Impact of Medications on Medicare Set Asides

Saturday, April 22, 2006 | 0

Pre-1/1/06 WCMSA and Post-1/1/06 WCMSA and the Impact of Medications

As most of you know, effective 1/1/06 all workers'compensation Medicare set asides submitted to CMS for review and approval must contain a prescription drug component. The CMS Policy Memo outlining compliance is found in the Resources area of our web site at www.gouldandlamb.com.

Since the release of the 12/30/05 Policy Memo, numerous common questions have come to our attention. The two questions below are important ones we hear often.

Can the claimant use a pre-1/1/06 WCMSA that only provided for Part A & Part B care to pay for prescription drugs?

No. A WCMSA approved by CMS that contains only funding for future Part A and Part B should only be used to pay for Part A & Part B services. No portion of the WCMSA account should be used to pay for Part D medications, monthly premiums, deductibles, or to fill in gaps in Part D coverage. It is important to note that while the claimant is prohibited from using the WCMSA funds to cover Part D costs, there is no prohibition from enrolling in the Medicare Part D program and obtaining medications needed to treat the claimants medical conditions.

Can I reduce my Part D liability in the WCMSA by offsetting medications costs according to Medicare reimbursement rates for Part D which include monthly premiums, a $250 deductible and 75% reimbursement to $2250/yr, 0% reimbursement from $2250/yr to $5100/yr, and 95% coverage after $5100/year?

No. This is not recommended. While CMS has not published a policy on how to calculate prescription drug costs, this concept has been rejected on numerous occasions as a method that will be accepted post-1/1/07 when CMS begins to review the sufficiency of the Part D component. CMS' position is that it would be inappropriate to credit the entire monthly premium, deductible, and coverage gaps to the benefit of a primary payer in a WCMSA when a claimant may be using the Part D benefit for non-occupationally related medications as well. It is anticipated that Average Wholesale Price (AWP), Fee Schedule (when applicable), and/or actual costs will be the basis for CMS pricing of WCMSAs in the future. This is consistent with CMS policy on Part A and Part B benefits currently priced at WC Fee Schedule, U&C, or actual costs, not Medicare Fee Schedule.

If you have any questions concerning the information contained in this bulletin or would like source and/or reference material please contact us at news@gouldandlamb.com or call 866-672-3453 ext.1343.

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