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Medicare Set Aside Enforcement Caused Claim Counts To Spiral


Medicare Set Aside Enforcement Caused a Backlog?

Did the Medicare Set Aside Enforcement by CMS cause the claims count to spiral?   The Medicare Set Asides (MSA’s) for Workers Comp article that I posted last week is here. I wanted to continue that article.

Clipart of Medicare Set Aside Color Blue Book and Health Icon

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 MSAs (also called WCMSAs) 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 period.” I thought I would try to come up with a few questions that may generate an answer more quickly.

Could 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 California’s Workers Comp statistical reporting, not NCCI.

Vector of Medicare Set Aside Stethoscope and dollar icon

Would the changes to the Medicare fee schedule have been the source for the change in percentages? 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 would become 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 claim 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 a risk/return trade-off that the medicals may end up costing more $$ on an open-ended medical claim.

I have seen risk managers who 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 that risk managers sometimes bought a much larger claim down the road.

Graphic Of Dollars And Stethoscope on Calculator Medicare Set Aside Enforcement
(c) 123rf.com

Is the medical benefits 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. 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.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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