2010 wrap-up and predictions for 2011

Medicare Set-Aside Blog on December 30, 2010
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Let’s take a look back at the Top 10 MSP industry happenings in 2010 and see what 2011 may hold.

#1- You may be talented, but you aren’t irreplaceable. Several of our industry’s “bad actors” were shown the door this year along with key members of their management teams. Whether by armed guard or a planned departure, the owners of the firms in question decided they were better off without these individual’s services. I couldn’t agree more.

2011 Prediction – MSA firms will be upgrading their talent and bringing more subject matter experts to bear on complex cases as opposed to the assembly line of old. Look for a labor shortage in the marketplace of credentialed, talented people.

#2 – Many start-up MSA “experts” have folded their doors in 2010 along with one of the biggest players in the space. They learned the hard way that it takes more than a couple of nurses and slick marketing to run a successful MSA firm. As buyers become more sophisticated in their purchasing decisions, there is no room for companies that don’t possess the required expertise, staff and operational experience. Congratulations to Crowe Paradis for being the latest success story in the MSA acquisition game. They walked away with 90M in a really smart strategic acquisition.

2011 Prediction – Expect more closures and product line discontinuations in 2011 as the industry continues to consolidate. CPSCMSA will be the last blockbuster MSA deal for awhile since the other top 10 MSA firms are spoken for and we don’t have any interest in being acquired.

#3 – 2010 marked the end of the donut hole and DUR. These programs brought little value to clients on either side of the aisle and were in direct conflict with the MSP. While the DUR lives on as a tool to mitigate drug expenditures pre-settlement, there have been enough $500,000 counter offers from CMS to temper the enthusiasm of even the most gung-ho payer for using the DUR to reduce the MSA.

2011 Prediction – The rise of post-settlement administration will be the next hot marketing tactic with several large firms putting on a full court press for business. But like the other tactics of old, it is expensive to payers and not appropriate for a wide variety of cases.

#4 – Mandatory Insurer reporting was scheduled to begin, then delayed, then delayed again for liability payers. The MSA firms that bet the house on tying Section 111 reporting to increased MSA revenue initially breathed a sigh of relief as they scrambled to upgrade their staff and technology to meet demand. Plus it gives them a year to mop up any hold outs that are still on the fence.

2011 Prediction – With reporting for WC payers set to begin in January, the wisdom of their strategy will soon become apparent. I think they will muddle through without any serious damage to their P&L statements or E&O coverage. But payers will recognize that the reporters aren’t doing a whole lot for them and will gravitate to an internally developed solution.

#5 – With the delay in reporting, liability payers and attorneys alike seem to be content to kick the can down the road for another year. The delay in reporting for liability payers was a very good thing. Neither the payers, attorneys nor CMS were prepared for the onslaught of claims affected by the MSP. I would caution the liability industry to put the next 12 months to good use and get your compliance programs in order.

2011 Prediction – More of the same as we saw in 2010 with payers and attorneys looking for education and solutions but procrastinating on implementation. They continue to hope this “whole Medicare thing doesn’t apply to us”. Trust me. It applies to you.

#6 – We are finally getting some case law to work with in our fight against CMS’ overreaching policies. With several lawsuits in the works by major public policy law firms, expect more judicial intervention in 2011. We still need a client with standing to bring the blockbuster case that will curb the most egregious abuses by CMS. Who will step up and save us all?

2011 Prediction – No one.

#7 – The rise of social media and Linked-in in the WC space was really astounding this year. Mark Walls’ Work Comp Analysis Group has 7,000+ members in two years? Kim Wiswell has 600+ in her Medicare Set-Aside Forum. Even this blog gets an average of 200 hits per day. I wish I would have thought of the linked-in group before these two social media pioneers.

2011 Prediction – Look for some copycat groups that will get members who simply like to have group badges on their Linked-in profile. But group participation is based on relevant content, so unless you are committed to moderating an active an engaging forum don’t expect much activity. Since I prefer the one-sided debate where my opinion reigns supreme, I will continue writing for this blog and will only be accepting comments from those that support my position or compliment my intelligence.

#8 – Conditional payments continue to be a nuisance in all lines of business with the MSPRC taking a long time to resolve inquiries and many inappropriate payments being included in recovery efforts. Things are getting better. Before they get worse with the implementation of Mandatory reporting.

2011 Prediction – Conditional Payments, Conditional Payments and more Conditional Payments. Expect delays of 6 months or more to resolve a case so thinking about the “Medicare lien” on the eve of a mediation or trial is probably not the best strategy. See #5.

#9 – A kinder, gentler CMS (sort of). 2010 marked the first time I have seen CMS generally try to reach out to the MSP industry and accept some feedback. The only problem is they don’t seem to be implementing much in the way of policy. Recently, they reached out to the Top 10 submitters of MSAs to pilot a trial online submission program which was a nice gesture. But then it was abruptly postponed before it got started. There really needs to be more of this type of interaction to improve the process for all industry participants. 

2011 Prediction – I don’t see much on the horizon that is going to motivate CMS to make any voluntary, radical changes to their program or policies. Hopefully, the relationship between industry participants and CMS will improve to a point where meaningful change can occur.

#10 – The death of HR 4796 in committee put the brakes on the insurance industry’s hopes for MSP relief. Although this bill, and all bills that have come before, was essentially dead on arrival, hope springs eternal. A legislative fix to the MSP? RIP 2007-2010.

2011 Prediction – We will try, and fail, again. A fix to the MSP has no real support among Congress. Fixing the program isn’t going to get anyone elected, isn’t going to make any difference to a vast majority of Americans and probably does not have enough cache or money behind it to motivate a Congress to action. If we are serious about a legislative fix, then we need to be prepared to put some serious PAC money behind the cause. Otherwise, a judicial fix is the most cost effective and expedient approach to curbing some of the major abuses. Prediction? Status Quo.

Have a Happy New Year. We will see you in 2011.