Accuracy in Section 111 Reporting of ORM Vital to Avoiding Unnecessary Repayment Demands from Medicare

While the Commercial Repayment Center (CRC) has faced some valid criticism over the course of the past year and half in relation to its recovery efforts on behalf of the Centers for Medicare and Medicaid Services’ (CMS), not all problems start with the CRC. CRC’s recovery efforts are driven by the data employers, carriers and self-insured entities report to Medicare through the Section 111 Mandatory Insurer Reporting process. Chief among the data elements reported is acceptance of Ongoing Responsibility for Medicals (ORM) and the termination thereof. If this data is reported inaccurately or there is a failure to report required data, then the applicable plan may be faced with inappropriate recovery demands by the CRC.

 

 

Applicable Plan Reporting of ORM is the Catalyst for CRC Recovery Efforts

 

Since October 5, 2015, the CRC has had responsibility for the recovery of conditional payments where the insurer or employer (including self-insured entities) is the identified debtor, known in CMS terms as the “applicable plan.” The CRC learns of opportunities to recover through the Section 111 Mandatory Insurer Reporting process. In other words, the applicable plan is the catalyst for Medicare conditional payment recovery by its reporting of ORM.

 

The mandatory reporting provisions of the Medicare Secondary Payer Act require the applicable plan to report to Medicare in three instances – the acceptance of ORM, the termination of ORM and issuance of a Total Payment Obligation to the Claimant (TPOC), settlement judgment, award or other payment. In regard to ORM, two key data elements reported are the date responsibility for ORM is accepted and the accepted diagnosis codes. Once this information is reported the following actions are initiated by CMS’s contractors:

 

  1. The BCRC, which handles Medicare coordination of benefits, should deny payment for medical bills submitted for payment in which the billed diagnosis codes match or is similar to the reported diagnosis codes.
  2. The CRC identifies medical claims that Medicare has paid that it deems related to the reported diagnosis codes.

 

Upon the CRC identifying treatment related to the reported diagnosis codes, it will issue a Conditional Payment Notice (CPN) to the applicable plan which itemizes charges deemed related to the injury. The applicable plan has 30 days from the date on the CPN to dispute charges after which a Demand Letter will issue demanding repayment for the charges identified by the CRC. A Demand Letter provides 120 days from receipt of the letter for the applicable plan to appeal all or some of the charges or issue payment. If payment is not issued within 60 days of receipt, interest begins to accrue from the Demand Letter date.

 

 

Reporting Accurate Acceptance of ORM and Diagnosis Codes

 

The trigger for reporting ORM is a claimant identified as a Medicare beneficiary and the assumption of ORM by the applicable plan. ORM is reported when the applicable plan has made a determination to assume responsibility for ORM, or is otherwise required to assume ORM—not when (or after) the first payment for medicals under ORM has actually been made. Accordingly, the ORM acceptance date is typically the date of injury.

 

Along with the ORM acceptance date, at least one ICD-10 diagnosis code must be reported for the diagnosis that has been accepted on the claim (If more than one diagnosis has been accepted, then additional diagnosis codes are reported). While medical provider billing records are often used to determine ICD-10 diagnosis codes to report, these should be used as a starting point, not an ending point, in identifying the correct codes to report to Medicare.

 

Keep in mind that medical providers, and especially hospitals, will often insert into billing records any diagnosis reported to the provider, which are not necessarily the same diagnoses that are being accepted on the claim. Consequently, the person responsible for determining the correct ICD-10 diagnosis code to report, usually the claims handler, must make an independent determination, separate and apart from the medical provider, as to whether the particular diagnosis is being accepted on the claim. If the billing records do not properly represent what is being accepted, or if further diagnosis codes are required to better define what is accepted, then online ICD-10 resources are available to identify codes which correctly represent the accepted body parts and conditions.

 

Once ORM and the diagnosis codes are reported, ORM is generally not addressed again until the date of ORM termination. However, causally related diagnoses may change over time, either expanding or retracting depending upon the circumstances in the claim. Accordingly, it is important to update the reported ICD-10 codes as necessary over the course of the claim.

 

 

ORM Termination Key to Cutting Off Liability to Medicare

 

Once ORM is accepted, CMS claims the right to recover against the applicable plan through the date of ORM termination. As such, recovery efforts by the CRC may happen years after the ORM was first reported. Further, if there is failure by the applicable plan to terminate ORM when appropriate, then the plan may receive repayment demands from CRC for time periods in which it has no liability to pay for medical treatment. An applicable plan may terminate ORM through the Section 111 Reporting process under the following situations:

 

Settlement with a release of medicals

No fault policy limit reached

Complete denial of the claim

Statute of limitations has run or medical benefits have otherwise been exhausted pursuant to state law

Judicial determination after a hearing on the merits finding no liability

Statement from treating physician – signed statement from the injured individual’s treating physician that he/she will require no further medical items or services associated with the claim/claimed injuries.

 

Keep in mind that closing a claim file is not a trigger for ORM termination unless it is accompanied by one of the above situations.

 

Providing CMS with an ORM termination gives a bookend to recovery by the CRC. If no termination date is provided, then CRC assumes the applicable plan remains liable for injury-related payments.

 

 

Recommendations for Ensuring Accurate ORM Reporting

 

The reporting of ORM acceptance and termination and defining accepted diagnosis codes is so important because it is the applicable plan’s admission of responsibility to pay for medical care during the reported time period and for the reported diagnoses. If an error is made in reporting or there is an omission in reporting, then it can result in attempts by Medicare to recover for conditional payments unrelated to the injury or for time periods during which the applicable plan is not liable. Errors in reporting can also lead to inappropriate denials in the payment of claimant’s medical care by Medicare or Medicare paying for medical care for which the applicable plan is responsible.

 

 

Recommendations to avoid these errors and omissions:

 

  1. Train Claims Handlers on ORM Reporting: If a claims handler is responsible for inserting the data required for ORM reporting, then they require training as to when ORM acceptance and termination is to be reported and how to determine the appropriate diagnosis codes to report with ORM acceptance.
  2. Effective Quality Assurance of ORM Reporting: Even with training, errors will occur. Additional resources placed into quality assurance of ORM reporting, such as double-checking claims for proper ORM termination and appropriate diagnosis code choices avoids the expenditure of additional resources at a later date to correct errors in reporting and correction of unnecessary recovery demands from the CRC. If you are an employer or carrier relying upon a TPA to report, it is especially recommended that a QA process be in place to check the data entered by the TPA.
  3. Ensure Reporting Platform is Accurately Reporting: Section 111 Reporting is electronically based and requires a data exchange with Medicare. Errors can and will occur in this data exchange. Ensure you have a trusted and reliable reporting agent to assist with accurate reporting to Medicare.

 

Finally, if any correspondence is received from the CRC or the U.S. Treasury Department claiming conditional payment recovery it must be acted upon immediately. Do not assume the letter was issued in error and will simply go away. If you do not believe you are liable for the conditional payments for which the CRC is claiming recovery, first confirm you have correctly reported ORM and then work with your MSP compliance partner to appropriately dispute the charges.

 

 

 

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance.  For questions stemming from this article please contact Dan Anders at (888) 331-4941 Daniel.anders@towermsa.com.

How to Help Frustrated Injured Workers’ OUT of Work Comp System…And Save Money Settling Tough Claims

Imagine a scenario where an injured worker who’s been receiving workers’ compensation benefits for years and shown no interest in settling the claim is suddenly willing and even happy to do so, and both he and the payer are pleased with the agreement. The payer gets the long-term claim off the books, and the injured worker has someone guiding him through the medical system while helping to manage his money long after the settlement is reached. Both parties save money in the process.

 

This panacea is not only possible, it is happening; and at no extra cost to the payer or injured worker. Professional administration is enabling an increasing number of settlements to occur and leaving all parties feeling grateful with the results. Professional administration organizations that have a solid background in all aspects of workers’ compensation are becoming the answer to the frustrations faced by long term injured workers.

 

The concept of professional administration is not necessarily new in the workers’ compensation industry, but until recently it was generally cost prohibitive for many organizations. Recently that has changed, as newer entrants have found ways to save money for all concerned.

 

The way it now works is simple and effective:

 

  • Those with the appropriate competence are able to offer significant discounts to injured workers through their networks of medical providers and pharmaceuticals.
  • They function much as an engaged claims adjuster would in terms of helping the injured worker find the best providers.
  • However, the injured worker’s care is not subject to utilization review.
  • The professional administer also helps the injured worker manage his settlement money, whether lump sum or structured, and can ensure injured workers receiving Medicare are compliant with government reporting requirements.

 

 

Overcoming Frustrations

 

Professional administration can work well for any injured worker with a long-standing claim but is especially advantageous for those exasperated with the system;

 

  • Tired of Utilization Review denials.
  • Required to drive many miles from home to see an approved physician – whom she may not like.
  • Attorney has abandon the injured worker as she has already settled the indemnity portion of claim.
  • The idea of settling the medical portion of claim makes her even more anxious, as she is afraid she will ultimately run out of money.

 

Such stories are fairly commonplace in the workers’ compensation system. Injured workers who have been in the system for a long time are afraid of the unknown, post-settlement scenario and are therefore willing to continue receiving benefits indefinitely.

 

Professional administrators can be invaluable in helping to reach a settlement and after the agreement is set.

 

 

Pre-Settlement

 

Among the many concerns of long term injured workers facing a potential settlement are the financial unknowns; how much will various treatments and medications cost, now and in the future? What if unexpected complications arise – will there be enough money to treat them? What if durable medical equipment becomes necessary – is there enough for that? Is the settlement money enough to ensure living expenses can be covered for the long term? Who should manage the money?

 

More concerns are present when the injured worker is receiving Medicare:

 

  • What medical services should be funded through Medicare?
  • What if Medicare is mistakenly billed for a treatment the injured worker should have covered?
  • How, when and where are the Medicare reporting requirements handled?
  • What if they are reported improperly?

 

It’s easy to see why many injured workers would be leery of settling their workers’ compensation claims. A professional administrator can price out the prescriptions and treatments and show the injured worker an accurate picture of the costs, especially when network discounts are included. Competent organizations get involved with all parties to the claim before a settlement to reach the best solution for all concerned.

 

 

Post-Settlement

 

Typically, there is no help for an injured worker after a settlement is reached. Those with extensive and expensive medical needs and/or those not comfortable managing the settlement money feel lost.

 

  • With a professional administrator involved, the injured worker has full control over choice of providers, and an expert helping to manage the settlement funds.
  • In addition to discounts for medications and providers in the network, there may be a 24-hour/7-day-a-week phone line available to discuss care issues.

 

Because of the savings associated with a professional administrator, injured workers often have money available for things such as a child’s education, starting a new business, or taking an exciting trip. Above all, they have peace of mind about the future.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

How To Settle Tough Workers’ Comp Cases Without Unintended Consequences

How to Settle Tough Workers' Comp Cases Without Unintended ConsequencesA structured settlement can be a great way to ensure an injured worker is able to care for himself and his family for life. But it’s important to make sure all the right parties involved and are working as a team. Otherwise, there could be adversarial relationships and unintended consequences down the road.

 

While most people believe they would be best able to control their money by taking a lump sum, there are vast amounts of research to the contrary. Many people who do so end up with little to no money within just a few years. A structured settlement provides the injured worker with a steady, predictable tax-free income to handle all of life’s obstacles – when it is set up correctly.

 

 

Types of Issues

 

The injured worker’s future medical and living expenses are obvious needs. But, setting up a lifetime income stream entails identifying and thinking through all of a person’s financial needs over his lifetime. Examples of just a few of the issues that might need to be addressed include:

 

  • Medicare compliance.
  • Lien satisfaction.
  • Public benefits.
  • College education.
  • Home ownership.
  • Business setup.

 

A properly developed structured settlement must take into account the needs of the particular individual, since each person is different. Focusing on those, rather than just a dollar amount, yields the best outcome for all.

 

As an example, an injured worker who is a quadriplegic might need money for medical treatment and pharmaceuticals, home modifications, a vehicle retrofitted to handle his needs, money for his child’s eventual college education, and funds to establish his own business so he can be a productive member of society.

 

An injured worker incapable of caring for her own children might need money for caregivers for them, as well as someone to help care for herself. Additional funds might be needed for the children’s college educations.

 

It’s imperative to determine what is most important to the injured worker.

 

 

People Involved

 

The settlement could include a combination of strategies. For example, there may be liquid cash to handle immediate financial obligations such as medical expenses or liens resulting from the injury, a trust to protect certain benefits, and a tax-free annuity to cover future financial needs.

 

A properly setup structured settlement can solve complex problems if the key people are involved in the process. The first step is to identify the injured worker’s needs and goals; then consult with all relevant parties.

 

Some of the key players in a structured settlement could be:

 

  • Structured settlement broker. You want a reputable person and organization with experience and a solid track record of producing successful structured settlements.
  • Injured worker. The injured worker should not be an afterthought in the process, but should be actively engaged to avoid disputes later on.
  • Family members. Depending on the injured worker’s situation, it might be beneficial to include a spouse, sibling(s), parent(s) children, and/or relatives.
  • Medical personnel. The treating physician and possibly additional medical experts should be consulted to ensure all the injured worker’s medical issues are addressed.
  • DME specialist. Wheelchairs, ramps, and special equipment for the home and/or vehicle should be considered both for the immediate future and the long term.
  • Lawyers involved in the claim should all be included in the structured settlement discussions to iron out any challenges that might arise. Additionally, there may be a need for additional attorneys, perhaps to set up a special-needs trust.
  • Benefits experts. If the injured worker is receiving Medicare, Medicaid or some other public benefit, experts should be consulted to ensure those benefits are protected. Also, the injured worker may have questions; for example, he might want to know how much Medicare would provide for special equipment, such as wheelchairs or home modifications.
  • Tax/financial experts. These experts may be needed to answer questions about future issues that might arise, such as the tax consequences involved in setting up a home business.

 

 

Conclusion

 

Structured settlements offer peace of mind for injured workers seeking a long-term income stream. They are tax free, customized, and carry no risk, as they are not subject to the whims of Wall Street.  By working closely with the injured worker and assembling all the appropriate parties, a structured settlement can be a win-win for all involved.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Second Chance with MSA Approval: New CMS Policy Allows for Review of a New MSA Post a Prior Approval

While there may be no second chances in life, there is now a second chance for CMS review and approval of an MSA. On July 10, 2017, the Centers for Medicare and Medicaid Services (CMS) quietly rolled out a new policy allowing for a re-review of a previously approved Medicare Set-Aside which is between one and four years post-submission and for which there is a certain dollar amount change in projected future medical care since that time. The policy, which CMS calls an Amended Review, requires the previously approved MSA meet the following criteria:

 

 

  • Must have been originally submitted between one and four years from the current date.
  • Cannot have a previous request for an Amended Review.
  • Must result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount (The amount can be greater or less than the previously approved MSA amount).

 

 

CMS also notes that while you may change from brand-name to generic drug types, this change cannot be the sole reason for the Amended Review request. You must include additional changes such as changes in dosage and/or frequency, additional drugs or drugs no longer taken to qualify for the Amended Review.

 

A copy of the policy can be found in Section 12.4.3 of the revised Workers’ Compensation Medicare Set-Aside Portal (WCMSAP) User Guide found here.

 

 

Practical Implications of Amended Review Policy

 

Prior to this new policy, CMS, in almost all cases, would not review a new MSA proposal based upon post-submission medical records and pharmacy history once an MSA was approved. Consequently, if parties were unable to settle a case because of a high CMS MSA approval, but came back to the settlement table a couple years later when the claimant’s medical care had subsided, they were unable to obtain a revised MSA approval from CMS which would accurately reflect the claimant’s current and future course of medical care. Under this new policy, these cases which are within 1-4 years post the original MSA submission and meet the 10% or $10,000 (whichever is greater) criteria will have a second chance at CMS review and approval of an MSA.

 

 

Unanswered Questions Regarding Policy

 

As with many a new policy CMS left some unanswered questions.

 

It is unclear why CMS limited the Amended Review policy to submissions made within four years. We assume this is to limit the number of MSAs submitted for an Amended Review, but there remain cases older than four years which would benefit from this policy.

 

 

While we do not like to look a gift horse in the mouth, it seems unreasonable of CMS to preclude from its Amended Review policy requests which are based solely upon a brand name medication going generic or a claimant otherwise switching to a generic medication. This type of change often results in a significant reduction to the MSA.

 

 

The 10% or $10,000 change (whichever is greater) policy effectively means that there must be a $10,000 change to a previously approved MSA of $100,000 or less before it meets the criteria for an Amended Review. However, the example CMS provides in the User Guide inaccurately reflects a change on an $80,000 MSA of $8,000 as meeting the Amended Review criteria. We believe either the policy or the example is in error. We await CMS correcting this example or clarifying its policy.

 

 

Does My Case Fit the CMS Amended Review Criteria?

 

The Amended Review criteria opens the door to the settlement of some older cases where prior CMS approved MSA amounts no longer accurately reflect the claimant’s current and future course of medical care. Please feel free to reach out to Tower MSA Partners for an evaluation as to whether your previous CMS approved MSA may meet the Amended Review criteria. Tower MSA may be contacted at info@towermsa.com or (888) 331-4941.

 

 

Additional Changes in Updated WCMSAP User Guide

 

Besides the introduction of the Amended Review policy, CMS also made the following notable changes to the WCMSAP:

 

 

  • Claimants who are Medicare beneficiaries now have access to the WCMSAP through MyMedicare.gov. Accordingly, claimants are able to view MSA submissions and supporting documentation although will not be able to modify the documentation or otherwise take any actions on the submission which remain solely with the submitter of the MSA, i.e. Tower MSA.
  • For MSA submissions that have been closed for more than 12 months (Usually as a result of a non-response to a Development Letter), an entirely new MSA submission must be made with all documents generally required of a new MSA submission, i.e. two years of medical records. The new MSA submission will be assigned a new Case Control Number.

 

 

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance. Contact: (847) 946-2880 or daniel.anders@towermsa.com

 

Leverage Post-Settlement Professional Administration for Truly Optimal Outcomes

Leverage Post-Settlement Professional Administration for Truly Optimal OutcomesEvery now and then an idea comes along that makes so much sense you wonder why it hasn’t been around all along. In the case of professional administration to handle post-settlement medical fund management, it actually has; but it’s now been perfected so it makes logical and financial sense for injured workers and payers alike.

 

For the injured worker it means they’ll continue to have someone to manage their medical care and assure appropriate compliance with Medicare. For payers, it means finally settling claims that have been on the books for months or even years. For both sides, it means significant dollars saved, it is truly a win-win for all parties involved.

 

 

What Is a Post-Settlement Professional Administrator?

 

Many injured workers get frustrated with the workers’ compensation system, but are nevertheless leery about settling their claims. They are concerned they might not have enough money to handle their future medical and indemnity needs; they may additionally fear they won’t be able to fully comply with Medicare reporting requirements, if a Medicare Set-aside is included. In many cases, as much as they dislike the workers’ compensation system, they are even more fearful of navigating their medical care on their own without someone with expertise to help. This is where professional administration comes in.

 

The level of care the injured worker is used to continues to be provided when a quality professional administrator is involved. In many cases, the care may even be better. The administrator coordinates medical treatment, but without the frustration of utilization review; i.e., providers, treatments and pharmaceuticals are not denied. Deep discounts on treatments and medications are available because of the administrator’s networks. With some companies, there is even a 24-hour support line available. The administrator helps ensure that the money lasts, and the injured worker has an advocate for their medical care and finances.

 

A comparison between the typical services involved in a workers’ compensation claim and those available after settlement through a professional administrator shows they are nearly the same:

 

  • Provider bill review. The discounts provided through the professional administrator’s network can be the same or even better than those available in the workers’ compensation system.
  • Pharmacy benefit manager and durable medical equipment networks: Again, the savings on these can be substantial through the administrator’s network.
  • Phone support.
  • Provider recommendations.
  • Reporting – with a professional administrator all Medicare Set Aside reporting is 100% guaranteed.
  • Bill administration.
  • Utilization review – with a professional administrator, there is none!

 

What makes the idea of a professional administrator even more appealing is that having greater discounts on medical treatments means there is more likelihood the case with settle and the administrator will earn the business. Therefore, it behooves the professional administrator to have a strong network and do the right things for the injured worker, to maintain the relationship and be able to offer further discounted services.

 

 

Benefits to Payers

 

A professional administrator can be brought into the process at any time, and there is no cost unless the case settles. With a solid, experienced group, payers are finding their long-term, seemingly endless claims are settling. But it’s not only the fact that there is a settlement that saves the payer money, it’s also the ultimate dollar amount.

 

Calculations for future medicals can be tricky. There must be accounting for the medical procedures, medical providers and the cost of pharmaceuticals. Add to that the expenses of unexpected complications and inflation, and the amount for the medical portion of the settlement can be staggering.

 

Bringing a professional administrator into the discussions before the settlement is reached can be advantageous to the payer and the injured worker. Because of the network discounts, the future medical costs can be substantially lower than would be typical. Also, the professional administrator can demonstrate real costs to the injured worker, making them more comfortable with the final number.

 

 

Conclusion

 

Many injured workers simply lack the expertise, or interest, to manage the responsibilities of their own medical care, nor do they have access to discounted services and treatments.

 

Professional administration can fill the gap and make a settlement attractive to both parties. A company with solid experience and proficiency in all aspects of workers’ compensation claims can be the right solution for all concerned.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

4 Times When a Workers Comp Claim Should NOT Be Settled

4 times when NOT to settle a workers comp claimIn the workers’ compensation claims world, a common held belief is “the more settled claims, the better”.  However, there are several times when, a claim should NOT be settled — at least not yet:

 

  • When you are not sure the claim is legitimate – if you are still questioning in your own mind whether the claim is legitimate, or whether your company is “being taken for a ride”, hold off settling the claim until you are SURE. There’s nothing wrong with “going with” your gut instinct. This means you should do two things:

 

  • have your own medical advisor review the file and
  • do a thorough sub rosa investigation over an extended period of time (I don’t mean ONE day — I mean “extended”).

 

  • When it sets a bad precedent in the workplace – If you have the type of workplace that one or two settlements could draw in a whole pack of other claims, then I would tend not to settle the claim. Your company may become known as “an easy mark.” You want to pay the exact benefits due, when they are due so the employee receives what he/she is supposed to. Explain this policy in your Employee Brochure.  If employees think the only way they can get their full benefits is to hire an attorney, they are much more likely to do that. When that’s how things transpired for other injured employees in your workplace, it sends the message that is the only way the employer will pay benefits to which employees are entitled.

 

  • When the employee’s condition could still improve – The appropriate time to settle in cases which should be settled is after the employee has reached MMI (Maximum Medical Improvement). Only at this time will it be known how much the employee will be disabled, how much cost he will incur for future medical care, future lost wages, and other expenses such as home-care.

 

  • When the claim is being settled only because it’s a “nuisance” – Your company will want to determine if they want to take a stance in “nuisance cases” and settle them for “nuisance value” (insignificant amounts) or “defense costs” in order to close the matter. Some companies do, some don’t. Although being in litigation is inconvenient at best and a nightmare at worst, that does not mean you want to settle every inconvenient claim.

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Case Study: 60% MSA Savings From CMS Re-Review Process

While the Workers’ Compensation Medicare Set-Aside (WCMSA) review process remains voluntary, it is an excellent tool to provide certainty in your settlements.  The major downfall of the process is the lack of a formal appeal from an adverse WCMSA decision by CMS.  CMS nonetheless provides a limited “re-review” process which, in the hands of a capable Medicare Secondary Payer service provider, can often yield a favorable result, reducing your MSA costs and helping you realize significant savings.

 

 

Understanding the Re-Review Process

 

If CMS responds to the submission of a WCMSA with a counter-higher (that is, it increases the proposed MSA amount), you can request a re-review in the following instances:

 

  • You believe CMS’ determination contains obvious mistakes (e.g., a mathematical error or failure to recognize medical records already submitted showing a surgery, priced by CMS, that has already occurred); or

 

  • You believe you have additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal and which warrants a change in CMS’ determination (emphasis added).

 

Knowing how to effectively use the re-review process is key and should include using a trusted MSP service partner to drive settlements when CMS disagrees with the original allocation.

 

 

Case Study (Provided by Tower MSA Partners): 60% MSA Savings From CMS Re-Review Process

 

CMS may increase prescription medication allocation in a WCMSA if there are inconsistencies in the medical records or the prescription histories, variances in pricing based upon the fluid movement of Redbook medication pricing, or prescription medications are left open-ended in the medical treatment records. This case study considers the challenge and solution to a re-review presenting both inconsistencies in medical records as well as open-ended prescription medications.

 

 

Challenge

 

CMS countered higher to include Gabapentin 600 mg tablets (AWP-$2.28/per pill), increasing the CMS approved MSA amount to $98,054. The physician had increased prescribed strength from 300mg to 600mg.  However, the injured worker had not filled 600mg prescription. The prescription drug history showed consistent fills of Gabapentin 300 mg capsule (AWP -.03/per pill).

 

 

Solution

 

Tower MSA prepared a letter for submission to the treating physician confirming continued fills of Gabapentin 300 mg capsules. As required in Montana, notice was given to the injured worker and his counsel prior to initiating contact with the physician. The letter was submitted to the physician’s office via fax and was placed on physician’s letterhead and executed by the physician with language as follows:

 

“The above captioned patient is under my care for treatment of chronic back pain and neuropathic pain. He will be prescribed Gabapentin 300 mg capsules taking 2 capsules three (3) times / day to help him manage his pain”.

 

The executed physician letter, which emphasized the consistent history of Gabapentin 300mg refills, was submitted to CMS for Re-Review.

 

 

Result

 

CMS accepted Tower’s physician letter and reduced its CMS approved MSA amount from $98,054 to $33,319, resulting in a savings of $64,735.

 

While CMS stipulates in its guidelines that documentation obtained post CMS submission will not be accepted, the use of the rationale that the injured worker had not filled the 600 mg strength was effective to obtain a positive CMS Re-Review outcome.

 

 

Conclusions

 

The WCMSA review process is unavoidable when the settling parties require the assurance of CMS’s stamp of approval   Claims management teams and other interested stakeholders can save their programs time and money by fully understanding and properly planning and coordinating both the MSA submission and re-review of a counter-higher if necessary.  An experienced MSP service provider is recommended as the planning, coordination, and execution will be included at no additional charge in a best-in-class program.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Surveys Results: People Often Regret Choice of Lump Sum Settlement

There is significant opportunity to increase the level of satisfaction and security in workers’ compensation settlement cases.  According to a pair of studies, it’s just a matter of better education regarding the use of Structured Settlements.

 

A study three years ago echoed the findings of a survey six years before; when people are informed about the benefits of structured settlements, the majority will at least consider the option. The reports also show that the people who are most influential to individuals faced with an injury award — attorneys — are either unaware of, or just don’t tell their clients about alternatives to lump sum payments. The surveys also found that many people who choose lump sum payments become increasingly sorry about that choice as the years go by.

 

 

Many Not Aware Of Structured Settlements

 

People often speculate about how they would take the millions they would get if they won a state lottery. Often the response is they would take the cash upfront instead of getting an income stream via an annuity.

 

The situation is similar for an injured person who is offered money to finalize a workers’ compensation or other type of claim. While a judge may mandate a structured settlement in rare cases, the injured person typically has a choice between a lump sum payment minus taxes, or a stream of tax-free payments paid out over the long term to pay their future medical expenses and basic living needs.

 

Structured settlements became legal as a way of compensating injured individuals in 1982. But the surveys show many people have little or no idea they exist or how they work.

 

 

Survey 1: 73% Choose Structured Settlement When Informed of Benefits

 

The first survey, sponsored by American General Life Structured Settlements was conducted in the Fall of 2007 and included more than 1,000 Americans, most of whom had not received or been connected to anyone with a major injury claim. They were given two scenarios and asked to choose a payout option.

 

  • Scenario I: A 35 year old married worker with three kids is paralyzed from the waist down following an auto accident and is ultimately awarded $750,000. The respondents were given no information about structured settlements vs. lump sum payments, but were asked how they would take the money.

 

Sixty-five percent said they would take the lump sum payment while the other 35 percent opted for the structured settlement. Nearly half of the lump sum respondents did so because they believed they could make their own financial decisions. Another big reason was to pay off major debts, along with the flexibility of not being locked into an annuity.

 

  • Scenario II: The 22-year-old widow of a husband killed in a construction accident is offered $2.5 million. But in this scenario, the respondents were given descriptions of structured settlements vs. lump sum payments.

 

The vast majority — 73 percent chose the structured settlement. Their main reason was that it provided a regimented stream of income for monthly expenses.

 

Interestingly, both groups cited two of the same reasons for their decisions: “guaranteed financial independence,” and “to avoid living on public assistance.”

 

 

More Than 50% Said Never Informed of Option

 

About 20 percent of the respondents to the survey either had been injured or had a family member who was. Most of them — 86 percent — had chosen a lump sum. More than half of them did not know what a structured settlement was, and said their attorneys had not informed them of the option.

 

Sadly, the majority of those who had taken lump sums said the money was gone. That mirrors the findings of a survey conducted in 2013, in which people who took lump sums found they had less money than expected as time went by.

 

 

Survey 2: Wished Had Taken At Least Some In A Structured Settlement

 

The second study involved 400 injured workers who had received settlements of at least $100,000 within the prior 10 years. It was produced by Prudential Global Strategic Research in conjunction with Prudential Structured Settlements. The sponsors wanted to know why someone would choose either payout option.

 

 

Lump Sum Chosen for Perceived Financial Independence & Pay Large Debts

 

The main reasons injured workers said they took a structured settlement were the tax advantages and a guaranteed rate of return, according to the Prudential study. Of those who said they were “very familiar” with the structured settlement option, 75 percent said they had considered it.

 

Those who opted for lump sums had done so largely because they hadn’t been informed about structured settlements. About 20 percent said the insurer had not offered a structure settlement as an option.

 

 

Financial Independence & Pay Off Debts Goal Most Likely To Regret Decision

 

Those who took the lump sums also said they did so to have financial independence and to pay of large debts. However, they were the most likely to regret their decision later and many said they wished they had taken at least some of it in a structured settlement.

 

The survey asked recipients of lump sum payments about their expectations regarding the money they had, within the first year of receiving the payment, 1 – 3 years after, 3 – 5 years after, and 5 – 10 years after getting the cash.

 

Within the first year, 35 percent said they had “much more than I expected,” and 5 percent said they had “must less than I expected.” But the figures were nearly reversed later. Among those who had received lump sums 5 – 10 year prior, just 6 percent said they had “much more than I expected,” while 25 percent had “much less than expected.”

 

 

Conclusion

 

Despite the belief by many that they can best manage a large sum of money, the reality is often different. Some spend money much more quickly than they envision; others make poor investment choices; while others discover that paying off large debts does not always result in financial independence.

 

Structured settlements are a compelling option for injured workers and others who want financial security throughout their lives. However, the lack of awareness and misconceptions lead too many people to choose lump sum payments, only to regret the decision later. It behooves all advisers of injured workers including attorneys, claims handlers, employers, and the population in general to understand the different payout choices and opt for the one that offers the best benefit.

 

 

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Case Study: Obtaining a Legal Zero MSA

There are many barriers to settling workers’ compensation cases that have placed a significant burden on all programs nationwide.  One such barrier is understanding the complexity of the Medicare Secondary Payer (MSP) Act and specifically the voluntary review and approval process for Workers Compensation Medicare Set-Asides (WCMSAs).

 

The stakes are significant in high exposure claims.  This is often the case in high-dollar cases where settlement requires a certain peace of mind by having an allocation reviewed and approved by CMS.  Issues of primary liability can factor into such claims when it comes to receiving a $0 allocation.  In many instances, it is essential to work with a dedicated service provider who knows and understands the components and documentation required to obtain a “Legal Zero MSA” approval.

 

 

Case Study (provided by Tower MSA Partners): Obtaining a Legal Zero MSA 

 

This case study considers the challenge and solution to obtaining CMS approval of a Legal Zero MSA on a completely denied case.

 

 

Challenge:

 

The employee, who is a Medicare beneficiary, allegedly suffered a left medial ankle and foot injury during his employment. At the time of the claimed injury, the claimant was an insulin-dependent diabetic.

 

  • The treating physician opined the injury as a contusion to the left ankle and toe with no evidence of fracture, and the workers’ compensation claim was denied.
  • During the course of post-injury medical care and treatment, the claimant’s uncontrolled diabetes resulted in a below knee amputation.
  • Following the amputation procedure, the claimant sought care from a new physician who concluded ‘in his professional opinion, there was a direct correlation between the traumatic injury he suffered and the below knee amputation’.
  • The workers’ compensation claim denial was affirmed, and $0 MSA was requested.
  • The total potential MSA exposure was $169,053 if the Legal Zero MSA was not approved.

 

 

Solution:

 

Obtaining review and approval of a $0 allocation provides certainty for all parties involved in the WCMSA review and approval process.

 

The solution in this case study required the MSA legal team to work with the defense attorney and client to prepare the Legal Zero MSA by providing evidence as follows:

 

  • The claim was denied in its entirety and in good faith.
  • No payments for medical or indemnity were made.
  • Medical records provided by Plaintiff’s counsel indicate treatment for a severe diabetic condition dating prior to the 06/25/2014 alleged injury.
  • Formal denial filed to the North Carolina Industrial Commission stating that the claim is denied as the medical records received thus far do not substantiate relationship of any injury on 06/25/2014 to his complaints.

 

 

Results:

 

In its review of the evidence provided by the legal team, CMS concurred with the evidence as proof of no liability and the Legal Zero MSA was approved in full by CMS.

 

Savings achieved in this case totaled $169,053

 

 

Conclusions:

 

The stakes are high when it comes to obtaining a $0 allocation during the voluntary WCMSA review and approval process.  Failing to work with an experienced MSP service provider who understands the process can result in delays, missed settlement opportunities and cases not settling, which will only add costs to your workers’ compensation program.

 

 

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Leverage Emotional Intelligence For Successful Claim Settlements

 “Today is a new day, the first day of the rest of your life.” Each of us has certainly heard this statement proclaimed sometime throughout our lives – in the classroom, office, on an athletic field or even possibly during a therapy session. For injured parties, facing the realities of today and the uncertainties of tomorrow are often more painful than the physical injuries themselves.

 

As professionals, this is a simple yet important concept to understand as it drives the value that comes with the use of emotional intelligence when posturing settlements.

 

 

Emotional Intelligence In Settlement Process

 

Emotional intelligence is an ability to recognize, understand, manage and influence one’s emotions and the emotions of others. In practical terms, it is a combination of these abilities along with the use of intuition and street smarts. Regardless of how one chooses to define the concept, incorporating the use of emotional intelligence is important given its value in the settlement process.

 

With all of the priority business demands inherent to managing claims, litigation and settling claims, even if one had the time to fully appreciate the value of applying emotional intelligence, how would one use this to generate better results? Most of us are too busy to even pause for a moment and think about this question. So, please, allow me a minute to offer a few simple thoughts.

 

Unlike most service providers who deliver products and services for the betterment of injured parties, structured settlement consultants are uniquely positioned. Oftentimes, structured settlement consultants are very engaged in the litigation process and meet the injured parties. These opportunities open the door for the use of emotional intelligence which is advantageous to all.

 

 

Settlement to Address Immediate and Future Needs

 

From an injured party perspective, structured settlement professionals address immediate and future needs and provide viable options to bridge the gap to settlement. As objective settlement advisors, they use emotional intelligence to customize creative settlement proposals designed to address the financial needs and uncertainties of tomorrow.

 

From a claims and litigation management perspective, both defense and plaintiff, structured settlement professionals maximize the benefits and value that comes with the settlement dollars paid and assist with achieving desired outcomes. The efforts of structured settlement professionals offer benefits to all parties involved in the settlement process.

 

 

“Color in the Quotes”

 

So, next time you engage a structured settlement consultant, look not at the color of the quotes but rather the “color in the quotes” – in part the product of their use of emotional intelligence.

 

“Engage a structured settlement professional, today.”

 

 

Author: Duke T. Wolpert, Ringler.  Duke is a Broker and Settlement Consultant (CSSC) who owns and operates Ringler Associates of Pennsylvania Inc.  After joining Ringler in 2012, Duke served as Sr. Vice President of National Marketing and was responsible for new business development, national account management, national marketing and corporate partnerships – as member executive management team of the organization. Contact: https://ringlerassociates.com/consultants/duke-wolpert/

 

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