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Medicare settlements feature lifetime opioid guarantees

Medicare settlements feature lifetime opioid guarantees

Researchers in California were the first to find that most Medicare set-aside settlements in the state include money for opioids, but experts say the problem is a national issue, taking injured workers on opioids out of the comp system and onto a lifetime guarantee of paid opioids.

“I start to think we are making progress and we are getting somewhere and opioid use in comp is down, and then you come across something like this,” said Alex Swedlow, president of the Oakland-based California Workers’ Compensation Institute, which conducted a study that found 70% of federally mandated and approved California workers compensation Medicare set-aside settlements for injured workers include money earmarked for decades of opioid use.

“We have no reason to believe this problem is any different in any other state,” said co-researcher David Deitz, a physician and managed care consultant who runs his own consulting firm David Deitz & Associates L.L.C. based in Westport, Massachusetts.

Medicare set-asides are insurer-paid plans in which claims administrators allocate funds from workers comp settlements to cover future medical expenses arising from a work injury that might otherwise be paid by the federal Medicare program.

“It’s a confirmation of what we believe has existed,” said Rita Wilson, CEO and co-founder of Delray Beach, Florida-based Tower MSA Partners L.L.C., which helps insurers and employers remain Medicare-compliant and began tackling the opioids in Medicare set-asides in mid-2015. “(It) quantifies the concern of too much opioids in the Medicare set-asides,” she said of the study that was released in the fall.

The problem, as some see it, is that the federal program allows comp claims to close with cash set aside to pay for future drugs — often strong doses — with little oversight. This is unlike the typical workers comp scenario, where injured workers can rely on nurse case managers, pharmacy benefits managers, insurers, self-insured employers and others to guide the injured workers off the dangerous doses — a trend in comp spurred by regulations and treatment guidelines that now say chronic pain is not relieved by powerful pain medications.

Medicare set-asides, and the prescriptions they guarantee, are the responsibility of the injured workers and their treating physicians, said Michael Merlino, a Buffalo, New York-based attorney and senior vice president for Medicare compliance for Sedgwick Claims Management Services Inc.

In a statement provided to Business Insurance, the U.S. Centers for Medicare and Medicaid Services officials say the money it approves for the set-aside is part of a formula. “To determine the recommended amount of funds to be set aside, medical and pharmaceutical records for the last two years of treatment of the work injury are used and the associated costs are extrapolated over the life expectancy of a beneficiary.”

Unsatisfied, some are calling for additional oversight.

“CMS is approving (Medicare set-asides) with decades of opioid use … I think that has people concerned,” said Mr. Merlino.




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