CMS memo clarifies prescription drug requirements for Medicare set-asides

The Centers for Medicare & Medicaid Services recently issued guidance to clarify prescription drug requirements pertaining to workers' compensation Medicare set-asides.

The memorandum clarified the exclusion of non-Medicare Part D covered prescription drugs from Medicare set-aside calculations. According to the CMS, for a Part D drug to be covered by Medicare, and thus included properly in a workers' comp Medicare set-aside, the drug "should be prescribed for an outpatient use that is approved under the Federal Food, Drug, and Cosmetic Act."

Kent Takemoto, president of PMSI Settlement Solutions, a division of PMSI, applauded move.

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"We have valued the opportunity to meet with CMS numerous times over the past year and look forward to continuing our active dialogue with CMS on further refinement of the Medicare set-aside drug review process and other issues impacting Medicare set-aside allocations," he said.

Takemoto said pain management medications are a very significant cost driver in workers' comp.

"Many of the medications commonly utilized for the treatment of chronic pain are not covered by Part D," he said. "In recent PMSI analysis, the exclusion of non-Part D covered drugs affected about 65 percent of the most commonly used drugs in workers' compensation."

In anticipation of CMS' policy memorandum, Takemoto said PMSI developed a methodology for prescription drug calculations based on its experience in providing pharmacy benefit management services to the workers' comp industry. The methodology incorporates the company's knowledge of occupational diagnoses, the treatment of pain management and the selection of replacement drugs for non-Part D covered prescriptions. In use for over nine months, Takemoto said this methodology reduced a Medicare set-aside by $935,000 in one recent client case.

Read more at the WorkersComp Forum homepage.

July 15, 2010

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