Medicare Set-Asides – the real problem

As CMS seeks to ensure taxpayers don’t pay for care due to comp, liability, or other causes, Medicare Set-Asides will become more common. And as we’ve seen recently, one of – if not the – biggest cost areas is pharmaceuticals.
NCCI’s studies show that the older claims are, the greater percentage of spend is for drugs, which can account for as much as forty percent of spend in older claims. That, and the recent news that CMS is revising its position re some issues related to projecting future drug costs, have brought much-needed attention to this issue.
My read on the drug-cost-projection issue is simple: to a large extent, the problem is self-inflicted by the work comp industry. With some notable exceptions, most payers have simply not done enough to manage the long term drug therapies of their long term claimants. Understanding that in some states this can be problematic; that many claimants have legal representation; that evidence-based guidelines and research on the science of pain is not as robust as we’d wish; and that patients drive much of the decision making and big pharma has huge dollars to influence physicians and consumers, there’s still much that can be done.
Here, in no particular order, are a few strategies worth considering.
1. Partner with a PBM that has a strong clinical orientation coupled with data mining expertise.
2. Motivate adjusters and case managers to identify potentially problematic drug usage and give them the tools and clinical back-up to do something to forestall issues.
3. Put in place early warning processes and flags to identify claims that appear to be heading towards questionable drug use or use of medications with uncertain benefits for the comp injury.
4. Assess the various evidence-based clinical guidelines and determine if they can help your claims staff.
5. Identify physicians with appropriate and potentially inappropriate prescribing patterns, assess those patterns, and determine how best to use that information to direct claimants and ‘mange’ physicians.
6. Encourage treating physicians to use opioid contracts and drug testing in their normal course of practice.
Most importantly, be proactive. Don’t whine, complain, and blame the system, pharma, bad docs. They all may be contributors, but blaming them doesn’t solve the payer’s problem – action does.
What does this mean for you?
Addressing drug usage early and intelligently can dramatically reduce MSA settlement costs. Oh, and it can certainly help cut indemnity and reduce disability duration as well.