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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.


2 thoughts on “MSAs – there’s more to the story”

  1. Just when I thought you were going to jump into the MSA world, and provide us with your usual brilliant insight and analysis, you leave us just like that. Come back Joe, stay and lead us through it! My best!

  2. I appreciate your acquired observation that the proscibed MSA “amount” differs wildely from vendor to vendor, each professing that “they have it right”. A few of the “big” players have in house MSA evaluators meaning they spent on the infrastructure (i.e. salaries) to produce a competent evaluation (i.e. the MSA). The rest of us are quite frankly vacillating from vendor to vendor. Some erring on the side of the product producing the lowest allocation to the product producing the highest allocation. The question not addresssed is when will CMS give the industry some of the parameters/paradigms that they will accept, not on a claim by claim basis but in the generelality of costs, as they just announced regarding their newly announced website for projecting medication costs. And let us not forget their (CMS) continual mantra that their is no “safe harbor” even on MSA applications that they agree with. Talk about a dysfuntional system.

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Joe Paduda is the principal of Health Strategy Associates




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