Trends affecting workers’ compensation Medicare Set-Aside allocations

by | May 15, 2019

October 28, 2018 
by Donna Mize, MSCC

Capitol Bridge, LLC, the newest Workers’ Compensation Review Contractor (WCRC) for the Centers for Medicare and Medicaid Services (CMS), officially took over on March 19, 2018. Since that time, the Medicare Set-Aside (MSA) industry has noticed aggressive changes in the Workers’ Compensation Medicare Set-Aside (WCMSA) review process, resulting in an increase in WCMSA allocations.

At Optum, it is our practice to monitor CMS determinations to identify changes in the WCMSA voluntary review process and provide an update to our clients. This effort helps avoid counter-high discrepancies that occur when the WCRC makes a change to the methodology used to review WCMSAs.

The following is a summary of changes affecting WCMSA’s.

Urine Drug Screens increase in frequency
Starting in July of 2018, the WCRC changed its protocol for urine drug screening (UDS) when an opiate medication is included. Up to this point, it was standard practice to allow for one UDS annually, unless the treating physician is ordering them more frequently based on risk assessment.  The WCRC is now allocating a minimum of four UDSs annually when opiate (Schedule II narcotic) medications are prescribed (Tramadol is not a Schedule II narcotic).

Optum received the following statement from the CMS regarding this change:

“When changes were made to prescribing requirements related to hydrocodone products back in 2015, UDS requirements were set to match prescribing needs. Now that prescribers may only write single monthly prescriptions without refills and up to no more than three prescriptions between visits, UDS expectations were set to each of those visits unless the prescriber was ordering them more frequently.” 

According to The Official Disability Guidelines (ODG), the frequency of urine drug testing should be based on documented evidence of risk stratification, including use of a testing instrument. Allocating for four UDSs per year for all claimants using Schedule II opioid analgesics does not appear to be consistent with the current clinical guidelines, which promote performing an individual risk assessment for each patient. Due to the heightened awareness of the risks associated with opiate analgesics, it is felt that the WCRC is taking a more conservative approach in order to assure proper safety. However, each case is different and guidelines support the treating physician making an assessment that is specific to each patient.

The increased frequency in drug testing is causing an increase in WCMSAs. Additionally, the pricing for the UDS tests have also increased in every state. CMS explained their rationale for the increases on several cases as follows:

  • “The claimant was prescribed opiate medications. Therefore, frequency of urine drug screens was increased from once per year to four times per year” (Resulted in an $8,824.00 counter high).
  • “The frequency of the urine drug screen testing is higher than the proposed frequency and the medical pricing of this test is higher than the proposed pricing” (Resulted in an $8,609.00 counter high).
  • “Additional medical services are indicated including increased frequency of urine drug screens for monitoring of opioid medications” (Resulted in a $7,896.00 counter high).
  • “Additional medical services are indicated, increased frequency of urine drug screens based on the opiate prescribed” (Resulted in a $14,562.00 counter high).

Lyrica® now routinely included in WCMSAs

Please click here to read our in-depth blog regarding the WCRC including Lyrica in WCMSAs.

Liberal interpretations of surgical recommendations
Recently, the WCRC included a future surgery where the physician stated, “With regard to the potential need for future treatment if he (the claimant) does develop arthritis of the subtalar joint and has persistent pain which cannot be controlled through other methods he may require a subtalar joint arthrodesis.”

This statement is not a conclusive recommendation for future surgery. First, surgery is needed only if the claimant develops arthritis and, secondarily, if the associated pain is not controllable through other measures. This statement was certainly not indicative of a firm recommendation from the physician that this treatment would be medically necessary in the future. Several things need to occur in order for surgery to be needed in the opinion of the physician.

The Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide Version 2.8 indicates:

“If the item is recommended in the medical record and is covered by Medicare, it will be included in the WCMSA, regardless of whether it follows medical association guidelines. The WCRC makes every effort not to include services that are not recommended in the medical records unless the service is always part of the treatment. The WCRC reviews proposals on a case-by-case basis. They consider the treatment and usage patterns, the recommendation of the treating providers, life expectancy, functional status, responses to treatment and effectiveness of therapies as established in the records. The WCRC references evidence-based guidelines as resources in determining future treatment.”

The CMS determination letter indicated:

“On 3/28/2018, it is noted that claimant might require the use of an orthotic and if claimant developed arthritis of the subtalar joint with persistent pain that could not be controlled through other methods, a subtalar joint arthrodesis might be needed. Future treatment will include: physician visits, diagnostic studies, physical therapy, ankle surgery and orthotic/cane.”

Optum resubmitted this case requesting all treatment added by the WCRC in relation to the ankle surgery be removed. The WCRC declined the request and stated that the “after review of the existing records, on 10/25/2017, x-rays completed revealed reduced joint space with some broadening of the calcaneus. This is indicative of subtalar joint arthritis.” 

There was no indication in the medical records that there was a diagnosis of arthritis. The statement from the treating physician alone confirmed this, since the physician indicated that the surgery is needed only “if” the claimant develops arthritis. Additionally, it is difficult to predict whether the claimant would have pain not controllable by other more conservative methods. We do not agree with this determination by the WCRC and feel that there is no current evidence to support its inclusion.

Increased turnaround times
The previous WCRC had a turnaround time of approximately nine days. The current WCRC is averaging 25 days for review of a WCMSA. We are hopeful that over time, the turnaround times will decrease and be more in line with the previous contractor.

As always, we will continue to update the property and casualty insurance industry with news, trends or additional updates from CMS and the WCRC.


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