Category Archives: Medicare Set-Asides (MSAs)

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

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 February brought price drops of the following medications:

  • buprenorphine/naloxone (Suboxone®) commonly prescribed for opioid dependence
  • diclofenac (Voltaren®) in multiple strengths used to treat pain
  • methadone (Dolophine®) commonly prescribed for detoxification or pain management
  • bupropion (Wellbutrin®) in multiple strengths prescribed for depression
  • clonazepam (Klonopin®) used for anxiety or panic disorders
  • quetiapine (Seroquel®) commonly used to treat bipolar disorder, depression or schizophrenia
  • tramadol (Ultram®) used to treat 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

Bupropion Hydrochloride

00781-5528-31

TER

150 mg

$3.92

Bupropion Hydrochloride

00781-5529-31

TER

300 mg

$2.24

Diclofenac Sodium

61145-0102-12

ECT

75 mg

$0.51

Buprenorphine Hydrochloride/Naloxone Hydrochloride

00406-8020-03

SL TAB

8/2 mg

$0.34

Clonazepam

00781-8018-05

TAB

0.5 mg

$0.11

Diclofenac Sodium

61145-0101-18

ECT

50 mg

$0.10

Quetiapine Fumarate

00904-6639-61

TAB

50 mg

$0.09

Tramadol Hydrochloride

68094-0017-61

TAB

50 mg

$0.06

Methadone Hydrochloride

66689-0898-40

TBS

40 mg

$0.04

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.

Prescription Medication Updates That May Affect Your Medicare Set-Aside

We continually monitor pricing of the most common medications seen in Workers’ Compensation Medicare Set-Aides (WCMSAs) in order to identify pricing changes affecting MSAs positively. The month of December brought a price drop for gabapentin 800mg tablets commonly used to treat neuropathic pain.

Below is the product confirmed to have a reduced AWP and confirmed in the Centers for Medicare and Medicaid Services (CMS) WCMSA portal.

Product name NDC Code Dosage form Strength AWP unit price reduction
Gabapentin 00904-6586-61 TAB 800 mg $2.16

Please note RED BOOK® AWP (Average wholesale price) is subject to change and this pricing is subject to an increase or decrease in the future.  

CMS will utilize the lowest AWP published by RED BOOK when reviewing a WCMSA, therefore the lower pricing of these medications will immediately impact the prescription costs for WCMSAs (both present as well as prior WCMSAs that have not settled and there is no CMS determination issued) where these drugs are prescribed.

It is our recommendation carriers, TPAs and claim handlers review cases where the above noted medication is prescribed to determine the benefit from decreased cost. We will proactively reach out to our clients in reference to previously completed WCMSA’s where this medication was prescribed and  continue to monitor future portal changes and generic equivalents introduced to the market in order to keep the industry informed.

Prescription medication updates that may affect your Medicare Set Aside

We continually monitor RED BOOK® Average Wholesale Price (AWP) of the most common medications seen in Workers’ Compensation Medicare Set-Aides (WCMSA) in order to identify pricing changes affecting MSAs positively. The month of September brought additional price drops for the medication quetiapine fumarate (Seroquel®), in 100mg and 300mg tablets, commonly prescribed to treat bi-polar disorder.

Below are the products we have identified with a reduced AWP and confirmed in the Centers for Medicare and Medicaid Services (CMS) WCMSA portal.

Product name

NDC Code

Dosage form

Strength

AWP unit price reduction

Quetiapine Fumarate

00904-6640-61

TAB

100 mg

$5.89

Quetiapine Fumarate

00904-6642-61

TAB

300 mg

$9.60

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

CMS will utilize the lowest AWP when reviewing a WCMSA, therefore the lower pricing of these medications will immediately impact the prescription costs for WCMSAs (both present as well as prior WCMSA’s that have not settled and there is no CMS determination issued) where these drugs are prescribed.

It is our recommendation carriers, TPAs and claim handlers review cases where the above noted medications are prescribed to determine the benefit from decreased cost. We will proactively reach out to our clients in reference to previously completed WCMSA’s where these medications were prescribed and continue to monitor future AWP changes and generic equivalents introduced to the market in order to keep the industry informed.