unless the injured worker seemed open to settlement. “CMS’s change gave payers a second bite at the apple,” Dan said, “But it’s just one more bite, only one opportunity to obtain a new MSA. You don’t get to eat the whole apple.”

The webinar shared facts and advice about Amended Reviews and highlighted several real case studies, including one where the second MSA amount was much higher than the first. Some takeaways:

Request an MSA report to decide if an Amended Review MSA submission makes sense.
An Amended Review is not available until 12 months after CMS approved the first MSAA.
There’s no requirement to submit an Amended Review MSA for settlement purposes even if the CMS-approved MSA does not reflect current or future course of care.
Make sure all parties are at a stage where settlement is feasible.
Obtain medical documentation to support all medical and medication changes from the original MSA.
Unlike a regular MSA submission, where CMS requests more information and we can supplement and support the proposal in our response, the Amended Review MSA process offers no opportunity to provide documentation after submission. CMS will review what is provided and make its determination.

Attendees asked great questions:

Must the vendor who submitted the original MSA also submit the Amended Review MSA?

No. Tower can handle the Amended Review MSA even if a different vendor handled the original submission.

If an MSA was previously submitted for a Re-review, can it be submitted for an Amended Review MSA?

Yes.

Does the undertaking of an Amended Review make the previously submitted MSA null and void?

Only if the Amended Review MSA is submitted and approved. The beauty of CMS-approved MSAs is that they never die. If you can get the injured person and their attorney to agree, you can use it to settle, regardless of how outdated it is.

Like just about everything else CMS touches, the Amended Review process is complicated, and you can easily blow your one and only chance. Do not try this at home.

Dan is always happy to discuss cases and explore Amended Review and other options with you. Don’t hesitate to email him at Daniel.Anders@TowerMSA.com.

Remember, Tower can create MSA reports to help you decide if you want to pursue an Amended Review MSA. In addition, we’ll review your open claims with high CMS-approved MSAs and select those that could settle with an Amended Review MSA. We can also provide clinical recommendations to determine whether a physician statement, additional medical records or other intervention can result in a lower MSA.

Tower MSA Partners. Don’t Settle with Anyone Else.

Premier Webinar: Amended Review MSA Provides Second Bite at the Apple

CMS now allows any previously approved MSA to have a one-time Amended Review. This means that CMS will consider a new MSA submission that may be lower or higher than the previously approved MSA. Essentially, it is a second bite at the apple for old MSAs that, for whatever reason–they were too high, or the injured worker was not ready to settle–weren’t utilized for settlement.

Tower is pleased to feature our Chief Compliance Officer, Dan Anders, who on Wednesday, October 4, at 2:00 PM ET, will address the following topics:

Criteria for an Amended Review MSA
Is an Amended Review MSA required?
Documentation to support an Amended Review MSA
Examples of Amended Review MSA submissions

Besides Amended Review MSAs, the webinar will also consider how MSA Re-Reviews can reduce MSA amount resulting from CMS counter-highers.

A Q&A session will follow the presentation, and you can provide questions when you register. Please click the link below and register today!

Please note there is no CEU credit offered for this webinar.

Register Here

Easy MSA Cost Savings Through Structured Settlements

June 21, 2023

Tower’s structured settlement partner, Arcadia Settlements Group, gave an in-depth overview of how Medicare Set-Asides, structured settlements, and professional administration facilitate workers’ comp settlements during our recent Premiere Webinar. Tower MSA Partners Chief Compliance Officer, Dan Anders, moderated the informative session that featured Alisa Hofmann, Arcadia’s VP of Workers’ Comp and Medicare Practices, and Lori Vaughn, who oversees its structured settlement programs.

As you may know, workers’ comp settlements can be paid out in a lump sum or through structured settlements. Here are some not-so-fun facts about lump sums:

25-30% of injured people exhaust lump sum settlement funds within 2-3 months.
85-90% of injured people dissipate lump sum settlement funds within 2-5 years.

When injured workers exhaust these funds, if they are Medicare beneficiaries, they turn to Medicare to cover injury-related medical bills. And the whole point of the Medicare Secondary Payer Act is to prevent this.

Structured settlements protect the MSA funds by paying them over time as an annuity. The injured worker receives two years of the MSA allocation at settlement plus the cost of a first procedure or replacement if there are any. The rest of the MSA comes in annual payments, so the injured worker receives a consistent stream of funds for injury-related care over their lifetime.

For payers, this arrangement offers significant savings and a path to faster claim resolution, especially when paired with professional administration. And, like an MSA, the structured settlement shows Medicare that its interests are protected.

A Couple of Takeaways:

Structured settlements aren’t only for MSAs. They can be used for indemnity and funds for healthcare services and equipment not covered by Medicare. Even attorneys can be paid through these.
CMS-approved lump sum MSAs can be converted to a structured MSA but require submission to CMS of an attestation from the injured worker agreeing to the change.
It is easier to submit the MSA to CMS in the structured settlement format as if it is later decided to go with a lump sum there is no need to submit an injured worker letter to CMS agreeing to the change. In short, submitting in this format saves time, money and frustration.

Hofmann and Vaughn also discussed self-administration versus professional administration of the MSA. They urged payers to educate injured workers on the risks, rules, and responsibilities of MSA administration.

CMS prefers professional administration. Plus, some companies like our partner Ametros provide medical and pharmaceutical savings in addition to managing the fund and reporting.

With examples that show how structured settlements are calculated, the webinar is great for new claims representatives and those who want a refresh on settlement tools. If you’d like to receive more information on structuring an MSA or a link to the recording, please email your request to Dan Anders at daniel.anders@towermsa.com.

CMS Significantly Expands Amended Review MSA Availability

May 17, 2023

The Centers for Medicare and Medicaid Services (CMS) announced the expansion of its Amended Review policy to significantly more MSAs in the latest update to its WCMSA Reference Guide, Version 3.9. The Amended Review process was previously limited to MSAs approved within the last 12 to 60 months.

The 60-month limitation is now gone, opening the door to a second bite at the apple for any MSA approved over 12 months prior.

Does Your MSA Qualify?

CMS provides the following criteria for an Amended Review:

Where the following criteria are met, CMS will permit a one-time request for re-review in the form of a submission of a new cover letter, all medical documentation related to the settling injury(s)/body part(s) since the previous submission date, the most recent six months of pharmacy records, a consent to release information, and a summary of expected future care.

CMS has issued a conditional approval/approved amount at least 12 months prior.
The case has not yet been settled as of the date of the request for re-review.
Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

A claim that meets these criteria qualifies for an Amended Review.

Other Notable Updates

The CMS Regional Offices no longer approve the MSA before its release to the submitter. For a brief history, when CMS introduced the MSA review process in 2001 the regional offices reviewed the MSA submissions. CMS replaced their review responsibility in 2005 by introducing a centralized review contractor, the Workers Compensation Review Contractor (WCRC). Since then, the regional offices approved the MSA recommendation made by the WCRC.

While no longer putting their stamp of approval on the MSA, the regional offices are still responsible for the receipt and review of final settlement documents to confirm the proper funding of the MSA.

Also, as part of the update, CMS clarified pricing methodology around intrathecal pumps, spinal cord stimulators, and peripheral nerve stimulator replacement frequency.

Practical Implications

The big news is the availability of Amended Review MSAs for any prior approval which otherwise meets the above-defined criteria. We recommend that payers review their files to identify open medical claims which may now be eligible for an Amended Review. Tower stands ready to assist you with such a review and identify claims that can now be settled. Please contact us for further consultation.

The Critical Care Nurses Give MSAs

May 11, 2023

In the second installment of our quarterly series, “Tower Partners: People Behind the Settlements,” and in celebration of Nurses Week, we spotlight Brittney O’Neal, our Director of Clinical Operations. A nurse, Brittney oversees the team of nurses that produces our Medicare Set-asides (MSAs).

There are so many elements and areas of expertise needed to develop an MSA that is fair, reasonable and compliant. Or, as we say: optimized. If Tower’s MSA operation was in the shape of a wheel, Brittney would be the hub. Read on to learn more about her and how our MSAs are written to be effective settlement tools.

What does your position as Director of Clinical Operations entail? And how does your role impact Tower’s clients?

I lead clinical operations which includes MSA writing, quality assurance and our Physician Follow-up service. We have a team of RNs who review the records and write MSA reports. In so doing, they identify potential treatment and pharmacy problems and make intervention and mitigation strategies. As part of our quality assurance, I review MSA allocations for accuracy and make necessary corrections before they are delivered to our clients. I also oversee our Physician Follow-up team, which is contacting treating physicians to resolve many of the problems we identified in writing the MSA.

Client communication is vitally important. I’m available to answer questions from clients and prospects and help them put together a plan of action to settle a claim.

What led you to become a nurse? What experiences shaped your professional journey?

I actually started in the pharmacy field, wanting to become a pharmacist. However, one of my mentors told me that the industry was moving away from patient care and that I should look into more of the medical side.

How did you get into MSP compliance and MSAs?

Honestly, by chance. I was a pharmacy technician looking for something different and was fortunate to land an interview with Tower MSA Partners. Kristine Dudley, Tower’s Chief Operating Officer, gave me an opportunity to turn a job into a career.

How does being a nurse help you in your job at Tower?

Being a nurse enables you to better understand the medical material you are reading to in turn prepare an accurate allocation. It guides your approach to researching services and Medicare coverage and the ability to provide intervention strategies.

What part of the job do you find the most rewarding?

I enjoy being able to help our teams and clients navigate the different aspects of this industry. It’s great to be able to teach and share my knowledge while also learning from others. It is also rewarding to hear from clients who are grateful for the cost-saving measures our team accomplishes and the turn-around time of the reports.

What are some of the things clients ask about most often?

Many questions include whether an MSA or Medical Cost Projection (MCP) is needed, CMS review thresholds, and the Amended Review process. Other questions deal with mitigation tactics to help with cost-saving measures.

How do you facilitate the settlement of claims for Tower clients?

Everything Tower does is designed to facilitate claims settlement. Carefully reviewing claims for cost drivers, like the wrong body part or duplicative or discontinued drugs. (That pharmacy background really came in handy!) Turning around reports quickly and recommending and implementing clinical interventions to eliminate unnecessary costs. Physician Follow-up ensures that treatment changes are properly recorded in medical records and that we have a signed physician statement so CMS can approve our MSA.

Where did you attend school/degrees?

I earned an Associate of Arts degree from Palm Beach State College, then an Associate Degree in Nursing (ADN) from HCI College, also in Palm Beach, Florida.

What do you like best about working for Tower?

The close-knit family atmosphere. No matter what “title” one holds, we all understand the different levels of the workflow and are willing to assist in various areas when needed. Everyone is willing to share their knowledge so that other members can better understand the MSA/CMS process, along with other MSP matters, such as conditional payments and mandatory reporting.

How do you think Tower sets itself apart from companies that sell the same/similar services?

I feel Tower MSA Partners sets itself apart from other companies by promptly being available for our clients to speak with and by having attorneys on staff for consultation. Another way is our free Physician Follow-up service and fast turn-around time on reports.

Where did you grow up, and where do you live now?

I was Born in Long Island, NY, and moved to Palm Beach County, FL as a child. Now we’re living in Saint Lucie County, FL.

Tell us about your background and family.

Prior to joining this industry, I worked in retail and hospital pharmacy which assisted me with transitioning into the MSA world and going on to pursue my RN. My husband is a Firefighter/Paramedic, and we have three children (12, 9, and 5).

What do you like to do on your time off?

On my off-time, I am a busy wife/mom running around to football practices/games and will soon start softball for my baby girl. I also enjoy weightlifting with my husband and family outings.

Thank you to Brittney and all our Tower nurses for your commitment to providing our clients with the highest level of service. Happy Nurses Week!

Does Your MSA Program Measure Up?

April 11, 2023

Person pointing out metrics on a posterboard to measure Medicare Set Aside.

Workers’ comp payers regularly measure the performance of different aspects of their programs. Understanding injury frequency rates, the average cost per claim, timeliness of claims processing, lost-time and return-to-work rates help them identify cost drivers and improve processes. Payers also evaluate the performance of external partners — provider networks, bill review, pharmacy benefit managers, third party administrators, physical therapy networks, home health and case management vendors, etc.

But do they evaluate their Medicare Set-Aside (MSA) programs and vendors – not so much.

Why not? Well, some employers, TPAs, and insurers have their Medicare Secondary Payer (MSP) services integrated into a multi-service contract. As a result, they may assume that MSAs are just part of the process – they are all the same – they take the time they take – and they cost what they cost.

Without metrics to benchmark your performance against some sort of standard, how would you know?

In the case of MSAs, until recently, payers did not have benchmarks to determine what to measure.

In 2022, for the first time, the Centers for Medicare and Medicaid Services (CMS) published some metrics that can give payers a benchmark for comparison. While CMS’ data points are limited, they offer a great place to start.

Average MSA Amount

Providing statistics from fiscal years 2020 through 2022, CMS found the average MSA recommended amount was $84,563.33 in 2020, $80,740.94 in 2021, and $81,571.75 in 2022. (“Recommended” in CMS language means CMS believes the dollar amount of the allocation will be sufficient for the lifetime medical cost of the injury. It’s equivalent to a CMS-approved amount.)

Having captured, benchmarked and analyzed our MSA submitted amounts for more than six years, Tower was excited to see how our outcomes compared to CMS’s published numbers.

One example is the average amount of an MSA. CMS’s average in 2022 was $81,571.75, while the average of Tower’s CMS-approved MSAs was $54,715. That’s nearly $27,000 less than CMS’ number, a whopping 33% less than the CMS’s average amount.

And this didn’t just happen in 2022. The average amounts of Tower’s MSAs were 32% lower in 2021 and 30% lower in 2020.

This is a credit to our powerful and persistent clinical interventions.

Approved Rx Drug Cost

CMS also broke out the cost of prescription drugs on its recommended/approved MSAs. The agency’s average prescription drug cost for 2022 was $20,776, compared to Tower’s $11,405.

Tower’s averages in this category have steadily declined since 2020 when Tower’s average Rx drug cost was $17,941, then $14,079 in 2021. If it seems like we’re boasting a little, we are. Our CEO’s strong background in pharmacy management has paid off over the years.

We have concentrated on pharmacy costs since Tower was founded in 2011. We always examine claims for unnecessary cost drivers like duplicate scripts, discontinued prescriptions, and opportunities to change from brand to generics. And Tower led the charge in identifying inappropriate opioid use on MSAs along with all the prescriptions needed to handle side-effects. Notably, in 2022, only 15% of Tower’s CMS-approved MSAs included opioids.

We don’t stop at identification, either. Our clinicians work with physicians, gain their agreement to taper injured workers off opioids and follow up to ensure changes happen.

Re-reviews

Tower also doesn’t let CMS get away with errors and misinterpretation of medical records with the MSA submission. We know our MSAs and we know the rules so that we can confidently challenge CMS when we believe it’s wrong.

While there is no formal appeals process when an MSA comes back higher than proposed, we can submit a re-review request to reduce the MSA. In 2022 Tower had a 63% success rate at obtaining a partial or full reduction from the CMS MSA counter-higher using the re-review process.

Conditional Payment Disputes and Appeals

When it comes to Medicare conditional payments, in many, many cases, the reimbursement demand is inaccurate. If the client approves, we’ll chase every dollar of savings. We’re aggressive because we have the records, fee schedules, technology, and CMS response data to fight for our clients. In 2022, our conditional payment disputes and appeals yielded an overall 92% reduction. In 70% of these cases, the demand was reduced to $0.

While CMS did not publish metrics on conditional payments, Tower believes it’s an important point to measure. There are numerous other areas that we measure and our Chief Compliance Officer Dan Anders is happy to discuss these and work with you on developing metrics for your own program. Contact him at daniel.anders@towermsa.com.

Tower Partners: People Behind the Settlements Interview with Kevin Puckett of KP Underwriting

February 16, 2023

Tower MSA Partners graphic with Kevin Puckett of KP Underwriting with the question “Rated ages…what are they and how do they affect MSA’s”.

Tower MSA Partners is pleased to launch “Tower Partners: People Behind the Settlements.” This quarterly series will dig into the elements that go into smooth, cost-effective settlements and introduce Tower’s team members and corporate partners who make them possible.

First up is Kevin Puckett, owner and president of KP Underwriting, who is responsible for assigning a rated age on most of the MSAs we write. As Kevin explains, a rated age is the statistical age of a person due to their medical conditions. A person’s actual age may be 60, but their comorbidities and other conditions could cause their rated age to be 65.

Why is this important to the MSA? Because an MSA is calculated over the injured worker’s life expectancy. A higher rated age that reflects a shorter life expectancy reduces future medical costs. This reduction can be significant, sometimes tens or even hundreds of thousands of dollars.

Case in point: a 67-year-old woman with a rechargeable spinal cord stimulator (SCS) would have required two revisions (one every nine years) over her 18-year life expectancy, in addition to other medical costs. The MSA’s initial allocation was $142,410.64. However, the rated age came back at 72, reducing life expectancy from 18 to 14 years. This allowed Tower to remove one SCS revision along with other medical costs. The revised MSA was $98,586.35, a $43,824.29 reduction to the allocation.

Now, let’s turn to our rated age expert and partner, Kevin Puckett.

Q & A with Kevin Puckett

What is a rated age?

A rated age is an adjusted age and reduced life expectancy, that is the expected number of years of life remaining at a given age based on an individual’s medical impairments and the impact they have on their body and life expectancy. The US Health & Human Services National Vital Statistics life expectancy tables set the baseline for life expectancy determinations.

What is your background in providing rated ages? What qualifies you to provide this service?

I have been the President and Owner of KP Underwriting, LLC, an independent underwriting company since 2004. KP Underwriting provides rated ages and modified life expectancies for companies that provide structured settlements, Medicare Set-Asides, and medical cost projections. Our services are also used for settlement purposes and to help set reserves. During my 30+ year career in medical underwriting, I worked with multiple life insurance companies, developing and managing underwriting departments before launching KP Underwriting. I’ve also written underwriting manuals, audited underwriting departments, and provided expert witness testimony on life expectancy in multiple states and for the Department of Justice. I earned my BBA in Business Administration with a minor in Biology from Eastern Kentucky University, an Associates designation from the Academy of Life Underwriting, and an FLMI (Fellow, Life Management Institute).

Is KP Underwriting approved to provide rated ages for CMS?

Yes, we’ve been approved since 2006. KP Underwriting is the single largest provider of rated ages in the country, having provided several hundred thousand rated ages to the Centers for Medicare and Medicaid Services (CMS).

What documentation do you require to calculate the rated age?

Medical records should contain two primary categories of records as listed below. Medical records within the past two years are considered current and have more weight in rated age calculations.

Current status of the claimed injury includes:
- Length of time since injury, permanency of the condition, functional status, stability of treatment, nature of the ongoing treatment.
Overall medical status of the individual including:
- All co-morbidities, personal medical history, pharmaceutical use and related conditions.

Medical records older than two years can be utilized, however, the rated age will normally be more conservative as health history and medical impairments can change drastically over a two-year timeframe or longer.

Can you provide examples of diagnoses that will increase the rated age?

Two conditions can impact the rated age and life expectancy: the injury itself and medical impairments. Good examples of both are as follows:

Injuries
- Spinal Cord Injuries, head injuries, amputations, burns, chemical exposure, and falls are the most significant. The best thing to consider with injuries is how and if it impacts daily functioning.
Medical impairments
- Most major health impairments will impact the rated age, such as diabetes, stroke, coronary artery disease, obesity, smoking, peripheral artery disease, kidney, colon, and liver diseases, HIV/AIDS, post-covid syndrome, and major respiratory disorders, to name a few. This is a very broad category. One of the things I cannot stress enough is that medical impairments usually have the biggest impact on the rated age.

Do you solely consider the injury-related diagnoses or both the injury and non-injury-related diagnoses?

The injury and residuals and any medical impairments are both considered in processing the rated age. We try to let our clients know that not only healthy people get injured. Medical impairments usually have the biggest impact on rated ages. In some instances, medical impairments can prevent or delay healing from the injury. For example, diabetes can delay healing in cuts or burns, leading to amputation or slower response to treatment.

What is your typical turnaround time to provide a rated age?

KP Underwriting’s turnaround time is usually 2-3 hours, with rush requests completed within an hour. All cases that come in before 4 pm EST are completed the same day. All cases after 4 pm are completed first thing the next business day.

What does your rated age report contain?

The rated age report sent back to our clients is on KP Underwriting letterhead and contains the name, date of birth, gender, current age and current life expectancy, rated age and rated life expectancy, a brief medical summary of the impairments and injuries used in consideration of the rated age, and the table used in our calculations. These are tailored to meet our clients’ needs.

How long has KP Underwriting been in business?

KP Underwriting has been in business since 2004. Initially, we prepared rated ages mainly for life companies and structured settlements. We branched out in 2006 to include rated age services for MSAs.

Do you do all the rated age calculations, or do you have a staff that assists you?

KP Underwriting grew quickly to the point that I needed help to do them. I currently have a staff of 10-from underwriters to processors- who assist in the rated age process.

If you want more information on KP Underwriting, you can visit their website or contact Kevin at kevinp@kpunderwriting.com or (502) 345-8048. And if you have a question about a specific MSA or the impact of rated ages on MSAs in general, I am happy to speak with you. Email Daniel.Anders@TowerMSA.com.