PMSI Puffery

Medicare Set-Aside Blog on May 18, 2010
Posted by


It appears that MSA marketing has sunk to a new low yesterday with Joe Paduda’s blog post  “Good news on a Monday – CMS’ change in MSA ‘accounting’”. It is important to read that post at prior to reading further. Make sure to read the comments by John Williams of Gould and Lamb and Paduda’s response.


All caught up with the story? Just so you know where I stand, here is a comment I submitted and subsequently withdrew, preferring to address the subject on this blog.

I don’t agree with John Williams on much of anything but on this post he is absolutely correct. PMSI’s shameless puffery of their involvement in this matter is laughable to those of us that actually understand the MSA industry and the behind the scenes machinations with CMS.  I can personally attest to dozens of firms, attorneys and organizations that were instrumental in advancing improvements in the CMS review process. Consider this email…

This is an issue I have been pushing with CMS for a long time and, ironically, after we exited the MSA business they finally came around.  How much of that was due to my efforts I will never know; perhaps not surprisingly others are already taking credit for it.  An accurate summary of the law is in the Part D Manual and can be accessed here: (see sections 10.1 and 10.6).  If you would like the actual cites to the U.S. Code sections, send me a private email. 


M Hayes

William R. Van Wambeke

Bill is somewhat sanquine here but his point is noted. Kent Takemoto, MD while a tangentially helpful voice in the industry is not the proximate cause of anything (except maybe the collapse of Coventry’s MSA program as the “father of the MSA guarantee”). This is simply a PMSI marketing strategy to sell generally unnecessary DURs to an unsuspecting insurance industry at $1,500 a pop. Furthermore, excluding off-label drugs WILL reduce the MSA but will in most cases still be contemplated in a WC settlement. The good news is it will not be at AWP and not for a lifetime duration. Perhaps Dr. Takemoto, MD can tackle those pressing issues next given his inside track at CMS?

Is this puff piece an introduction of a new HSA client? Or do you generally take the word of anyone that calls and takes credit for a new policy decision at CMS? If so, expect a phone call a couple minutes after the next CMS memo is released from me.


Ok, so maybe that was a little heavy handed but I spend the better part of the day responding to clients who had all somehow heard of PMSI’s victorious slaying of the CMS dragon and wanted to get my take. But seriously, did Joe Paduda really believe this story when he wrote it? Is it possible to be that misinformed? Or was he using his blog to promote the interests of a new (or existing) HSA client? The tone of the piece suggested the latter. But his off-base commentary on the MSA industry in general indicates the former; a consultant being duped by the marketing arm of PMSI.


Interestingly, almost simultaneously with the publication of his blog entry, PMSI’s sales staff began blast emailing clients around the country with this message…

We did it!! CMS has adopted our first four criteria for appropriately allocating future pharmacy in MSA’s. As you know we have been advocating on behalf of the industry with CMS for the past year and the only MSA vendor that has been calculating pharmacy in MSA’s using the methodology CMS has recently accepted since June of last year. We were ecstatic, as I am sure you are. See attached for more details.  

The high cost of drugs in MSAs has dramatically increased the settlement amounts for Medicare beneficiaries. The Drug VALUE Review (DVR), developed by PMSI last year, has been the only methodology to reduce the drug costs in your MSAs – NOW THE DVR METHODOLOGY HAS BEEN APPROVED BY MEDICARE !!!!

And then they released this Press Release…


And then more marketing comes pouring in the door.

Hi xxxx,

I am a National Sales Executive with PMSI Settlement Solutions specializing in Workers’ Compensation and Liability claims.

I am sending this email to share our exciting news with you…

We did it! CMS has adopted our first four criteria for appropriately allocating future pharmacy in MSA’s. As you may be aware we have been advocating on behalf of the industry with CMS for the past year and the only MSA vendor that has been calculating pharmacy in MSA’s using the methodology CMS has recently accepted since June of last year.

We are ecstatic; as I am sure you will be as well. See attached for more details.

Also per the memo, we can re-submit MSA’s on cases that have not settled yet!! So we can do the DVR on any of your in-house MSA’s that have high pharmacy costs and either we can resubmit for approval, or you can provide our DVR and re-submit.

Please let me know if you have any questions on Cost Savings utilizing PMSI’s Drug Value Review.

Warm Regards,


PMSI Settlement SolutionsSM

In the first email, PMSI is careful to say the DVR methodology is approved by Medicare. Not the DVR itself which is a distinction I suspect will be lost on most people. Furthermore, only one part of this methodology is “approved” by Medicare.  Very misleading.

How Joe Paduda in his coincidently timed blog post fits into the picture we will never know. According to an email he sent this morning, he was quite insulted by my insinuation that his post was a result of a client relationship with PMSI.  Apparently, he felt I have no basis to question his ethics. However, I did not intend to question his ethics, it is perfectly reasonable and ethical to use his company’s blog to promote a client’s interest. I just want to know is that the case here or was he misinformed?  Because saying Kent Takemoto was the proximate cause of the CMS memo is like saying Joe Paduda is the promimate cause of health care reform. It is an absurd statement.


I do not mind good marketing that clearly articulates a company’s value proposition in relation to its competitors. That’s fine. For example MEDVAL’s marketing centers around five themes.


We use experienced nurse/attorneys to QA our MSA product and to provide service to our clients
We are fanatical about our client service
We pride ourselves in proving thought leadership to the MSA industry and giving accurate, unbiased advice even when it is contrary to our business interests
We are privately held and are not pressured to “grow sales” at the expense of our client’s needs like those private equity backed big box companies.
We execute our mission better than many of our competitors because of a combination of good business processes, experienced people and longetivity in the marketplace.

What I take exception with is marketing that is overly aggressive, misleading or just plain untrue. I don’t believe in selling clients something they don’t need just to increase sales. And I certainly think it is in bad taste to claim the collective work of many people as your own success and then bombard the insurance industry with your party line. It doesn’t take $1,500 to figure out a claimant is over utilizing Actiq or Lyrica.

Contrary to PMSI’s marketing, MEDVAL PIONEERED the exclusion of off-label drugs and have continued to do so since January 2006 based on our understanding of the law. And we have always done that as part of our MSAs with no additional DVR/DUR needed. Just don’t expect CMS, as part of their review process, to buy the argument. We will see if Friday’s memo changes anything significant.  I suspect some of the most egregious cases of off-label use will be mitigated. I have my doubts about the every day Rx that drives up the cost of individual MSAs. 

This latest campaign by PMSI is self-serving and shameless and should have the effect of turning off educated buyers of MSA services.