Medicare Part D Coverage for Opioids and the MSA

7.16.2019 Blog

A Medicare Set-Aside (MSA) is a settlement tool used by parties to prevent a cost shift of future injury-related Medicare covered expenses to Medicare when the settlement terms close out liability for future medical. The MSA will generally include projections for future injury-related medical treatment and prescription drugs that are covered by Medicare. Since the MSA funds must be properly exhausted before Medicare will become primary, the funds may only be used to pay for those expenses that would normally be paid by Medicare. The Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide, Version 2.9 (January 4, 2019) (Reference Guide) states: “If payments from the WCMSA account are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses for the WC settled injury or illness, Medicare will deny all WC-injury-related claims until the WCMSA administration can demonstrate appropriate use equal to the full amount of the WCMSA.” (Section 17.3 ) The Reference Guide further states that Medicare coverage for a particular medical service or prescription drug expense may be determined by reviewing CMS’ website. This article will examine Medicare Part D plan coverage issues when it comes to opioids.

Medicare coverage of drugs may change over time. The opioid abuse epidemic has prompted both local and federal governments to take action to try to halt the epidemic. In 2016, the Comprehensive Addiction and Recovery Act (CARA) gave Medicare programs the authority to limit a Medicare beneficiary’s access to coverage for opioids and other frequently abused drugs under certain circumstances. In 2018, CMS introduced a three-prong approach to deal with the opioid abuse epidemic. The approach focuses on: prevention of new cases of opioid use disorder, expanded access to treatment for the disorder, and data sharing to assist with the prevention and treatment of opioid use disorders. Recently, in 2019, Medicare Part D plans implemented opioid overutilization initiatives that are expected to continue into 2020. The opioid overutilization initiatives provide for better coordination of care between the treating physician and the pharmacy when a beneficiary is determined to have high risk opioid use.

Under these initiatives, Part D plans are expected to have real-time opioid care coordination requiring discussion with patients and prescribing physicians about the risks of opioid overdose and prevention when a beneficiary is daily dispensed 90 morphine milligram equivalents (MME) by a pharmacy. Additional safety edits may also be triggered by exceeding a predetermined specific number of prescribing physicians or pharmacies that are being used by the beneficiary. In addition, CMS recommended that Part D plans limit initial opioid prescription fills to seven days when prescribed for acute pain. These limitations do not apply to beneficiaries in long term care facilities, hospice care or those that are being treated for active cancer related pain.

Many Medicare Part D plans provide Drug Management Programs (DMP) as a way of coordinating this care. Under the DMPs, a Medicare Part D plan may limit at-risk beneficiaries’ coverage of opioids and benzodiazepines to specific selected providers and or pharmacies. Exceptions to these limits would be available in certain circumstances. As of January 1, 2022, all Part D plans will be required to have DMPs in place.

The 2019 and 2020 Overutilization Monitoring System (OMS) criteria also require – at a bare minimum – that all Part D sponsors with DMPs review beneficiaries for the following: use of opioids with an average daily morphine milligram equivalent (MME) greater than or equal to 90 mg for any duration for the last six months and either three or more opioid prescribers and three or more opioid dispensing pharmacies, or five or more opioid prescribers. Supplemental DMP criteria may also provide for review of beneficiaries who are using any level of opioids with seven or more prescribers or pharmacies.

It is clear that CMS expects Medicare Part D plans to be proactive in the prevention and treatment of opioid use disorders. Since MSA funds may only be properly spent on injury-related Medicare covered drugs, it will be interesting to see what, if any, impact the Part D opioid coverage limitations may have on the way MSA accounts are administered. We will keep you advised.


The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.