2012 Predictions

Medicare Set-Aside Blog on January 16, 2012 | Posted by


Now that Jen is done Monday morning quarterbacking 2011, it is time to ply my idiot savant like clairvoyance to events that will surely come to pass in 2012. (Nonbelievers, see my 100% accurate 2011 precognition on permanent display here). While it may seem my prognostications are a few days late, keep in mind I work off the Mayan calendar.


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#10 Liability MSAs – Maybe the doubters are right


LMSAs were a non-starter this year with very little overt compliance from Payers despite “the first LMSA memo” issued by CMS. I expect more of the same in 2012 for a one simple reason: despite the compelling arguments for or against LMSAs, the easiest thing to do is nothing. Expect those Payers that do acknowledge an obligation to Medicare to continue placing the burden for compliance on the plaintiffs and their attorneys.


Note to all those espousing the no-LMSA position, you haven’t won the battle by a long shot. But you have succeeded in convincing the P&C industry to kick the can down the road for another year. And I grudgingly respect the position absent any attempt by CMS at enforcement. We will revisit this again in 2013.


 


#9 Another MSA leader will hit the unemployment line


While I recognize you will be the scapegoat for the sins of prior leadership, someone has to take the blame. You have already purged your organizations of a number of underlings as a stopgap measure to divert the attention of your investors. But this year, the buck stops with you. Lose one more account or fail to meet growth expectations and there will be no one left to take the fall.  You know who you are.


 


#8 The blockbuster case that will eventually bring CMS to its knees is upon us.


Although I am sworn to secrecy, there is a lawsuit brewing that will finally expose the WCMSA program for what it is, an enormous abuse of agency discretion that cannot withstand judicial scrutiny. Like a summer action movie starring Will Smith, this case has it all.


 


#7 There will be no legislative fix to the MSP


Contrary to what some may believe, I do support MARC in their quest for a legislative fix to the MSP and I recognize these things take time. It is hard to compete for legislative attention with high unemployment, huge budget deficits and the zealous desire of some to repeal Obamacare taking precedence. Congress doesn’t have an 11% approval rating for nothing.


Even though their multitude of House and Senate bills amount to little more than a band-aid being applied to a gushing femoral artery, anything is better than nothing. I also support the Baltimore Orioles winning the World Series. Both have an equal chance of success in 2012.


 


#6 More Payers will abandon the CMS approval process


I see a growing awareness that the supposed assurance of CMS approval is not worth the cost to obtain. With a multitude of new products and solutions hitting the market in 2012, Payers have viable options for protecting Medicare without seeking the blessing of CMS. After dropping north of a billion dollars funding MSAs in 2011, the industry is finally realizing that they can’t continue to operate on the old paradigm of 125% loss ratios nor can they raise premiums in a soft market to make up the shortfall.


 


#5 The conditional payment process will get better but still will not be good enough


I can’t see how the process can get much worse than what we saw in 2011. Thankfully, CMS has jettisoned the Chickasaw Nation and put certain CP efficiencies into place for diminimus claims. Turnaround times should continue to improve and positive outcomes will become the norm. Anyone still paying a percentage of savings to their vendor needs to rethink their CP strategy.


Expect Mandatory Insurer Reporting to streamline the discovery and repayment process. But also expect claimants to continue to be denied treatment for unrelated conditions erroneously lumped with their WC injuries.


 


#4 Mandatory Insurer Reporting (MIR) will not generate a single dollar of penalties in 2012. (for those that make a good faith effort to comply)


Another of the great marketing scams of 2011 and years prior was tying MIR reporting to MSA services.  MSA execs dreamed of exploding revenues now that their salespeople were armed with a list of all open claims involving Medicare beneficiaries. It would be like shooting fish in a barrel. Unfortunately for them (see #9), these revenues have failed to materialize.


Problem is that the heavy lifting of gathering the claims data fell on the Payers and, once that was obtained, submitting the EDI data to CMS was a simple process by comparison. All the gloom and doom preached by those that stood to make a buck just hasn’t occurred. No $1,000 per day penalties, no draconian CMS audits, nothing. Imagine that.


 


#3 The volume of WCMSAs will continue to decline industry wide in 2012


Why? Because Payers are smarter and are not over utilizing MSAs as in years past. They have moved past the fear, have become better educated, and have largely banned the cookie and donut field rep model from their claims operations. Most forward thinking organizations have put a single person in charge of MSP compliance and these people have put a stop to past sales abuses. They also tend to know far more about their true exposures than the people selling the product. The MSP business is now a zero sum game in WC. One company’s gain is another lesser company’s loss.


This will drive more firms from the business and leave only the most capable left to compete for any substantial accounts. New business will be won by service and capability. Expect Dunkin Donuts to post a decline in year over year sales.


 


#2 Your MSP provider is now your claims solution provider


Expect the traditional MSA companies to try to capture revenue from other product lines. Whether it is through structured settlements, a PBM partnership with a whiz bang DUR product, or a post settlement administration alliance, the big boys are not going to sail quietly off into the night. Expect the same from structured settlement companies trying to do MSAs or PBMs trying to capture the spend on post settlement administration cases. I don’t necessarily think that is a bad thing at all, provided these companies have the capability and expertise to execute. But I see little value in strategic partnerships that exist to share revenue. That just drives up the cost and drives down the quality for the end user.


As for me, I am going to continue to do all of those things in-house just like we have been doing for nearly a decade. I look forward to the competition as others try to catch up.


 


#1 The world is going to end


I think that the debate is finally settled that December 2012 is all she wrote for the human species. Nostradamus, the Mayans and Harold Camping all agree that the day of reckoning is upon us. So I suggest you buy as many guns as your state will allow, stockpile food and ammunition and head for high ground. Be sure to bring along a copy of The Complete Guide to Medicare Secondary Payer Compliance for those quiet nights around the campfire. It chronicles the folly of government inefficiency, bureaucratic ineptitude, judicial procrastination, legislative sluggishness and the confiscation of private wealth like no other tome in existence.


 


Ryan