New CMS Rules for Prescription Drugs, Rated Ages for Medicare Set-Aside Add to Complexity for Employers, Says Allsup

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The Centers for Medicare & Medicaid Services (CMS) recently issued additional guidance affecting prescription drug coverage and “rated ages” that are important for workers’ compensation entities to apply to their current Medicare Set-Aside (MSA) practices, according to Allsup.

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Already, Allsup MSA specialists have enacted these changes with clients and continue to share information with those seeking insights about these changes.

The Centers for Medicare & Medicaid Services (CMS) recently issued additional guidance affecting prescription drug coverage and “rated ages” that are important for workers’ compensation entities to apply to their current Medicare Set-Aside (MSA) practices, according to Allsup. Based in Belleville, Ill., Allsup works with employers to coordinate their workers’ compensation benefit liability plans with Medicare.

“Each of these new procedures requires additional attention to take the proper steps to ensure compliance,” said Rob Sokol, director of commercial sales-Medicare Secondary Payer compliance at Allsup. “Already, Allsup MSA specialists have enacted these changes with clients and continue to share information with those seeking insights about these changes.”

On May 14, CMS issued a notice clarifying procedures for prescription drugs used by Medicare beneficiaries for off-label and unlabeled outpatient use affecting workers’ compensation MSAs (WCMSA). The notice also addresses new language requirements for “rated ages” to be used in WCMSAs. A complete copy of the guidance can be found online.

Medicare Part D and Prescription Drugs
Because of the notice, the following practices take effect for MSAs when the settlement occurs after June 1, 2010:

  •     Any MSAs submitted to CMS must have non-Medicare covered drugs listed separately from Medicare covered drugs. The costs for the non-covered drugs are not included in the actual MSA amount.
  •     Off-label or unlabeled outpatient-use of medications are no longer covered by Medicare, unless approved under the Federal Food, Drug, and Cosmetic Act or supported by approved compendia under the Act. (Note: This returns to a previous practice used in early 2009.)
  •     MSA funds cannot be used to pay for non-Medicare covered drugs—this statement is a reinforcement of CMS’ policy.
  •     CMS will consider re-pricing previously approved MSAs that included non-covered drugs, if the claim was not settled as of June 1, 2010.

“Companies should note that settlements completed prior to June 1, 2010, essentially are not affected by these changes,” Mr. Sokol said. “Allsup specialists already make a distinction for non-Medicare covered drugs, so the primary change for our customers is making sure that claimants understand their MSA funds can only be used for covered Medicare drugs.”

Rated Ages and New Language
CMS also issued guidance that requires new language for those MSAs that use “rated ages.” Effective immediately, the following certification statement is required in the MSA document:

“Our organization certifies that all rated ages obtained on the claimant, at any time during that individual claimant’s lifetime, have been included as part of this submission to the Centers for Medicare & Medicaid Services.”

The federal agency will not accept any variation or substitute to this statement. If this exact statement is not included, CMS will estimate the claimant’s life expectancy using the “actual age” of the claimant.

Compliance and MSAs: Make It Easier
Developments related to WCMSAs highlight the opportunity for employers to better manage their needs with a comprehensive, cost-effective and measurable solution.

Through its Medicare Set-Aside services, Allsup can help ensure clients:

  •     Meet CMS compliance requirements through effective monitoring and action.
  •     Minimize their exposure by systematically protecting Medicare’s interests for all appropriate claims.
  •     Avoid paying needless fees for claims that do not meet CMS guidelines.
  •     Better manage their MSA program with comprehensive tracking and reporting tools.
  •     Reduce the time devoted by their staff to completing MSAs.
  •     Expedite CMS approval by submitting MSAs to CMS in an electronic format.

For more information about Allsup’s MSA services, call (866) 477-7005 or e-mail WCServices(at)allsupinc(dot)com.

ABOUT ALLSUP
Allsup is a nationwide provider of Social Security disability, Medicare and Medicare Secondary Payer compliance services for individuals, employers and insurance carriers. Founded in 1984, Allsup employs nearly 700 professionals who deliver specialized services supporting people with disabilities and seniors so they may lead lives that are financially secure and as healthy as possible. The company is based in Belleville, Ill., near St. Louis.

The company has helped hundreds of self-insured employers, state and municipal governments, disability and workers’ compensation plans with Social Security and Medicare. This includes Medicare Set-Aside services to protect Medicare’s interests in workers’ compensation and third party liability settlements; overpayment reimbursement services for participants with disabilities; and reverse offset services to identify workers’ compensation claims in states with SSDI-offset potential. For more information, visit http://www.AllsupInc.com.

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Rebecca Ray
Allsup
800-854-1418 ext. 5065
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Dan Allsup
Allsup
800-854-1415 ext. 5760
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