The National Council on Compensation Insurance (NCCI), the nation’s most experienced provider of workers’ compensation information, has released its much-anticipated report on Medicare Set-Asides and Workers’ Compensation. In one of the most comprehensive research projects on this topic to date, NCCI examined 2,200 WCMSAs submitted by Gould and Lamb to CMS between September 2009 and November 2013.
Some of the key findings are as follows:
- After a period of dramatic lengthening, CMS’s processing time for MSAs has recently declined.
- The ratio of CMS-approved MSA amounts to submitted MSA amounts has declined over time.
- The differences between proposed and approved MSA settlements have been largely due to prescription drug costs.
- Most MSAs are for claimants who are Medicare-eligible at the time of settlement. Most of these claimants are Medicare-eligible because they have been on Social Security Disability for at least two years.
- MSAs make up about 40% of total proposed settlements. Of this 40%, prescription drugs make up half of proposed MSA cost.
- CMS approved $1.8 billion of WCMSAs in FY 2013.
- Of the WCMSAs reviewed in the study:
- 71% were for claimants between 50-70 years old
- 59% were for settlements greater than $100,000
- 45% had MSA amounts of less than $25,000
- 54% involved musculoskeletal impairments
- 56% were paid as a lump sum
- From Q2 2010 through Q2 2012, a little less than half of the MSAs submitted to CMS were approved as submitted.
- In Dec 2012, there was a large one-time spike where 92% of the MSAs submitted were approved as submitted.
In May of 2014, these findings were presented by Mr. Barry Lipton, Practice Leader and Senior Actuary, NCCI Holdings, at the NCCI Annual Issues Symposium in Orlando, FL. We appreciate this important analysis by NCCI on WCMSAs submitted to CMS, and thank them for their efforts.