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Impact of utilization review on Medicare Set-Asides

Although Utilization Reviews (URs) and Independent Medical Reviews (IMRs) have been used in state jurisdictions for years, insurers have only recently focused on how the Centers for Medicare and Medicaid Services (CMS) treats URs and IMRs when evaluating Medicare Set-Asides (MSAs). Since URs and IMRs can offer significant cost savings, claims examiners are becoming keenly aware of when URs and IMRs are occurring in their cases and what their conclusions are.

How a UR or IMR may affect future medical care on the state workers' compensation level is clear: If a UR certifies the treatment, an employer must authorize it. If the UR denies, modifies, or alters a treatment recommendation, an employee may appeal it to the IMR level (in states where applicable). If the IMR confirms the UR decision, the employer must authorize the treatment as determined in the UR. If the treating physician ignores the IMR and continues to recommend treatment discordant with the IMR, the employer does not have to authorize the treatment. 

Ani Kolleshi 684082 Unsplash

Despite the employer’s authority in this situation to ignore a defiant treating physician, CMS has not found UR denials alone persuasive enough to omit recommendations made by a treating physician when the jurisdiction offers another level of review, namely, an IMR. However,  we have had success in using a UR to override subsequent recommendations made by a treating physician in a jurisdiction where the UR is the highest level of review. This distinction may offer insight into how CMS will weigh URs when evaluating MSAs. In other words, a UR in one jurisdiction is not necessarily weighted the same as a UR in another jurisdiction. Rather, the persuasiveness of a UR at CMS can depend on whether the jurisdiction has another level of review.

Recently, we were successful in using a UR decision as the basis to exclude lumbar facet injections. In this Tennessee case, the treating pain management provider had recommended lumbar facet injection as part of the patient’s future treatment plan. A UR was then performed through which the procedure was denied as not reasonable or necessary. The UR is a mandatory process in Tennessee under Rule 0800-02-06-.05. As such, the employer took the position that the treatment would not be provided nor would the employer be obligated to pay for it, because it was determined not reasonable or necessary. After the UR was completed, the same treating pain management physician continued to request the injections. Nevertheless, using the UR as a basis for excluding the injections, the MSA was prepared and approved without the injections. Had this been a California case, where employees can appeal for an IMR, it’s doubtful that CMS would have excluded the injections based on a UR alone. 

How CMS will allocate treatment when a Utilization Review and treating physician disagree on future treatment is still a gray area. One successful case is certainly not indicative of how CMS will evaluate all similar claims. We continues to collect data to analyze CMS trends. Based on this single case, one can speculate that for a jurisdiction in which no IMR level exists, a UR alone may persuade CMS to omit treatment recommended by a treating physician.

Kendra Phillips

Kendra Phillips is director of quality assurance, Casualty Solutions at Verisk. You can contact Kendra at

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