MSAs – another perspective

In follow up to my posts on MSAs, I had the chance to interview Peter Foley of the American Insurance Association yesterday. Peter is quite knowledgeable about MSAs, the Medicare Secondary Payer Act, CMS’ perspectives, and how this affects payers. He’d be the first to say he is not an “expert”, but in my view he is certainly one of them.

Here is our conversation – and I hope I got it right.

What payers are affected by MSP Act?

All payers – group, Self-Insured (SI) and non group health plans, workers comp auto general liability etc. – including claims where no medicals have been or can be paid. (E.g a claim on an accountant’s E&O insurance)

Does any payer have to file an MSA w CMS?

No. It is not statutorily required and never has been, it has been recommended but not required.

Why do payers send MSAs to CMS?

The payer thinking is in some way they can use a submission as a defense against Medicare coming back to them and say the payer did not take Medicare’s interest into account when settling the claim. While it does not definitively protect the payer from future action but does show that at that point in time they made an effort to protect Medicare’s interest.

If a company stops sending in MSAs, they may be concerned that CMS would think there’s a problem and perhaps subject them to more scrutiny.

Is there a “safe harbor” in regards to MSAs?

There is no safe harbor.

After an MSA is established and set aside does the payer have any protection from future action from CMS?

No. One can’t prevent the federal government from asserting its perceived rights if it so chooses.

It appears the backlog has come down, but other sources indicate it has not. What do you see?

Medicare doesn’t make available what is submitted or processing times they simply capture how many MSAs they have approved for how much in what time frame. The only data available is what individual companies report on their own.

There is no available comprehensive data on turnaround time – MSA companies have repeatedly asked CMS to bring more transparency to the process; my interpretation of transparency is data on the number of submissions, timeframes, and financial data. The problem that CMS has is they only capture numbers of MSAs approved, the date they are approved, and value of those set asides. We and they don’t know when or if the settlements have been finalized or indeed if the claim was settled at all. CMS does not report submission and approval dates, just approval date – what has been made available is just that.

There is no consistent reporting from CMS on those data points, much of the information available required a specific request to CMS, or may have come from congressional testimony.

The information currently available is limited and sporadic and not generalizable to the entire MSA population.

MCM – There’s some hope that legislation currently pending in Congress will provide some relief. There are two bills, a House and Senate version, which appear to be pretty similar.

The bill will be scored (to assess its impact on the budget and deficit) while the Senate and House are out for election and will score favorably. The hope is it will be attached to a bill and considered in the lame duck session. The American Bar Association endorsed it yesterday joining a broad coalition that includes the plaintiff bar, self-insured employers, AIA, and the Property Casualty Insurance Ass’n. More on this from Jennifer Jordan here.

Key elements of the bill:

  • Requires federal govt to adhere to state WC laws
  • Codifies current procedures which otherwise could be changed at any time without prior notification.
  • Allows for parties to submit funds directly to CMS if mutually agreed upon
  • Also includes a separate appeals process on the MSA determination.

Peter – “We are asking for transparency and clarity, and insurers, plaintiffs bar, and self insured employers are all supporting this bill.”

Thanks to Peter for his time, and to AIA for allowing a pseudo-journalist to interview one of their staff for the record.

From my admittedly uneducated perspective, CMS’s position, stance, and requirements border on the ludicrous.

Insurers and self-insured entities will be required to send data on essentially ALL claims to CMS, where the data will likely sit for eons, hopefully untouched unless some hacker gets in and steals all the personal health information, SSNs, and other data, an event that is only possible because CMS requires payers to send it to CMS.

What does this mean to you?

While I applaud the thinking behind the Medicare Secondary Payer Act (taxpayers shouldn’t have to pay for services that an insurer or employer should be liable for), the powers that be at CMS have taken that thinking and turned it into an expensive, ridiculously burdensome, wholly-unnecessary, potentially dangerous and likely pointless exercise.

 

MSAs – there’s more to the story

A bit more information on my least-favorite subject – Medicare Set-Asides.  After my post last week on NCCI’s recent report on MSAs, I heard from a couple folks seeking to clarify/educate/help me understand that there’s a bit more to the picture, and just before I was about to go to virtual print, along comes this excellent post featuring Jennifer Jordan Esq. of MedVal.

A couple key points.  First, as noted in last week’s post, the NCCI report was based on data from the NCCI data call and Gould and Lamb.  What I SHOULD have been more clear on was that this data “set” may not be representative of the entire universe.  To that point, a couple colleagues suggested there is a lot more nuance here.

First, a word on sources.  As Colleague A noted, many companies don’t send their MSAs to CMS period, and some just send those over X dollars.  Some payers (the Hartford being the largest I’m aware of) handle their MSAs in-house.  And, there are lots of other outfits out there that do MSAs, that have somewhat different perspectives based on their workflow and client base.

Second, unbeknownst to be, the change in vendors handling MSAs may well have had a big impact on the mass approval that occurred last December (thank you Colleague B).  Evidently the prior vendor did not have to continue handling those that were “in process”, and the new vendor wasn’t contractually obligated to handle them either. Somehow, the new vendor did end up handling them – with the result that almost all were processed in a short period, and the vast majority were approved as is.

Third, Jen Jordan knows way more about this than I ever will, so I’d encourage you to read her take on the NCCI report.  Among the key takeaways -

  • juris drives a lot – in some states you can’t settle medicals, while others have convoluted settlement regulations.
  • some MSA companies build high cost MSAs as they want them all to go thru the first time, while others are much more conservative, leading to lower total costs.
  • It may well be that turnaround times aren’t getting much better these days
  • Jen notes that the percentage of MSA dollars allocated to drugs is actually bifurcated, with drugs accounting for about three-quarters of the cost in a big chunk of MSAs and relatively little of the total cost in another chunk.  That said, she notes  “Drugs are and forever will be the major cost driver in the majority of MSAs”

What does this man for you?

Listen to the experts, and I’ll redouble my efforts to avoid writing about MSAs and direct readers to those who actually understand this stuff.

 

Friday catch-up

Today most of the news is about PPACA enrollment, prices, and issues related thereto.

First up, paid enrollment as of mid-August was about 7.3 million via the Exchanges. That’s a pretty big number, and substantially above initial goals (and below the President’s late spring estimate). To be fair, the President’ estimate was for those that signed up, not those who paid, and as those of us who’ve been in the insurance business know all too well, there are always enrollees who don’t pay their initial premiums.  A 9 percent non-pay is pretty good, actually.

Among those who got coverage via the Exchanges, most are generally happy. According to California Healthline;

  • 71% expressed confidence they would receive high-quality care;
  • 70% expressed confidence they could afford needed care;
  • 68% rated their plans as good, very good or excellent

While many (including me) thought we’d see a spike in health care costs as the previously uninsured got coverage and sought care, the overall cost increase has actually been pretty modest.  From Kaiser Health News:

health and social spending as measured by the Census Bureau grew by only 3.7 percent from the second quarter of 2013 to the same quarter of 2014. Hospital revenue increased 4.9 percent during the same period. Revenue for physician offices barely budged, growing by only 0.6 percent. Medical lab revenue rose 1.9 percent.

Amongst all the positive news let’s not forget there are still a bunch of hurdles to overcome, starting with the next enrollment process, and extending through the expiration of the feds’ backstop insurance plan for Exchange insurers.  There’s a long way to go before we know how PPACA really turns out…

Finally, there’s been a good deal of intellectual arguments back-and-forth about the validity and utility of the Dartmouth Atlas, with critics claiming it is inaccurate and presents a false picture of practice pattern variation, and supporters (of which I am one) taking issue with the critics’ complaints.  The best synopsis I’ve seen comes from Sarah Kliff writing at VOX.

 

Hope your teams win this weekend…

It’s the diagnosis…

If the diagnosis isn’t right, there’s a pretty good chance the treatment won’t be right.

A while back I had an interesting conversation with folks from Best Doctors about this issue, and they provided some interesting statistics about the incidence of misdiagnosis.

  • The American Journal of Medicine reported that at least 15% of all medical cases in developed countries are misdiagnosed.
  • Even doctors are not immune to misdiagnosis:  According to The New England Journal of Medicine, 35% of doctors have reported errors in their own care or that of a family member.
  • A July 2012 BMJ [British Medical Journal] Quality & Safety paper found that of 5,863 autopsies studied, 28% had at least one misdiagnosis.
  • A study in Mayo Clinic Proceedings of 100 autopsies found 26 of 100 patients who died in the hospital had been misdiagnosed. Same study also found “The number of missed major diagnoses remains high, and despite the introduction of more modern diagnostic techniques and of intensive and invasive monitoring, the number of missed major diagnoses has not essentially changed over the past 20 to 30 years.”
  • Review of pathology resulted in changes in interpretation in 29% of breast cancer cases, while in 34% of cases, a change in surgical management was recommended.  A second evaluation of patients referred to a multidisciplinary tumor board led to changes in the recommendations for surgical management in 77 of 149 of those patients studied (52%) (University of Michigan Comprehensive Cancer Center.)

Best Doctors’ own data for US-based cases in 2013 indicated they corrected or refined diagnoses in 37% of cases, and corrected or improved treatment in 75% of cases. 

Of course, BD’s cases are more likely to have a misdiagnosis; their clients send them claims that look problematic.

With that said, there’s no question diagnosticians can get it wrong; in fairness, it can be pretty difficult to pinpoint the specific physiological or anatomical issue that is causing a patient’s symptoms.  As an example, identifying the cause of back pain is notoriously difficult, especially when an MRI indicates an abnormality.  Liberty Mutual’s recently-published research spoke to this issue directly:

Claims in which MRI was performed either within the first 30 days of pain onset or when there was no specific medical condition justifying the MRI yielded significantly higher medical costs, even after controlling for severity. The study found these early or non-indicated MRIs led to a cascade of medical services in the six-month period post-MRI that included electromyography, nerve conduction testing, advanced imaging, injections or surgery. These procedures often occurred soon after the MRI and were 17 to nearly 55 times more likely to occur than in similar claims without MRI.

“Being a highly sensitive test, MRI will quite often reveal common age-related changes that have no correlation to the anatomical source of the lower back pain,” said Glenn S. Pransky, MD, MOccH, Center for Disability Research.

What does this mean for you?

The lesson here is clear – too much reliance on technology can be counter-productive.  And patients who demand MRIs are not helping themselves. 

Medicare Set-Asides and Workers’ Comp

I’m gingerly stepping into a topic I’ve mostly avoided to date – MSAs.  I avoid it because it is mind-numbingly complex, seemingly illogical in application, and served by often-contentious vendors.

NCCI’s Barry Lipton et al just released an excellent synopsis of the MSA situation (opens .pdf) and summary of where things are today. The report focuses on the feds’ review process, wherein they examine payers’ proposed MSAs.  Based on an analysis of data submitted by Gould and Lamb and NCCI’s Medical Call database, a few of the Research Brief’s highlights include:

  • most MSAs are for Medicare-eligible claimants, with 45% over 60
  • MSAs make up 40% of the average total proposed settlement
  • Drugs make up fully half of the MSA amount
  • CMS’ processing time for MSAs has declined of late to a median of 41 days
  • The gap between submitted and approved MSAs has shruck dramatically.
  • 29% of settlements are for amounts over $200,000, while 45% of the MSA amounts are less than $25,000.
  • Most MSA settlements are paid as a lump sum.
  • More than 90% of MSAs completed in December 2012 were approved as submitted.  That came after CMS changed approval vendors in July 2012.

The report is stuffed full of great information and, for those of us who are relatively ignorant of MSAs yet encounter them on occasion, well worth a read.

What does this mean for you?

If you don’t have the time right now, put it in your research file so you’ll have it when you need it.  And you will need it.

Friday catch-up

Today’s catch-up is pretty workers’ comp-centric.  Lots going on, so here we go.

The ACOG (APAX-Coventry-OneCall-Genex) conglomeration continues.  A couple of items of note; APAX is out recruiting several execs to add depth and experience to the senior management ranks.  They are looking for case management pros, and word is at least one former Coventry exec is being targeted for a return.

On the Coventry network side, a well-informed source indicates a couple hospital providers in TN and GA recently renegotiated a new contract with Aetna……and with a significant decrease in the discount % below fee schedule.

On top of the news that the Geisinger and Washington hospital system contracts did NOT include workers’ comp, it is not surprising that payers are seeing a decline in “savings” from the Coventry network.

Cheers from here for former Oregon SAIF CEO John Plotkin; an Oregon court just ruled that former CEO Brenda Rocklin is NOT entitled to a state-paid defense of Plotkin’s suit against her and others.  Rocklin was allegedly involved in ousting Plotkin based on what I can only describe as ludicrous, made-up, laughable charges based on statements by Plotkin that, if they were actually made – which is highly doubtful in some cases – merit no punitive action at all.

Seriously, asking an actuary to speak English is “culturally insensitive”? Since when are actuaries a “culture”? Warning a colleague that your dog is a “humper”? talking about a goats “teats”? Even this liberal progressive Democratic ACLU member Obama fan can’t fathom how anyone could possibly construe those comments as “offensive”.

Kick their asses, John! (and so I am not misconstrued, “asses” means their butts, not their donkeys)

At another state fund, things continue to spiral down.  The latest news (courtesy of WorkCompCentral’s Ben Miller) from North Dakota regards WSI’s (state fund) use of “Independent” medical examiners – which look anything but.

 

Fully three-quarters of the IMEs support the WSI adjuster’s position.

So, no big deal, right?

Wrong.  Those (very) few who follow WSI know long-time and highly-regarded Medical Director Luis Vilella recently resigned.  Why?  Well, it appears his concerns about medical decisions were a major factor; evidently adjusters and their legal department used “outside” medical experts instead of Dr. V.  The full story on this rather distressing – and all too common) lack of judgment by WSI senior management is here.

Notably, David DePaolo noted just yesterday that state requirements around IMEs may have made it difficult for adjusters to locate in-state physicians able and qualified to perform IMEs.  HOWEVER, this is a separate issue from the Dr V problem as it pertains to IMEs and not peer reviews.

Meanwhile, Karen Foshay has produced a three-part series on the California compounding mess.  The FBI is involved, an infant has died, and one of the alleged participants was recorded saying ““I’m a behemoth, I make 8 to 10 million a month.”

Is there a place for compound in workers’ comp? Yes. HOWEVER, the legitimate use of compounds is all too rare as crooks, thieves and liars are using compounds as the route to huge profits, regardless of the consequences for patients, employers, and taxpayers.

Hope your weekend is excellent!

Exchange health insurance premiums in 2015 – the real story

Shockingly, there’s a good deal of confusion out there regarding what will happen with health insurance premiums in 2015, more specifically what’s going to happen in the Exchanges.

Let’s leave aside (for now) the possibility that we’ll have another enrollment mess like we experienced last fall (CMS officials are likely still twitching over that disaster…).  Instead, here’s what we know now.

  1. Health insurers are pretty much guessing what the P&L on their Exchange business will be; there’s just not enough data, many didn’t fully enroll until late spring, and individual health plans’ enrollment is too small to be statistically valid (in many cases).
  2. So, they are pretty much guessing what their rates for 2015 should be.
  3. Some very big players – notably United Healthcare – didn’t participate in Exchanges last year, but will be this fall.  In some instances, their rates are very competitive, in others not so much.
  4. The number of insurers participating and the number of plans they are offering in most exchanges is either level or increasing slightly.
  5. A quick check of rates (thank you Kaiser Family Foundation) in a number of markets indicates prices for the benchmark Silver plans are decreasing by about 1 percent on average.
  6. As Bob Laszewski pointed out in a recent blog post, many of the insurers that were the benchmark Silver plans in 2014 will not be benchmark plans in 2015 – either their prices went up or in some cases they may actually have decreased – either way they no longer qualify to be the benchmark plan (the second cheapest Silver plan).
  7. Bob’s point – and it is certainly valid – is that the federal reinsurance program essentially protects Exchange insurers from significant losses.  No wonder the number of plans participating is increasing.
  8. With that said, from a pure pricing standpoint, 2015 consumer insurance prices declined in a number of markets, and in those where they did increase it was in the single digits.

We won’t know if that will continue for a couple of years, when the federal reinsurance program expires.  The hope is market dynamics, competition among insurers, increased experience with narrow networks, ACOs, and other cost saving mechanisms is able to drive down costs and the federal program is no longer needed.

What does this mean for you?

Consumers love low rates.  Health plans that figure out how to keep them low are going to win big.

Friday catch-up

The first week of September marks the start of the busy season in health care, insurance, and workers comp.  This week certainly maintained that tradition.

here’s what I noticed this week.

Health care costs

The news this week was pretty good - current health care cost trends are significantly lower than earlier projections, although predictions for future increases remain higher than we’d like.  That said, recall past predictions weren’t that accurate.

While we don’t KNOW what the impact of ACA, recovering employment, and health care system chances will be, we can look to Medicare – which isn’t affected much by the economy.  Jonathan Cohn’s take: “the slowdown in Medicare spending (which has little to do with the economy or changes to private insurance) is a powerful indicator that health care really is becoming a more efficient enterprise.” [emphasis added]

Another perspective is from the Washington Examiner - you can tell their bias as they lead with “President Obama’s health care law” – which PPACA decidedly wasn’t. Disregarding the Examiners’ disregard for accurate reporting, they cite a CMS actuary study which indicates government spending on health care will increase from 41% of the total to 48% in 2023.  That is accurate – however recall that CMS’ past projections for Medicare and medicaid growth have been shown to be too high.

 Health reform implementation

One of the concerns about PPACA was the employer mandate would encourage smaller employers to move workers to part-time status.  Early indications are there isn’t much of a shift – if any – to part-time work due to PPACA.  Rather the slow recovery of the economy seems to be the key factor.

A great piece by Incidental Economist Austin Frakt (a long time Health Wonk Review contributor!) in WaPo’s Upshot blog finds that the more competition in local markets, the lower the insurance premiums are.  Specifically, Austin notes the absence of United Healthcare from markets led to premiums that were 5.4% higher than they would have been with UHC participating.

Another take is that premiums in less competitive states were higher than in those with more health plans participating in the markets.

Pennsylvania is joining the ranks of the sane states that are expanding Medicaid, and in so doing will avoid:

*   $37.8 billion in lost federal spending over the next decade

*   $10.6 billion in lost hospital reimbursements over the next decade

*   380,000 low- and moderate- income people would not gain coverage in 2016

Workers’ comp

The BIG news just came out today – a study by McClatchy found rampant misclassification of workers as independent contractors receiving money from the 2009 stimulus. This is a damning indictment of governmental oversight, and one that demands our attention.

Liberty Mutual produced an excellent study that appears to indicate back pain patients who got MRIs early on had worse outcomes than those who did not have MRIs.  Their conclusion:

The impact of non adherent [not consistent with medical treatment guidelines] MRI includes a wide variety of expensive and potentially unnecessary services, and occurs relatively soon post-MRI. Study results provide evidence to promote provider and patient conversations to help patients choose care that is based on evidence, free from harm, less costly, and truly necessary.

Kudos to Liberty for conducting this research.

Remember – no emails, no business after 5 today – unplug!