Adventures in Allocating

At the 2016 NAMSAP Annual Conference, a panel discussed pricing methodologies for Medicare Set Asides. The panel was

• Beth Hostetler – Safeway Albertson’s
• Christine Melancon – EZ-MSA Services
• Jake Reason – EK Health Services

CMS looks for trends in the treatment in making allocating recommendations. Many regions want to see 4 doctors visits on the topic. On durable medical equipment, CMS wants to see the actual bills to know the charges and they need documentation on the frequency of replacement. There is much debate over how they project future pharmacy costs and many argue they project things going forward at higher rates than usual. A slight mention of potential future treatment in the notes can result in a recommendation from CMS for that treatment over the claimant’s lifetime.

If you can get the physician to provide a letter explaining specifically how they will be weaning someone off medications they have been taking then CMS will consider that. However if all they say is “will be weaned” that is not sufficient. To show a decrease in the medication CMS needs to see at least 3 months of documentation in the payment histories. But there is inconsistency where some CMS offices want to see 6-9 months of documentation.

CMS takes a very “cookie-cutter” approach with their reviews so if you are going to submit your Medicare Set Aside for approval you have to be prepared with this. You need to create an extensive documentation trail to support your recommendation for the allocation and be prepared to defend your allocation.

Safeway adopted a non-submission program in California because of delays in CMS approval, increasing development levels, CMS inclusions that are not consistent with evidence based medicine, and CMS using AWP to price medications which is much higher than what is paid retail. They make sure they are considering Medicare’s interest in every settlement of future medical and they do this by conducting an analysis of future medical needs based on the medical records and evidenced based treatment guidelines. The goal is to provide a fair and realistic recommendation for future medical funding.

They also offer and pay for professional administration for all MSAs and insist on the claimant signing off on a declination document if they refuse this professional administration. The costs of these services are very reasonable and it ensures that the funds in the set-aside are used exclusively for appropriate medical treatment instead of getting spent on other things.

When it comes to determining the allocation amount they focus not just on past frequency but on the evidence based medicine guidelines when it comes to future care. They consider differences in costs in different geographic areas. The focus on allocating for treatment likely to occur, not any treatment that is possible.

Safeway also prices the prescription drugs in the allocation at the levels they receive from the Albertson’s PBM. They make sure the claimant will continue to have access to this PBM after settlement of the claim. Also, they are taking into consideration the recent recommendations from the CDC when it comes to recommended morphing equivalent dosages.