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Sheena Harrison

Medicare set-aside claims see faster resolution, thanks to new review firm

November 4, 2012

Business Insurance Solution Arc: Medicare

Ever since Provider Resources Inc. of Erie, Pa. began reviewing Medicare set-aside agreements in July, claims have been resolved faster.


Experts in Medicare Secondary Payer compliance say it has become easier for insurers and employers to settle some workers compensation claims since the Centers for Medicare and Medicaid Services began using a new contractor to review Medicare set-asides.

However, variations in projected medical costs could mean that employers pay higher-than-projected settlements for Medicare-related workers compensation claims, even though the cases are closing faster.

“The decreased turnaround time solves one problem. It does not solve the problem of the high MSA amounts that CMS has been coming back with on the past two to three years,” said Daniel Anders, compliance director for Medicare compliance firm MedAllocators Inc. in Lawrenceville Ga.

Medicare set-asides are funds used in workers comp settlements to pay future medical costs of Medicare-eligible workers. CMS uses a contractor to conduct the approval process for set-asides, which determines how much money should be placed into the set-aside account.

Provider Resources Inc. of Erie, Pa. began reviewing Medicare set-aside agreements in July. Approvals previously were handled by Annapolis Junction, Md.-based Lifecare Management Partners L.L.C.

Sources say the review time has dropped to about 30 business days in the past several months, down from six months to a year under Lifecare Management.

Previous delays likely occurred because Lifecare Management's contract provided staff to handle only about 1,700 cases a month compared with 2,200 to 2,500 monthly set-aside submissions now handled by Provider Resources, said Kimberly Wiswell, managing director of CompProjections in Agoura Hills, Calif., the Medicare set-aside division of managed care organization CompPartners Inc.

Provider Resources appears to have more staff and a more flexible contract that allows them to tackle high submission volumes, she said.

“For the most part, I think the new contractor is doing a great job in terms of getting them back to us with a reasonable explanation of any changes,” Ms. Wiswell said.

The set-aside approval process is optional, but recommended for payers that want assurance that they've included enough money to pay for a claimant's projected future medical expenses. Insurers and employers that don't adequately cover such costs could be liable to pay a claimant's future medical bills if the settlement money runs out.

Some insurers and employers have opted to skip the approval process to avoid delays that were seen under Lifecare Management, sources say.

Lifecare could not be reached for comment.

Previous delays led some workers comp settlements to fall apart, since claimants typically are unable to receive settlement funds while waiting for approval of their Medicare set-asides, Mr. Anders said.

“A lot of times, (claimants are) relying upon these funds — not only the MSA funds, but the larger settlement that is pending the outcome of this determination by CMS — and it's had a harmful impact on them waiting that long,” Mr. Anders said.

Stalled set-aside agreements also have resulted in higher comp costs for insurers and employers in the past, said Martin Cassavoy, vice president of strategic services for North Reading, Mass.-based Crowe Paradis Services Corp., a Medicare Secondary Payer compliance company.

“Every week that goes by extra for you to settle that case, you have to pay another week's worth of indemnity benefits, and that does add up,” Mr. Cassavoy said.

With Provider Resources better able to handle the caseload, it's more likely that payers will choose to seek Medicare approval for comp settlements, said Michelle Allan, an attorney in the Medicare compliance group at law firm Burns White L.L.C. in Pittsburgh.

“The new contractor has been moving cases along very expeditiously,” she said. “As long as they continue to do so, the risks that have been inherent in the process really aren't quite as pronounced.”

Still, there have been some challenges in working with the new contractor on set-aside reviews. Mr. Anders said there have been variations in how much money the company asks payers to set aside for medications or surgeries.

Provider Resources could not be reached for comment.

MedAllocators' clients have been asked in recent submissions to set aside $45,000 for spinal fusion surgeries recommended for Medicare beneficiaries, Mr. Anders said. Set-asides approved by Lifecare typically were $18,500.

The variation is “frustrating our ability to reasonably project what CMS will approve” for set-aside accounts, Mr. Anders said. However, he noted that Provider Resources has been open to reviewing its set-aside determinations.

As far as delays, a problem remains for cases submitted last year. Ms. Wiswell estimates that CMS had a backlog of 8,000 to 10,000 review requests in June.

In a September memo, CMS said that Provider Resources is working to reduce the backlog. “We are confident that submitters, Medicare beneficiaries and other program stakeholders will soon begin to see an increase in CMS' communications regarding WCMSA proposals dated prior to July 2, 2012, and after,” it said.

Ms. Allan said Burns White has several hundred set-aside submissions in that backlog, from November 2011. About 50 of the old cases have received reviews from Provider Resources, she said.

While it has been beneficial to have such cases move forward, Ms. Allan said it also presents challenges when Provider Resources needs additional information before approving a set-aside.

“People might need to expect to have to dig up additional information, even on cases that have been sitting over there a year or longer,” Ms. Allan said.

She also said that prices for a claimant's prescription drugs could change significantly if their set-aside agreements wait several months or a year for approval. That could result in CMS asking insurers and employers to pay higher prescription costs once backlogged set-aside agreements receive approval.

Despite the challenges, Medicare experts say they're optimistic that Provider Resources will be able to keep up the current pace of set-aside approvals and keep comp settlements on track.

“I think that they're probably going to be able to handle it on an extended basis,” Ms. Wiswell said.

 



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