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CMS Releases Additional Information Regarding Use of WCMSAP for Prescription Drug Information

By , September 23, 2014 3:46 pm

We previously posted a blog regarding CMS updating the Workers’ Compensation Medicare Set-Aside Portal (WCMSAP) which will allow users to directly input prescription drug information and calculate the proposed prescription drug portion of the WCMSA proposal as of October 6, 2014. To read our prior blog, click here.

CMS has released some additional information regarding how this enhancement will work through a presentation posted on its website. To view the presentation, click here. One part of the presentation that was noteworthy to Helios is that this presentation seems to indicate that submitters will be able to obtain prescription pricing information prior to submitting the MSA to CMS. This will be helpful to submitters so that estimates can be obtained and the most accurate pricing information can be utilized at the time the WCMSA is ready to be submitted.

This enhancement is not yet up on the portal, but should be released on October 6, 2014 as indicated by CMS. Once the enhancement is up and running on the portal, we will provide subscribers with more feedback on its functionality.

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NCCI Publishes Medicare Set Aside and Workers Compensation Study

By , September 19, 2014 9:47 am

The National Council on Compensation Insurance (NCCI) is an insurance rating and data collection bureau specializing in workers’ compensation. It is headquartered in Boca Raton, Florida with regional offices throughout the United States. The current president and CEO is Stephen J. Klingel. A board of directors composed of representatives of affiliated insurers and outside organizations oversees its activities.

Owned by its member insurers, NCCI collects data covering more than four million workers compensation claims and two million policies. NCCI uses this information to provide ongoing analysis of industry trends in workers’ compensation costs, workers compensation insurance rate and loss cost recommendations, cost analysis of proposed legislation regarding workers’ compensation regulations and benefits, and analysis of judicial and regulatory decisions on workers’ compensation. NCCI is considered the country’s authority on these issues.

NCCI produces a number of manuals that govern the details of how workers compensation insurance premiums are calculated in many (but not all) states. Among these manuals are the Basic Manual (which sets out rules on the classification code system, payroll amounts used to compute premiums, and changes in classifications and premiums); Experience Rating Manual (which details how experience modification factors are computed and used in workers compensation insurance premiums); and the Scopes Manual (which details how NCCI intends the various classification codes to be assigned to various kinds of employment).

NCCI hosts an Annual Issues Symposium in May of every year, at the Cypress Hyatt Regency in Orlando, Florida. It normally delivers national trends, statistics, and analysis of recent or pending legislative and regulatory proposals affecting workers compensation rates and costs. During this year’s AIS, NCCI delivered the results of its long anticipated review and analysis of Medicare set aside data. The program was presented on Friday afternoon on May 9, 2014 by Barry Lipton, Practice Leader and Senior Actuary at NCCI. The power point presentation delivered by Mr. Lipton can be found at https://www.ncci.com/Documents/AIS2014-Lipton.pdf.

Mr. Lipton indicated that a sample of approximately 2,200 completed MSAs dating between September 2009 and November 2013 were used. The sample included proposed total settlement, proposed MSA, and final MSA approved by CMS, which included a breakdown of Medicare Parts A & B expenditures (hospital and physician related services) and Part D expenditures (prescription drugs).

Mr. Lipton indicated that almost all MSAs (94%) in the sample were for claimants who were Medicare entitled at the time of settlement. Only 6% were not yet entitled to Medicare, but likely eligible within 30 months of settlement. Of those that were currently entitled to Medicare, 29% were eligible due to age, while 65% were eligible due to entitlement to SSD benefits.

Mr. Lipton reported that in 20% of the MSAs reviewed by CMS, the claimant was younger than 50 years old, 34% were between ages 50 and 59, 37% were between the ages 60 to 69, and 8% were older than age 70. He also reported that 41% of the MSAs reviewed were for settlements less than $100,000, 30% for settlements between $100,000 and $200,000, and 29% for settlements over $200,000.

Mr. Lipton also discussed the amounts of MSAs in the sample. He found that 45% of the MSAs reviewed by CMS had MSA amounts under $25,000, 16% were between $25,000 and $50,000, 18% were between $50,000 and $100,000, 12% were between $100,000 and $200,000, and 8% were over $200,000. Based on this information, Mr. Lipton reported that MSAs are about 40% of proposed total settlements.

Mr. Lipton also provided information of CMS processing time periods. He indicated that after a period of dramatic lengthening (average processing time increasing from 68 days on 1st quarter of 2010 to 274 days on 4th quarter of 2012), CMSMSA processing time dropped to 104 days average processing time and 41 days median processing time by the 4th quarter of 2013. The median MSA approved amount however has remained stable since 2010, averaging between $32,349 and $48,634.

Mr. Lipton also informed the audience that the gap between proposed and approved MSAs has been shrinking over the last 3 to 4 years. Since the average proposed MSA has increased from $66,801 to $78,776 from 2010 to 2013, and the average proposed MSA has decreased from $107,082 to $86,397 from 2010 to 2013, the ratio of overall approved to proposed MSAs has declined over the same time period from 1.60 to 1.10.

Mr. Lipton concluded that based on the sampling, the majority of MSAs are for claimants who are Medicare entitled due to disability, not age. He also concluded that MSAs are about 40% of the total settlement amount, with prescription drugs about half of same. He also concluded that MSA processing time has recently declined, and so has the differences between proposed and approved MSAs.

At the end of his presentation, Mr. Lipton indicated NCCI would publish a formal study of these findings in late summer or early fall of 2014. On September 15, 2014, NCCI published its Research Brief on Medicare Set Asides and Workers Compensation. The study can be found at https://www.ncci.com/documents/MSA-Research.pdf.

Rafael Gonzalez is Vice President of Strategic Solutions at HELIOS in Tampa, Fl. HELIOS is a national leader in MSP settlement solutions, including Mandatory Insurer Reporting, Conditional Payment Resolution, and Medicare Set Asides. You may contact Rafael at rafael.gonzalez@helioscomp.com, or at 813.612.5592 to speak with him about HELIOS settlement solutions products and services designed specifically for the challenges of today’s industry as well as the individual needs of each client.

 

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DEA Classification Change for Hydrocodone Combination Products (HCPs)

By , September 15, 2014 10:27 am

When the Controlled Substances Act was passed in 1970, pure hydrocodone was classified as Schedule II, while its combination products, HCPs, (those containing hydrocodone as well as specific amounts of other medications such as acetaminophen or ibuprofen) were classified as Schedule III.  On Friday, August 22, 2014, the DEA published a final rule in the Federal Register moving hydrocodone combination products (HCPs) from Schedule III classification to the more restrictive Schedule II.

Controlled Substances are classified into “schedules,” Schedule I drugs are considered highly addictive with no medical purpose; Schedule II are those substances noted to have a medical purpose that have a greater potential for abuse and harm. This final rule imposes all regulatory sanctions and controls regarding a Schedule II medication on all those who handle (manufacture, distribute, dispense, prescribe, etc) HCPs and will go into effect October 6th, 2014.

How will this rescheduling of HCPs affect the worker’s compensation industry and ultimately Medicare Set Asides?

HCPs are among the top prescribed drugs within the workers’ compensation industry. The combination of the additional analgesic, such as acetaminophen, with the hydrocodone has been found to give additive analgesia as compared to the same doses of either agent alone; therefore, making the HCPs more popular for utilization for the treatment of moderate to moderately-severe pain. Some of the most common brand names for these combination medications are Norco, Vicodin and Lortab(Hydrocodone/Acetaminophen) along with Vicoprofen (Hydrocodone/Ibuprofen).

This reclassification will place more stringent requirements on the handling of HCPs. For the manufacturers as well as pharmacies this means changes must be implemented in the areas of distribution, dispensing, record keeping and storage.  These changes will lead to increased costs for those handling the HCPs which will more than likely lead to an increase in AWP (average wholesale price) as well as the price at time of dispensing.   We may also see a trend away from utilization of the HCPs which are relatively inexpensive to more costly brand name and generic medications in a less restrictive scheduled classification or even to a more expensive long acting hydrocodone such as the newly released Zohydro ER. This would lead to higher prescription costs within the workers’ compensation claim and ultimately the prescription allocation within MSAs.

The new requirements for HCPs as Schedule II medications will also set limitations on prescribing. Schedule II medications must be hand written and may not be faxed (the exception being for Hospice) or called into pharmacies thus making it more difficult for a claimant to obtain their medication. Many states will allow only a one month prescription to be written per visit while a few will allow up to a 90 day supply. Previously when under the schedule III classification, the prescriptions for HCPs were valid for up to 6 months.  This will increase the number of office visits required, along with the expense of transportation if provided for claimant, as well as utilization of an interpreter when necessary, all of which will increase the medical cost incurred for the claimant to obtain the prescription for his or her HCP. This in turn will also increase the cost within the claim and ultimately the medical allocation within MSAs.

It remains to be seen how much the reclassification of HCPs to a schedule II will impact the treatment of pain management within the workers’ compensation industry.  However, it just as important to see whether it will indeed reduce the abuse, diversion and addiction issues that prompted the DEA to adjust its classification in the first place.

Helios Settlement Solutions will continue to keep you informed concerning the HCPs and any other changes that will affect prescription drug costs within the claims and ultimately MSAs.

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CMS Issues Alert Regarding Change in Reporting SSNs/HICNs Pursuant to the SMART Act

By , September 11, 2014 2:59 pm

Just yesterday, September 10, 2014, CMS issued an alert which modifies the requirements relating to the reporting of HICNs and SSNs by NGHP RREs. The alert can be found here.

Pursuant to the SMART Act, CMS was required to do the following: “not later than 18 months after the date of enactment of this bill, the Secretary of HHS shall permit but not require to access or report the beneficiary’s social security account numbers or health identification claim numbers.”

As a result, CMS has issued this alert which provides that effective January 5, 2015, where an NGHP RRE cannot obtain an individual’s HICN or full SSN, RREs may report the following data elements that will enable CMS to properly identify a Medicare beneficiary: 1) last five digits of SSN, 2) first initial, 3) surname, 4) date of birth, and 5) gender.

If NGHP RREs are unable to obtain or do not provide the HICN, full SSN, or any of the above listed data elements, they must document their attempts to obtain this information (RREs may use the model language provided by CMS located in the Downloads section of the MIR for NGHP page at http://go.cms.gov/mirnghp).

CMS states within the alert that a subsequent alert will be published prior to the January 5, 2015 implementation, which will include additional instructions for entry of the partial SSN into the Claim Input File or Query Input File.

While Helios Settlement Solutions applauds CMS for taking action on this requirement of the SMART Act, some questions remain:

1) Within the alert, CMS states that they currently highly recommend, but do not require, that NGHP RREs submit the HICN or full SSN as part of their reports. However, CMS does currently require the HICN/full SSN to obtain a match in their system when reporting, so this statement seems to contradict current requirements. We assume that this is a scrivener error and that CMS meant to say that full SSNs/HICNs will be recommended but not required come January 5, 2015.

2) While it is helpful that an RRE will no longer have to obtain a full SSN come January 5, 2015, it is unclear that if a claimant is unwilling to provide a full SSN, whether they would then be willing to still provide the last 5 digits of the SSN. On a good note, however, and as mentioned above, if the RRE still cannot obtain the last 5 digits of the SSN, the RRE can document its attempts to obtain this information.

Helios will keep our subscribers updated on any additional developments. For questions, please contact asktheexperts@medicareinsights.com.

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