MSA Metrics that Matter

Rita Wilson, CEO
Tower MSA Partners

In the words of Peter Drucker, “You can’t manage what you don’t measure.” This is particularly true when it comes to claims settlement and the preparation and approval of Medicare Set-Asides (MSAs). You cannot improve your MSA outcomes without first measuring the performance of the current program.

Workers’ compensation professionals are inundated with data. Determining which data to use and aggregate into metrics that matter confound even the most ardent data geeks.

Valuable data reside in the MSA reservoir. This information can inform settlements, reduce costs, and smooth and speed the process of submitting MSAs for approval from the Centers for Medicare and Medicaid Services (CMS). These data help employers, third-party administrators, insurers, and other payers balance care, cost, and compliance in their MSAs.

So, which data are needed and how can it be obtained? What metrics will tell you what you need to know?

First, consider the results you’d like to see. Most payers want to bring claims to closure without overfunding the settlement.

Second, have the MSA prepared with an eye to identifying cost-drivers with recommended remediations.

If they submit the MSA for CMS approval, payers want the fastest and smoothest approval possible without a receiving a counter-higher demand or a development letter requesting more information. Delays in the preparation, submission and CMS approval of MSAs keep claims open longer. Claims continue to incur treatment and sometimes indemnity expenses and payers run the risk that the injured worker will change their mind about the settlement.

Analyzing CMS responses to MSAs and benchmarking your results against CMS provide insight in how to draft MSAs that can be easily and quickly approved. The questions and metrics needed to assess acceptance include:

  • What percentage of the MSAs submitted to CMS were accepted?
  • What was the average turnaround time for CMS approval?
  • Development letters were sent in what percentage of the submitted MSAs?
  • What percentage of the MSAs were challenged with a counter-higher allocation?
  • What caused CMS not to approve MSAs?

Using the answers, payers can develop measurable objectives to improve the MSA process. Problems tend to lie in the drafting of the MSA and the submission of incomplete MSAs or those that are not properly documented.

Identify Cost Drivers

With MSAs, payers need to assess cost drivers, such as pharmacy spend, which most payers agree is the biggest cost driver. In fact, some organizations avoid claim closures altogether because they’ve heard about outlier MSAs with hundreds of thousands of dollars in pharmacy costs.

To address high pharmacy costs, here are some metrics to determine the program’s status:

  • Average and median cost of prescription drugs on all CMS-approved MSAs.
  • Percentage of CMS-approved MSAs that fund opioids.
  • Percentage of CMS-approved MSAs that have no prescription drugs.

For example, what is the median amount of pharmacy expense on your CMS-approved MSAs? For comparison, the median amount of prescription drug costs on CMS-approved MSAs across Tower MSA Partners’ book of business in 2019 was $21,924.

The results of this exercise will reveal the main cost drivers so you can decide which clinical interventions to deploy.

Interventions that Matter

Some MSAs are full of brand-name drugs and duplicative or questionable medications. Medical records often list medications that have been discontinued. However, unless discontinuance is properly documented, CMS requires MSAs to fund those drug costs.

Clinical interventions, including working with treating physicians to update drug regimens, can radically reduce costs. In one case, the initial MSA allocation came in at $1,687,081. Working with the physician to switch brands to generics and updating the prescription history to document ongoing generic use saved over $1.5 million in pharmacy costs.

Other performance indicators are the average MSA allocation, average amount of successfully disputed conditional payments, and re-review rates.

Run the Numbers

When considering a new MSP/MSA partner, check their stats. Ask for:

  • A breakdown of the percentages of CMS MSA approvals, counter highers and counter lowers.
  • Percentage of MSAs with and without prescription drugs.
  • Average and median CMS-approved MSA amounts.
  • Their success rates for clinical interventions and the average dollars saved.
  • The number of Medicare conditional payment searches and investigations initiated along with their success rates for disputes and appeals, including total dollars saved.
  • How often CMS issues Development Letters on MSA submissions.
  • Percentage of counter highers they have submitted for re-review and those results.

Take time to evaluate your MSA process and find and address cost drivers. Then, develop strategies to optimize the MSA before finalizing them. Know your numbers so you can reverse-engineer processes and continually improve your MSA and claims settlement outcomes. Metrics matter. Find out which metrics matter most to your organization.

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Tower MSA Partners

Tower MSA Partners provides Medicare Secondary Payer services that focus on settlement optimization via pre-MSA intervention and cost mitigation.

Services include pre-MSA Triage, Medicare Set-Asides, physician peer reviews, drug utilization reviews, CMS submissions, medical cost projections, life care plans, conditional payments, and Section 111 reporting.

Tower leverages leading edge technology to proactively stage claims and works collaboratively with clients to identify issues and intervene to modify outcomes. Tower remains involved in the claims through final resolution, MSA and/or other settlement.

This model enables Tower’s clients to provide better care to injured workers, reduce claim and MSA costs, and obtain CMS acceptance of the MSA. Headquartered in Delray Beach, Florida, Tower can be reached at 888-331-4941 or or