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By Settlement Solutions, January 30, 2012 2:16 pm

Compliance with the Medicare Secondary Payer (MSPMedicare Secondary Payer Act) Act is critical for liability claims, yet confusion remains in the industry as to how to best achieve it.    PMSI’s upcoming webinar will not only provide guidance as to how to take Medicare’s interests into account in liability settlements, but will also cover recent updates from CMSCenters for Medicare and Medicaid Services/ MSPRCMedicare Secondary Payer Recovery Contractor - responsible for verification of conditional payments and recent MSPMedicare Secondary Payer Act liability case law.  Highlights of the webinar include:

Liability MSAsMedicare Set-Asides (LMSAsLiability Medicare Set-asides)

•  CMSCenters for Medicare and Medicaid Services issues their first memorandum regarding LMSAsLiability Medicare Set-asides in September 2011
• An informal “handout” issued by Region VI of CMSCenters for Medicare and Medicaid Services addressing liability issues and industry concerns

Recent Changes from the MSPRCMedicare Secondary Payer Recovery Contractor - responsible for verification of conditional payments Regarding Conditional Payments

• Fixed Percentage Option for settlements below $5,000
• Low Dollar Threshold for settlements below $300
• Self Calculation Option for settlements below $25,000

Medicare’s Position on Comparative Negligence as it relates to Conditional Payments

• Discussion of the recent Hadden decision and its application

Case Law Update

• Hinsinger v. Showboat Atlantic City, wherein a court in New Jersey allowed a Plaintiff Attorney to collect his fees out of the MSAMedicare Set-Aside, which is contrary to guidance provided in published CMSCenters for Medicare and Medicaid Services Memoranda.
• Big R Towing v. Benoit, a Jones Act/liability settlement in which the court found that a portion of the settlement should be set aside for future medical expenses payable by Medicare despite a lack of formal guidance from CMSCenters for Medicare and Medicaid Services as it relates to liability.

Heather Schwartz, Esq., MSCC, CHPE, CLMP, CMSP will offer her expertise in reference to these issues on Tuesday, February 21, 2012 from 1 PM -2 PM EST.

Credit for Continuing Education and Continuing Legal Education is pending approval in California, Florida, Pennsylvania, Illinois, North Carolina, South Carolina, Michigan, Georgia, Virginia, Louisiana and Kansas.   For more information on obtaining CEContinuing Education or CLEContinuing Legal Education credit for this webinar or to register, please click here.

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By Settlement Solutions, January 25, 2012 2:59 pm

PMSI has frequently been asked what the MSPMedicare Secondary Payer Act obligations are when a settlement occurs and the claimant is not currently receiving Medicare benefits, but previously applied for SSDI benefits. It is clear that there is no conditional payment reimbursement obligation to Medicare if the claimant is not a beneficiary; however, whether an MSAMedicare Set-Aside is necessary is not always entirely clear. Generally, an MSAMedicare Set-Aside would be appropriate in these types of situations, but it is important to understand why, since the issue is not “black and white.” Before diving into this issue, let us first explore the background of SSDI and how it relates to Medicare eligibility.

What is Social Security Disability?

Social Security Disability Insurance (SSDSocial Security Disability or SSDI) is a payroll tax-funded, federal insurance program of the United States government. It is managed by the Social Security Administration (SSASocial Security Administration) and is designed to provide income supplements to people who are restricted in their ability to be employed because of a notable disability (usually a physical disability). SSDI can be supplied on a temporary or permanent basis, dependent upon whether the person’s disability is temporary or permanent.

A disabled person can file an application for SSDI benefits with the SSASocial Security Administration. If SSDI benefits are granted, the monthly amount received is based on payments previously made into the system while the disabled individual was working. Only legal residents and citizens of the United States are eligible for SSDI and they must have enough eligible work quarters to qualify for benefits (generally they need to have worked 5 of the last 10 years). It is well known that the SSASocial Security Administration denies the majority of SSDI applications upon first request. Typically, an applicant will have to re-apply or obtain the assistance of an attorney or SSDI specialist to obtain benefits as the standard for receiving benefits is quite high. Basically, an applicant must prove to the SSASocial Security Administration that they can no longer work or have a severely limited work capacity due to their injury/disability. This disability is usually verified by medical reports and opinions provided to the SSASocial Security Administration. 

Once an SSDI recipient receives benefits for twenty-four months, they will automatically become enrolled in Medicare.  It is for this reason that application for SSDI benefits is relevant to Medicare entitlement and the world of MSAsMedicare Set-Asides.

Why should an MSAMedicare Set-Aside be considered on settlements where the claimant has applied for SSDI benefits?

CMSCenters for Medicare and Medicaid Services’ Memorandum dated April 22, 2003 states that a claimant has a “reasonable expectation” of Medicare enrollment if they have applied for SSDI, or if they were denied benefits and anticipate appealing the determination. Whether a claimant anticipates appealing the denial or not is rather subjective since the claimant could always change their mind at any time. They may also not be confident about their case for SSDI benefits, and may later seek the services of an attorney and find out that their case is stronger than they originally thought.  

The decision to utilize an MSAMedicare Set-Aside in a settlement where the claimant has applied for SSDI may not always be clear, particularly if the claimant was denied benefits. It is up to the parties to decide whether they will elect to do an MSAMedicare Set-Aside in these scenarios according to their “appetite for risk.” However, it is important to keep in mind that once a claimant begins receiving SSDI benefits, Medicare enrollment will automatically occur after twenty-four months. If the claimant becomes a Medicare beneficiary within thirty months of the settlement and an MSAMedicare Set-Aside was not included, the claimant may have to expend the entire settlement on Medicare covered expenses related to the injury before Medicare will provide coverage.

Arguably, the best practice for settlements involving a claimant who has applied for SSDI is to consider an MSAMedicare Set-Aside in order to protect all parties and avoid loss or interruption of the claimant’s future Medicare benefits.  However, the decision regarding whether to include an MSAMedicare Set-Aside in the settlement of the case rests with the parties to the settlement.  If the parties wish to utilize the voluntary CMSCenters for Medicare and Medicaid Services submission process to receive CMSCenters for Medicare and Medicaid Services approval of the MSAMedicare Set-Aside, the total settlement must be over the current $250,000 review threshold. In addition to a claimant’s right to appeal a denial of SSDI benefits, they can also request a re-opening of their case, or file a new case.  This should also be considered when the parties are making the determination to include an MSAMedicare Set-Aside in the settlement or not.  There are specific timelines and criteria which apply to re-opening an existing case which are listed below, but a new claim can be filed at any time. 

What are the timelines to re-apply or re-open a claim once a claimant has been denied SSDI benefits?

If the Social Security Administration denies benefits, and the claimant disagrees, they have the following options:

• 60 days to appeal the determination
• 12 months (from the date of the determination) to re-open the case for any reason
• 4 years (from the date of the determination) to re-open the case for “good cause” only
• And any time within the claimant’s life a claimant can be re-opened if a claimant can meet 1 of 11 conditions set forth by the Social Security Administration. We won’t name them here, but these 11 conditions can be found in 20 CFRCode of Federal Regulations 404.988.
• A claimant can always file a new case with the SSASocial Security Administration at any time

In summary, there are numerous ways that a claimant can seek a reversal of the SSASocial Security Administration’s decision or re-apply for SSDI benefits if they are initially denied. It is well known that the SSASocial Security Administration generally denies a large portion of applications upon first review, however most claimants will re-apply and the success rate is generally much greater the second time around.  Settlement parties should consider this carefully when determining whether to establish an MSAMedicare Set-Aside in a settlement where the applicant has applied for SSDI, as the lack of an MSAMedicare Set-Aside could cause the claimant to lose Medicare coverage, up to the amount of their settlement.

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By Settlement Solutions, January 23, 2012 4:58 pm

PMSI is featured on WorkCompWire in the Leaders Speak section. The article, “Exploring the Differences in Workers’ Compensation and Group Health Pharmacy Programs,” provides a point-by-point analysis between workers’ compensation and group health. The differences between the two types of insurance as noted in the article, require the expertise of PBMs which focus solely on each discipline. The unique differences, regulations and details which accompany both types of transactions require the full focus of a PBMPharmacy Benefit Management specializing in each market. A workers’ compensation-focused PBMPharmacy Benefit Management, such as PMSI, with the clinical staff and expertise to fully understand the unique requirements of this market, can make the biggest impact on appropriate care and containing costs.

To download the full article please visit PMSI Expert Insights.

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By Settlement Solutions, January 16, 2012 2:29 pm

What is Carisoprodol?
Carisoprodol (brand name Soma) is a skeletal muscle relaxant approved by the FDAU.S. Food and Drug Administration for use in painful musculoskeletal conditions on an acute basis.  When the 350mg strength dosage was approved 53 years ago, the medication was classified as a non-controlled, non-scheduled drug.  However, on December 12, 2011 the DEADrug Enforcement Administration ruled under the CSAControlled Substance Act that all Carisoprodol products are to be reclassified as schedule IV, controlled substances as of January 12, 2012 due to the high potential for abuse and addictive qualities.

Carisoprodol’s increase in popularity as a frequently prescribed muscle relaxant has led to a rise in its potential for abuse.  The addictive properties of this medication are due to the body metabolizing it into Meprobamate (a schedule IV, controlled substance).  Carisoprodol was also found to accelerate the affects of other drugs, such as Hydrocodone and Codeine, resulting in greater abuse potential among users. 

What are Controlled Substances and how are they classified by the DEADrug Enforcement Administration?
Controlled Substances are categorized into “schedules”.  Schedule I drugs are considered highly addictive with no medicinal purpose, whereas a schedule V drug has a relatively low potential for abuse and is recognized for its accepted medicinal use.  Prior to the DEADrug Enforcement Administration ruling, several states had already taken it upon themselves to classify Carisoprodol as a schedule IV, controlled substance at the state level due to its addictive properties.  Consequently, the reclassification of this drug to a controlled substance on the federal level is not surprising. 

How will the reclassification of Carisoprodol impact the workers’ compensation industry? 
As a controlled substance, prescriptions for Carisoprodol will now have restrictions on the length of time the prescription remains valid and on the number of refills allowed during this time frame.  Previously, a prescription was valid for one year from the date it was written with no limitation on the number of refills.  As a controlled substance, prescriptions will be valid for only 6 months from the date they are written with 6 total refills allowed (original & 5 refills).  If only 4 refills are used in 6 months the prescription is no longer valid and the patient would not be allowed to obtain the remaining two refills. This could result in double the number of office visits required for the patient to maintain use of this medication which in turn produces increased costs to insurance carriers.  Only those prescribers with a valid DEADrug Enforcement Administration license (authorizing them to write for controlled substances) will be allowed to write prescriptions for Carisoprodol. 

As a result of this change, the industry may see a decrease in the number of prescriptions written for Carisoprodol and an increase in those written for its alternatives such as Tizanidine, Cyclobenzaprine, Metaxalone, Methocarbamol, and Baclofen, which are not controlled substances.  If this occurs, insurance carriers could see an increase in prescription costs depending on which alternative medication is prescribed.  The most commonly prescribed strength of Carisoprodol is 350mg costing approximately $.09/tab.  Tizanidine 4mg costs $1.39/tab and Metaxalone 800mg is $8.09/tab.  If an injured individual is switched to either of these medications, prescription costs could increase significantly.

PMSI will continue to follow any further changes to Carisoprodol’s use and classifications as well as other common drugs in workers’ compensation claims.  As a leader in providing solutions for cost containment, we understand that these changes could greatly impact prescription drug costs in claims.