Rough 1st quarter – – WCRC scorecard on Rx pricing in MSA allocations

Medicare Set-Aside Blog on September 29, 2009
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It has now been over three months since the Center for Medicare and Medicaid Services (CMS) issued its guidance to the Medicare set aside (MSA) industry with regard to their protocols for pricing prescription medications in MSA allocations.  We have completed an internal review of a sampling of approval letters received from CMS since July 1, 2009, and have noted some interesting trends.


It would seem that the Workers’ Compensation Review Center (WCRC), the contractor CMS has entrusted with the responsibility of correctly pricing these medications, may not be routinely following the guidelines posted in CMS’ own procedural memorandum dated June 3, 2009.   We are seeing a repeat of the plays in the old WCRC playbook that, in essence, move the ball of MSA pricing out of bounds, causing confusion and frustration throughout the field of play. 


It has been rumored recently throughout the industry that WCRC would not accept Average Wholesale Pricing (AWP) pricing based on “repackaged” drug costs. In the sample of cases we reviewed, we did find that to be true.   As such, the WCRC has apparently taken upon itself, as it has done in the past, the task of further defining CMS’ protocols absent written guidance from CMS itself.


On the other hand, in the sampling of cases we analyzed, we found that WCRC did not adhere to published guidelines pursuant to the June 3, 2009, memorandum. Specifically, they did NOT use the lowest non-repackaged pricing available on Redbook where CMS’ published protocol states that the lowest available pricing should be utilized.   Further, CMS specifically states in their guidance “do not round above four (4) decimal places” when calculating AWP unit costs  yet, in the cases we examined, we noted that WCRC actually rounded up to two (2) decimal places.


The WCRC is 0 for 3 on the issues of repackaged drug costs, using the lowest AWP price available, and even rounding in final calculations of Rx pricing.    We recommend close examination of the cases on which you currently have activity with WCRC and that communication with them be made promptly regarding any deviations from the protocols that are observed.   Here’s hoping they rally in the next quarter and start moving the ball in the right direction! 


In the meantime, if you have any questions regarding pricing for prescription medications in MSA allocations, please contact us at



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