It has been one year since Capitol Bridge began its new role as the Workers’ Compensation Review Contractor (WCRC), responsible for the review and approval of Medicare Set Asides (MSAs), after receiving a record-breaking $60M Federal contract. This contractor was selected, replacing Provider Resources, Inc., to recover future medical costs from primary payers, involving Medicare beneficiaries, or individuals with a reasonable expectation of receiving Medicare benefits within 30 months.
As a data analytics company, Care Bridge International has quantified and compared its performance against prior WCRC review practices. This one-of-a-kind analysis of the effectiveness and accuracy of the current WCRC is also compared with 16 million unique injury claims demonstrating actual treatment and costs to explain what this voluntary process really costs you, the primary payer.
The foundation for the WCRC Review Process is flawed and is not based in science. As we have discussed in previous blogs there is no empirical evidence that the existing MSA methodology used today to calculate future care is accurate. In fact, we have conducted research that proves the methodology is grossly inaccurate. Further, the Centers for Medicare and Medicaid (CMS) operating rules for calculating prescription drugs over the life expectancy is not supported by Medicare’s own prescription drug utilization guidelines or data analysis of prescription drug use in the Medicare population. In simple terms, the WCRC operating rules are out of sync with the facts, void of any legitimate basis.
As the former CEO of the largest MSA company at the time, I had the privilege of initiating an effort with the National Council on Compensation Insurance (NCCI) to bring an analysis of the financial impact of MSAs on claims to the actuarial and underwriting community in 2014. The results, based upon 2500 MSAs, offered statistically relevant insights that revealed between September 2009 and November 2013, MSAs represented 40% of the proposed settlement costs and prescription drugs nearly half of the MSA total. The average approved MSA amount, during that time period, was $85,984.44 and the difference between the submitted MSA amount and the CMS approved MSA amount was primarily due to prescription drugs.
In 2018, NCCI released an updated study incorporating results from years 2014 and 2015 which showed the average MSA amount increased 21% to $109,263.50 and the difference or gap between the CMS approved MSA amount and original proposed MSA increased 14%, with prescription drug costs being a significant percentage proportionate to the total MSA amount. The larger the MSA, the larger the percentage of prescription drug costs. MSAs remain 40% or more of the total settlement amount. Across all years from 2009 through 2015, half of all MSAs involved individuals between the ages of 50 to 70 years.
Comparing our 2016 and 2017 data to the most recent NCCI MSA studies, we found mostly the same consistency in results compared to prior years. However, compared to the CMS WCRC results of the new contractor for 2018, our company has witnessed a 16% increase in CMS demand for funding prescription drugs in MSAs. These findings explain that the new WCRC Contractor is demanding even more funding for prescription drugs in MSAs than in years past.
As detailed in our 2018 Medicare Set Asides: What is the True Cost of Future Medical Care, CMS grossly overestimates future medical exposure for prescription drugs in MSAs as compared to actual prescription drug use, post settlement. The cost to payers is nearly 70% higher than actual costs paid for prescription drugs, post settlement. Our data shows that prescription drug use tapers dramatically within the first 7 years after the date of injury.
As Care Bridge International disrupts the industry setting a new standard to forecast MSAs using artificial intelligence, we encourage pairing our valid MSAs with post-settlement account administration as an alternative to CMS Submission of MSAs using traditional methods. We are encouraged to learn from Fidelity Fiduciary Company, LLC that CMS accepts all annual attestations provided on non-submit MSAs, signaling an acceptance of this alternative to CMS submission, as adequate protection of Medicare’s future interests under the Medicare Secondary Payer Act.
The egregious review practices of the WCRC serve to reinforce the need for a more accurate process and methodology to forecast MSAs which protects primary payers from significant over payments, while adequately protecting the Medicare Trust Fund and Medicare beneficiaries, affording the opportunity to settle claims involving MSAs.
For more information contact:
Michael Riccio, Customer Experience Manager
Care Bridge International
Toll Free: 888-434-9326 Ext. 103