Category Archives: Medicare Set-Asides (MSAs)

Prescription drug price updates that may affect Medicare Set Asides

To ensure the most accurate Workers’ Compensation Medicare Set-Aside (WCMSA) arrangement, we monitor RED BOOK® Average Wholesale Price (AWP) of the most common medications present in WCMSAs. This practice assists in identifying price changes, which may either positively affect settlement and provide savings, or increases that could hinder the settlement process and increase claims costs.

In the month of June, there were price changes for morphine sulfate tablets – both immediate release and extended release—brands MS Contin and Dilaudid, opioids commonly used for chronic pain. Products with price increases are relatively insignificant at less than 10 percent. However, the decreases are greater than 50 percent, and could provide savings on cases where these medications are prescribed.

The following products in the table have a change in AWP, confirmed in the Centers for Medicare and Medicaid Services (CMS) WCMSA portal.

Drug Name

NDC

Form

Strength

AWP Unit Price Change

Morphine Sulfate

42858-0801-01

ER Tablets

15mg

-$0.67

Morphine Sulfate

42858-0802-01

ER Tablets

30mg

-$1.48

Morphine Sulfate

42858-0803-01

ER Tablets

60mg

-$2.48

Morphine Sulfate

42858-0804-01

ER Tablets

100mg

-$2.09

Morphine Sulfate

00054-0235-25

Tablets

15mg

$0.08

Morphine Sulfate

00054-0236-25

Tablets

100mg

$0.14

MS Contin

42858-0515-01

ER Tablets

15mg

$0.43

MS Contin

42858-0631-01

ER Tablets

30mg

$0.82

MS Contin

42858-0760-01

ER Tablets

60mg

$1.61

MS Contin

42858-0799-01

ER Tablets

100mg

$2.38

Dilaudid

42858-0122-01

Tablets

2mg

$0.24

Dilaudid

42858-0122-01

Tablets

4mg

$0.37

Dilaudid

42858-0338-01

Tablets

8mg

$0.71

Please note that RED BOOK AWP is subject to change and this pricing is subject to an increase or decrease in the future.

CMS uses the lowest AWP when reviewing WCMSA arrangements. The changes in price of these medications will immediately affect the prescription costs of WCMSA’s (both present as well as prior WCMSA’s that have not settled and there is no CMS determination issued). Optum will proactively contact clients when we have previously completed a WCMSA if we identify a significant impact to a case. It is our recommendation that carriers, TPA’s and claim handlers review their open cases to determine the affect these price changes may have on each individual claim.

If a price increase will adversely affect your case and preclude settlement, Optum has clinical mitigation products available to assist with lowering claim costs and aid in the settlement process.

Optum will continue to inform the industry of AWP pricing and other changes that may affect WCMSA arrangements.

Prescription drug updates may positively affect Medicare Set Aside

As part of our best business practices, we continually monitor RED BOOK®Average Wholesale Price (AWP) of the most common medications present in Workers’ Compensation Medicare Set-Aside (WCMSA) arrangements. This practice assists in identifying price changes positively affecting WCMSAs.

The month of May brought price drops for several different strengths of gabapentin, commonly used to treat neuropathic pain.

The products in the following table have a reduced AWP, confirmed in the Centers for Medicare and Medicaid Services (CMS) WCMSA portal.

Product Name NDC Code Dosage Form Strength AWP Unit Price Reduction
Gabapentin 10135-0646-05

 

CAP 400 mg $0.07
Gabapentin 10135-0647-05

 

TAB 600 mg $2.01
Gabapentin 10135-0648-05 TAB 800 mg $0.37

Please note that RED BOOK AWP is subject to change and this pricing is subject to an increase or decrease in the future.  

CMS uses the lowest AWP when reviewing a WCMSA. The lower price of these medications will immediately affect the prescription costs for WCMSAs (both present as well as prior WCMSA’s that have not settled and there is no CMS determination issued). We will contact our clients in reference to previously completed WCMSA’s where these medications have been prescribed. It is our recommendation that carriers, TPAs and claim handlers review cases to determine the benefit from decreased cost of these medications.

Optum will continue to keep the industry informed of changes in AWP pricing, in addition to when generic equivalents enter the market.

New WCRC, Capitol Bridge: Changes and Trends

Capitol Bridge, LLC assumed the reigns as the new Workers’ Compensation Review Contractor (WCRC) on 3/19/2018.

Immediately following the transition to Capitol Bridge, it was noted that they have a different methodology for pricing.  This has caused a slight increase in counter low/high determinations as the industry adjusts to the pricing methodology changes.

In addition to the above, Optum has found the turn around time for completed  WCRC determinations has increased from 9 days to 20 days.  Hopefully this is just a slow down due to the transition and will level out in the near future.

There have been several “hearing loss” cases which have been returned with counter high allocations for future office visits and additional audiograms over the claimant’s life expectancy.  Since Medicare does not cover ongoing office visits or testing once the claimant has been diagnosed with simple hearing loss (no other ear conditions noted), “hearing loss” claims have historically been approved as Zero MSA allocations.  Optum is currently resubmitting these cases for additional review and reconsideration of a Zero MSA allocation due to the error of inclusion of non-Medicare covered items/services.

The above changes appear to be due to the transition to the new contractor and should be temporary.  It was expected that there would be a short adjustment period as a result of the transition.   Optum will continue to report any additional trends we become aware of that will affect WCMSAs in an ongoing effort to keep our clients apprised of changes as they occur.

Don’t Rely on an MSP Conditional Payment Notice when Executing a Settlement Agreement and General Release

In a recent decision on 3/13/2018, Mayo v. NYU Langone Medical Center, the courts voided a settlement on the grounds of a mutual mistake because both the plaintiff and defense relied upon a conditional payment notice rather than a conditional payment demand or initial determination. The plaintiff provided a conditional payment notice that was dated several months prior to settlement in the amount of $2,824.50, which represented what the Centers for Medicare and Medicaid Services (CMS) believed to be payments made by Medicare at that time.

After the settlement was reported, CMS issued a demand in the amount of $145,764.08 to the estate of the Medicare beneficiary, who had exhausted all appeals with CMS in an attempt to reduce the Medicare recovery amount. The court rejected the arguments from the defense, stating that it was the plaintiff’s responsibility to obtain the final conditional payment amount from Medicare.

Best practices include obtaining a conditional payment notice pre-settlement so that all parties are aware that related conditional payments demanded must be reimbursed to Medicare. Settlement language must be clearly worded so that the parties know who is obligated to repay Medicare and whether the conditional payment reimbursement will be paid “out of” or “in addition to” the total settlement amount. When a settlement involves a Medicare beneficiary, both parties should not close their files until confirmation that conditional payment recovery has been fully satisfied.

Optum Settlement Solutions can provide assistance in:

  • Researching the Medicare Secondary Payer Recovery Portal to track potential conditional payments assigned, or added, to your claim, including interest being accrued
  • Obtaining a conditional payment summary pre-settlement so you may evaluate your case and plan your negotiation strategy
  • Providing notice to CMS of a settlement date and amount to elicit a final amount owed
  • Reviewing Medicare Secondary Payer (MSP) compliance settlement language
  • Appealing unrelated conditional payments demanded by CMS recovery contractors
  • Assuring that the MSP conditional payment debt has been fully satisfied