Medicare Set Aside Enforcement Caused a Backlog?
Did the Medicare Set Aside Enforcement by CMS cause claims count to spiral? The Medicare Set Asides (MSA’s) for Workers Comp article that I posted on last week is here. I wanted to continue that article.
After a few intense calculations, I was able to make a few comparisons on pre-and-post WCMSA’s. It may be good to read the article in the above link before reading this one. The basic premise is that I wanted to examine whether or not MSA’s (also called WCMSA’s) have caused a delay or complete obliteration of Workers Comp file settlements and closings.
As I stated in the previous article – “Claims decreased by 16.2% cumulatively however the medical benefits per claim increased by 21.7% over the same time period.” I thought I would try to come up with a few questions that may generate an answer more quickly.
Could have California’s spiraling medical costs have been partially responsible? The NCCI was the source of the numbers I calculated for my percentages. The WCIRB is responsible for the California’s Workers Comp statistical reporting, not NCCI.
Would the changes to the Medicare fee schedule have been the source for the change in percentages? Actually, the Medicare fee schedule was decreased by 20%. Even though many states base their fee schedules on Medicare, this may further prove my point. If Medicare was reduced by 20%, the 21.7% increase in Workers Comp medical benefits becomes an even more astounding figure.
Would the length of time that a claim’s medical benefits stay open be important? I think we may be on to something there. If a claims adjusting staff has to fund a Set Aside, then why not just leave the file open indefinitely and pay medical benefits as needed. There is risk/return trade-off that the medicals may end up costing more $$ on an open ended medical claim.
I have seen risk managers that would not ever settle a claim and just leave the medical benefits open on every claim. In the short term, the statistics back these risk managers. The long-term statistics indicated the risk managers sometimes bought a much larger claim down the road.
Is the medical benefit increase due to long delays such as convincing a claimant to settle, having a study made of the numbers, including those numbers in a settlement, and then waiting for CMS approval? I do think this is partially responsible for the increase in medical benefits. Basically, a new layer of governmental involvement beyond the state’s administrating over the claim has been added to the mix.
As we all know, the statistics for Workers Compensation and other insurance is a delayed cycle. I think we will need to compile approximately 10 to 15 years of data to see if my assumptions on Medicare Set Aside enforcement hold true. For now, having a great MSA provider may be the key to cutting the medical outlays.
©J&L Risk Management Inc Copyright Notice