Barry Lipton, the Practice Leader and Senior Actuary at the National Council on Compensation Insurance (NCCI) presented a research report on Medicare Set-Asides (MSAs) at NCCI’s recent 2014 Annual Issues Symposium in Orlando. Some of the key findings were:
- In Fiscal Year 2011, CMS approved $1.1 billion of workers’ compensation MSAs
- MSAs make up about 40% of the total proposed settlement
- Half of the MSA is due to prescription drugs
- The gap between submitted and approved MSA amount has been shrinking over the years
- The differences between proposed and approved MSA settlements are largely due to prescription drugs
- 94% percent of MSAs submitted are for claimants currently eligible for Medicare
- Half of MSAs reviewed by CMS involve musculoskeletal impairments
- 56% of MSA settlements are paid as a lump sum, and only 44% are annuitized
- CMS’s MSA processing time was 41 days on average in Q4 of 2013
- The median MSA approved amounts were about $45,000 in 2013
It’s good to see that some solid research is being done on Medicare Set-Asides. It’s encouraging to see that approval times are shrinking and that the gap between submitted and approved amounts are decreasing. $1.1 billion is an impressive amount of approved MSAs dollar in one year. The MSA industry and CMS have come a long way in recent years to improve the submission and review process.
The next step really needs to be to find out how much of this $1.1 billion dollars annually is being spent correctly on Medicare allowable, injury related expenses by the 95% of the MSAs that are self-administered by the injured claimant.