March 08, 2010 – MHAYES Surrenders

Medicare Set-Aside Blog on March 9, 2010
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MHayes the field case management, telephonic case management, catastrophic case management, utilization management, life care planning, litigation support services, Spanish language services, interpretation and translation services, critical incident and stress debriefing company (that’s a mouthful) is no longer MHayes the Medicare Set-Aside company.


Citing the growing “complexity and unpredictability” of the MSA practice, management has decided to focus on their core business(es) above. I admire their decision. It isn’t easy admitting you made a wrong turn and taking the painful steps to get back on track.


I must admit that I am a bit surprised. It was just 45 days ago where they were declaring victory over CMS with respect to accepting off-label drug utilization arguments in MSAs. Their email/press release gushed about how they saved their clients $141,736! (their exclamation point not mine).  Said press release has since been removed from their site and all evidence of their MSA practiced erased. Melinda “The M in MHayes” Hayes clearly deep sixed that product line and ordered the historical record expunged.


But in the interest of nostalgia, let’s take a trip down memory lane and revisit the marketing email.


M Hayes Prevails with CMS over Off-Label Drug Use


Hunt Valley, MD – January 20, 2010 – We recently obtained a reversal from CMS on a case where they had initially added three very costly prescription drugs to the MSA, despite our detailed explanation that the law and their own Manual dictated otherwise.  In short, what this win means is that certain expensive and inappropriate drugs such as Lidocaine patch, Fentora/Actiq, Lyrica and, in some instances, Neurontin and even Celebrex, can be kept out of the MSA when it can be shown that they are not being used for a “medically accepted indication” and are therefore not covered Part D drugs.  Only items covered by Medicare and related to the work injury must be in the MSA – either alone is not enough.


As many of you know, CMS took over review of the Prescription Drug Component (PDC) of MSA’s on June 1, 2009.  Prior to that, it was to some extent “anything goes” and some dubious practices were applied by a few to reduce the PDC as much as possible.  We maintained all along that when it came to “off label” (non-FDA approved) use, Federal law is clear that additional analysis is mandatory and, without that analysis, one cannot state the drug is not a covered Part D drug.  That analysis requires reference to three prescription drug reference guides (compendia).  Even before June 1, 2009, we were consulting those compendia and jumping through all the hoops required by law to assure that your MSA was solidly based and defensible in the long run, even though that approach seemed to be rare.


After June 1, 2009, we were surprised to find CMS including drugs that failed this test for Part D coverage.  Worse, CMS’ own memo of June 1, 2009 stated:


“Off-label use:  Off-label use of medications in the United States is both legal and common.  Once a drug has been approved for sale by the Food and Drug Administration (“FDA”) for one purpose, physicians are free to prescribe it for any other purpose that in their professional judgment is both safe and effective.  Physicians are not limited to prescribing a drug only for official, FDA-approved indications.”[1]


While it is true that physicians may prescribe a drug for off-label use, that does not mean it automatically becomes a covered Part D drug.  CMS may change and even ignore its own memos, but it cannot disregard Federal law.  Moreover, its own Part D Precription Drug Manual contains the correct test, although it was being ignored.  With the backing of several of our clients, we continued to remove the drugs in question and challenge CMS on this issue.  As each MSA would come back wrongfully including a non-covered drug or drugs, we filed a written Request for Reconsideration with the CMS Regional Office.  Last week we received the first of these back where CMS changed its decision and accepted our argument.  As a result Lidoderm, Celebrex and Lyrica were taken back out of the MSA reducing the original CMS approved amount by $141,436!


We have other Requests for Reconsideration on file with CMS and several other cases pending with this issue – we believe that we should prevail on all of these although due to the fact they are in several CMS regions it may take some additional persuasion.  if you would like more information about this issue or we can assist you in any other way with your MSA needs, please do not hesitate to contact me or any of our MSA team members.


William R. Van Wambeke, General Counsel

voice:  410.628.4050 ext. 1132

fax:  866.724.9650

mobile:  443.618.7206


[1] CMS’ Prescription Drug Set-Aside Guidance for Submitters

This communication may contain information that is privileged and confidential as attorney/client communication or attorney work product, or is otherwise legally protected.  It is not intended as legal advice to any recipient who is not an officer or employee of M Hayes and should be evaluated by such recipient’s legal counsel before any action is taken hereon.


Interesting argument and a close variant of one we have been making for the better part of a decade on behalf of clients. Problem is that CMS doesn’t buy it in their independent review process.


The argument to be made isn’t that a prescription is automatically excluded because it is used off-label. Van Wambeke correctly points out that a listing in one of the compedia is all it takes to legally prescribe an FDA approved drug for off-label purposes. The argument is that a specific drug regimen would not meet the standards for Part D coverage. I can guarantee you that the average Medicare Part D plan is not as generous as the average states workers’ compensation law. Rules for Part D coverage are complex and vary from plan to plan. In a Part D formulary, certain classes of drugs must be offered as part of the plan, while others are severely limited. I wonder how many part D plans allow unlimited use of Actiq for back pain?


I question the wisdom of sending a blast email trumpeting a victory on a single case. Getting something changed with CMS is as much a matter of catching someone on the right day in the right frame of mind then any type of rational argument or skill on the part of the requester. I suspect this situation proved the exception and not the rule since I haven’t seen any mention of the other cases they reference above and how they ultimately turned out. A better strategy would be to count your good fortune, high five the person in the next office and quietly steal away into the night before said CMS employee changed their mind (even better would be to resolve the Rx issues in the record prior to submitting to CMS or forego the approval process altogether on claims where there is a viable defense supporting the exclusion of certain drugs).


Nonetheless, Mhayes is a good company with a good reputation among its clients with respect to its other services. Others should take note that the MSA business is a lot more complicated than it looks from the outside. Kudos to MHayes for recognizing this fact and not exposing their customers to adverse outcomes for the sake of making a few extra bucks. I can think of quite a few others that should follow their lead.