Does the CMS Workers Comp future pharmacy overpricing ?A trend in Workers Comp claim settlements is slowly changing the landscape of closing out files. Many insurance carriers, TPA’s, Captives, etc. are rejecting the Center for Medicare/Medicaid Service’s (CMS) valuation of prescription benefits and just leaving the files open.
We have come across this more often with our client base over the last two years. This article from Business Insurance reinforced what I had thought all along. There are two areas of concern with how CMS calculates the future RX benefit:
- CMS may not be taking into account that name brand medications will have generic alternatives in the future and price the prescriptions with name brand medications
- CMS may not take into account the finite period for prescriptions medications thus projecting all prescription as lifetime.
The other concern is with the comment from CMS at a recent congressional hearing that there was a savings incurred of $50 billion over the last ten years. That comment, to me, is highly inaccurate.
The CMS has actually just shifted costs from the government back to the employers which in turn will cause the employers to cost shift the money for Workers Comp insurance premiums or budgets for self insureds. This will cause a lowering of the tax base which in turn will cost the government in the long term.
The CMS may just be attempting to lessen their liabilities, but at what cost? I have been often criticized for saying that the Feds want to control Workers Comp on a national basis. I will cover that next time.
Article provided by James J Moore, AIC, MBA, ChFC, ARM. All articles are original content. Check out the full website at www.cutcompcosts.com.