A couple weeks ago I started a three-part series on what’s going to affect workers comp in 2012. After a few diversions and current-events-driven-interruptions, we’re finishing up today with the impact of MSAs
Pharmacy costs – and CMS’ treatment of same – are causing many payers to delay or reconsider settling claims. While MSAs are not, (very) strictly speaking, required to close claims in most jurisdictions (Maryland being the exception), as a practical matter, payers are quite reluctant to settle claims without an approved MSA.
From conversations with several payers, MSA experts, and claims execs, it is becoming apparent that CMS’ current ‘policy’ related to drugs has reached the point where it is severely affecting claims handling.
There are at least three major issues here – and likely a few others of just-slightly-less importance.
First, CMS is valuing drugs at the current AWP, regardless of the actual price paid, brand status, or likely future pricing. Many scripts are currently paid below AWP, due either to state fee schedules that are below AWP or PBM contracts that offer even more reductions. I’m not sure of the logic here, but it does appear counter-intuitive.
Second, a similar ‘policy’ appears based in the belief that the claimant’s current treatment regimen will never change, that it is set in stone. The drugs dispensed to the claimant at the moment the MSA is developed are what the valuation is based upon. If there are brand drugs that are likely to go off-patent (a definite until the recent OxyContin re-branding), there’s no change in estimates of future cost to account for that. If the meds are typically prescribed for a brief duration, no matter.
In the latter case, CMS has a pretty good case; there are far too many claimants taking drugs today that most reasonable practitioners would characterize as only appropriate for a limited duration – Schedule II narcotics as perhaps the prime example. I’d suggest that in this instance, we’ve done it to ourselves.
Finally, CMS takes a rather dogmatic view of off-label prescribing – it doesn’t like it. This significantly complicates the picture as many claimants’ drug treatment regimens include off-label use of meds. While off-label use can be completely inappropriate, in many instances it is not. Thus, the ‘policy’ can lead to confusion and difficulties in reaching agreement with CMS.
As a result of these and other MSA-related complications, most payers are not able to settle claims that they’d very much like to get off their books once and for all. Claim loads are increasing as a result, and reserves are as well.
Several industry stakeholders are working diligently to resolve these and other issues. What is clear is CMS is going to ensure they are protecting CMS’ interests. While this is a generally good thing (we taxpayers are thereby protected as well), the current stalemate is not helping anyone.
Mar
28
Hello Mr. Paduda, While your statements are correct regarding the challenges associated with the CMS review of Part D for WCMSAs, it is interesting that Medicare Advantage C programs sucessfully employ utilization review stategies in mitigating Rx costs for and part of that strategy includes consideration of the impact of medication use with advancing age. It is unreasonable to allocate an Rx regimen based upon a single point in time without consideration for the impact of prescription use over the life expectancy. Therefore, a proactive claims management approach, which includes the engagement of the claimant’s treating physician in determining a reasonable long term prescription drug plan, is critical to reducing Rx exposure on WCMSAs. Deborah Pfeifle, President & COO, Gould & Lamb, LLC
“In the latter case, CMS has a pretty good case; there are far too many claimants taking drugs today that most reasonable practitioners would characterize as only appropriate for a limited duration – Schedule II narcotics as perhaps the prime example. I’d suggest that in this instance, we’ve done it to ourselves.”
Joe: I agree with your statement above about the limited duration of the narcotics but can you elaborate on your opinion that “we’ve done it to ourselves”?