NCCI Report Recap: How Professional Administration Factors In

NCCI Report Recap: How Professional Administration Factors Innew research brief on MSAs and Workers’ Compensation by the National Council on Compensation Insurance (NCCI) reveals significant opportunities to help injured parties, especially through use of support systems like a professional administrator.


The brief updates a previous report published in 2014. That document considered data on MSA submissions to the Centers for Medicare and Medicaid Services (CMS) between September 2009 and November 2013. The latest version also includes information from 2014 and 2015 submissions, based on 11,500 MSA submissions.


As Medicare is a secondary payer for work-related injuries, insurance carriers must protect Medicare’s interests when settling claims. Many insurers create MSA funds to help pay for injury-related costs that Medicare might otherwise pay. There is no legal requirement to submit a proposed MSA to CMS; however many insurers choose to do so. Once the CMS-approved set-aside amount is spent and properly accounted for to CMS, Medicare will pay for future covered expenses.


Findings and Discussion


  • “The largest share of MSAs are submitted about four years after the injury. The number of submissions gradually decreases after that, but it is not uncommon to have a submission 20 or 25 years from the accident.”


The amount of the MSA increases with each passing year. As NCCI’s report notes, in the first year, the average amount of an approved MSA is $53,213; by year 5, that has increased to $105,430; and by year 20, it is $168,469.  Clearly, it makes sense for payers to settle claims as soon as possible. It also benefits the injured party, who is in a better position to move on with his life and not dwell in a disability mindset.


  • “Almost 95% of submissions are for claimants who are Medicare-eligible.”
  • “Almost all MSA settlements are self-administered. Larger MSAs are more likely to be professionally administered than smaller MSAs.”


In fact, only 2 percent of MSAs are handled by professional administrators. This is discouraging, as that means 98 percent of injured parties with MSAs are themselves responsible for complying with all the Medicare requirements, including:­


  1. Maintain line item detail for the duration of eligibility
  2. Use the fund only for Medicare covered expenses
  3. Pay according to the appropriate fee schedule
  4. Prepare and submit annual accounting report to CMS
  5. Deposit the fund into an interest-bearing account
  6. Use the fund only for treatments related to the injury


Failing to comply with all six requirements puts the injured party at risk of being denied benefits by Medicare.


In addition to compliance, having a professional administrator involved can also extend the life of the MSA fund. Savings on provider bills, durable medical equipment, medical treatment, and prescriptions are only available to injured parties who have a professional administrator involved with their post-settlement scenario.


  • “While many MSAs have been approved by CMS as submitted, CMS often requires that the MSA be increased.” In fact, the gap between the average amount submitted for an MSA and the amount approved by CMS increased slightly from 2013 to 2015.
  • 2013 — Submitted amount: $101,260; approved amount: $111,793 – a difference of $10, 533.
  • 2015 — Submitted amount: $88,911; approved amount: $103,288 – a difference of $14,377.


Much of the increase in this gap is due to prescription medications.


  • “Overall, drugs are about half of MSA amounts, but for more than one-third of MSAs, drugs are less than 10 percent of the MSA value.”


Working with a professional administrator can entitle injured parties to significant discounts on medical costs. Injured parties who are shown the cost differences through a professional administrator compared to the retail prices they would otherwise pay are often pleasantly surprised to see how much they can save.


  • “More than half of MSA claimants seek claimant attorney assistance when establishing MSA arrangements”


54 percent of MSAs involve an attorney, while the remaining 46 percent do not.


Injured parties leery of settling their claims often feel overwhelmed by the various requirements for compliance, as well as the fear of managing their money so they don’t run out too soon. Professional administrators can help guide injured parties (and all involved parties) through the settlement maze, and stay with them after settlement.




Author Leah Fusco, Chief of Staff, Ametros. Leah manages all of Ametros’ clients and partners, manages and supports the sales team, analyzes trends, and provides reporting and analytics. She brings over a decade of claims, settlement consultation and account management experience to Ametros. Prior to joining Ametros, Leah was a manager within the Medicare Compliance Department at Sedgwick, a leading third-party claims administrator. Before working with Sedgwick, she worked in Claims Management at PRM Claim Services, and Triad Group. Leah obtained her A.A. in Humanities and Social Sciences from Schenectady County College, and her B.S in Business Management from The Sage Colleges. She is CMSP certified, and is also a licensed New York Independent Adjuster, and a licensed life broker. Leah is an officer of the Albany Claims Association. She currently resides in Albany, New York with her husband and son.

The Path to Engaging a Structured Settlement Consultant

The Path to Engaging a Structured Settlement ConsultantLegacy claims that have been sitting on the books for months, years or even decades can add up to major headaches and expenditures for workers’ compensation payers. Despite all attempts to close them, the injured worker involved just doesn’t seem to be interested in settling the claim.


The good news is, there are organizations solely committed to bringing even some of the most difficult cases to settlement and creating a true win-win for all stakeholders involved – including the injured worker.


Structured settlements are an alternative to lump sum settlements, which often fail to take care of the injured workers’ needs long term. Structured settlements can be set up to deliver varying amounts of money over the injured worker’s lifetime which can address all his current and future needs, such as:


  • Medical expenses
  • Living costs
  • Children’s education
  • Special needs trusts
  • Establishing a business
  • Home modifications


Working with an experienced, highly professional structured settlement consultant can be a lifesaver, for the injured worker, his family, employer and the payer.



Why Claims Don’t Settle


Structured settlement consultants specialize in settling claims. Typically the most difficult challenge in settling claims is addressing the injured workers’ concerns:


  • Concerned there will be no money
  • Not wanting to deal with Medicare compliance issues
  • Worried about losing support to navigate the medical system
  • Uneasy about the red tape involved in paying medical bills
  • Afraid of change


The emotional concerns of injured workers with legacy claims are just as, or even more important than the practical concerns, such as running out of money too soon. While injured workers may abhor dealing with the workers’ compensation system, they find some comfort in knowing they will get a consistent flow of money and that they have someone, the claims adjuster, who helps steer them in the right direction.


Part of the problem with trying to close these claims is that the injured worker has not had anyone fully explain the options available in settling. The claims adjuster may ask every few months whether the injured worker is interested in settling, but that person is not in the best position to develop a settlement plan. This process requires someone getting involved with the injured worker; understanding his particular needs, his family situation, and what he wants for the future. Engaging with an injured worker this way can reveal his true needs and concerns, which can lay the groundwork for a settlement.



Why a Structured Settlement Consultant


Structured settlement consultants don’t get paid unless and until the claim settles. Therefore, they work with all parties involved, rather than promoting one side or entity over another. For claims to settle, everyone involved must agree it is a win-win arrangement.


Your consultant knows that the easiest way to achieve a solution is by ensuring that all needs are addressed. Working under the premise that there is no one-size-fits-all, or cookie-cutter approach to settlements, the consultant creates a customized plan that takes into account any and all issues that may arise over a person’s lifetime. Using the flexibility of a structure allows for addressing these issues, but a good consultant will present a variety of solutions, sometimes even going beyond the structured settlement.


For example, the settlement might involve a large initial payout for the injured worker to pay off medical bills, attorney fees, liens, and other bills. It might then have an ongoing stream of specified monthly payments, and it might include a larger stream of payments designated for a certain time period if, for example, a child will reach college age and needs money for education.



Engaging a Structured Settlement Consultant


Often, a settlement consultant can help by finding a block of claims with high reserves that seem to be going nowhere. Providing the name of the case, the adjuster, the claims liaison, attorneys, employer, TPA and a brief synopsis to the structured settlement consultant starts the ball rolling. With permission, the consultant can reach out to the various parties, gather information and report back as to which claims make sense for settling, as well as which cases do not and why.


The best and most efficient time to engage a settlement consultant is as early as possible, rather than waiting until the 11th hour when the claim has been open for 22 years. As new cases come up, they too can be earmarked for possible settling.



Best Claims for Settling


Despite all the advantages of structured settlements, not all claims are ripe for them. Identifying these cases can be difficult to manage, thus it’s important to choose a consultant who understands both structured settlements as well as other settlement options, and which are most preferable for the case at hand.


Ultimately, choosing a company that employs objective Settlement Planners over Structured Settlement Brokers can be the best route. Settlement Planners are trained to offer a variety of solutions, rather than a single approach. However, whether you choose a Settlement Planner or a Structured Settlement Broker, these consultants are trained to think outside the box and are much more likely to bring legacy claims to settlement.






Structured settlement consultants are a great vehicle for getting long-term workers’ compensation claims off the books. By giving them minimal information on claims, they do the legwork and determine whether a claim is likely to be settled. They then go about getting a settlement agreement that meets the needs of all stakeholders.




Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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.



Workers’ Comp Roundup Blog:


©2018 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.

CRC Contractor Change Brings New Team to Medicare Conditional Payment Recovery Efforts

On Thursday, January 18, 2018, the Centers for Medicare and Medicaid Services (CMS) held a webinar to introduce the new Commercial Repayment Center (CRC) contractor, Performant Recovery, and Performant’s management team. This transition to a new contractor is important to insurers and employers as the CRC is responsible for recovery of Medicare conditional payments against these entities stemming from liability, workers’ compensation and no-fault claims where ongoing responsibility for medicals has been accepted.


Ted Doyle, the Performant MSP CRC Project Director, emphasized in his introductory remarks and throughout the presentation that their main goal is to make the transition seamless for all those who engage with the CRC. His message to stakeholders is CMS’s recovery processes and timeframes remain the same, it is only the entity handling those processes that is changing.


Besides Mr. Doyle, other webinar participants were John Albert, the Director of the CMS Division of Medicare Benefit Coordination and Laura Martinez, the MSP CRC NGHP Recovery Manager for Performant.


Key contractor transition information provided during the webinar was as follows:


  • The current CRC contractor, CGI Federal, will cease operations effective Friday, February 9, 2018.
  • Performant Recovery will commence CRC operations effective Monday, February 12, 2018.
  • Transition cutover, or what CMS calls “Dark Days,” will occur on February 8 and 9. During this period while CGI Federal will continue to answer telephone calls and the Medicare Secondary Payer Recovery Portal (MSPRP) will be available, the information will be limited to what was available at close of business on February 7. Also, uploading documents through the MSPRP will not be available.
  • Performant will go live as of 8am EST on February 12 at which point the MSPRP will once again be fully available as well as the call center. Correspondence received during the Dark Days or prior to the transition will be transferred to Performant for handling.


In regard to what will remain the same post-transition:


  • All current cases initiated by CGI will be transitioned to Performant.
  • Case information, copies of communication, correspondence and contact information, including letters of authority, will be fully accessible to Performant such that there should be no reason for stakeholders to resend correspondence or other information that was previously provided to CGI.
  • There will be no changes to CMS established recovery processes or timeframes applicable to MSP recovery.
  • The CRC Call Center will continue the same hours: 8am – 8pm EST
  • The CRC Call Center phone number will remain the same: (855) 798-2627
  • All Benefits Coordination and Recovery Center (BCRC) processes remain the same, including Section 111 Mandatory Insurer Reporting.


As for what is changing post-transition:

  • Effective 2/12/2018* the CRC has a new address:Medicare Commercial Repayment Center – NGHP ORM
    P.O. Box 269003
    Oklahoma City, OK 73216*Any correspondence received prior to 2/12/2018 will be held and then processed starting on that date.
  • Effective 2/12/2018 the CRC fax number is (844) 315-7627.


As with any transition, some bumps are to be expected. We are hopeful these will be short-term and that the transition will not only be seamless, but that Performant improves the customer service aspect of the Medicare conditional payment recovery process. CMS and Performant engaging with Tower MSA and other stakeholders through this webinar is a good first step at building a collaborative relationship with those impacted by the CRC’s recovery efforts.


It was indicated a copy of the presentation slides will be made available on the downloads section of the CMS Coordination of Benefits and Recovery website next week.



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

8 Questions from Attorneys about Medicare Set Aside Administration

8 Questions from Attorneys about Medicare Set Aside Administration1.  “What is my risk if my client makes mistakes with their MSA?”



2. “What’s the chance that Medicare denies my client’s care because they misused or misreported their Medicare Set Aside funds?



3. “Why can’t my client just find coverage through another private insurance plan?”


Determining the best approach to address MSAs with their client in the settlement process can be a challenge for many plaintiff attorneys. The questions above are common amongst plaintiff attorneys who struggle to provide comprehensive advice to their clients regarding the regulations and ramifications of the Medicare Secondary Payer statute (“MSP”).


There are still quite a few attorneys in the workers’ compensation and liability industries that try to find ways to avoid the need for a Medicare Set-Aside (“MSA”) altogether when their clients settle their claims. It is understandable; the MSP regulations are complex, and the guidelines from the Centers for Medicare and Medicaid Services (“CMS” or “Medicare”) restrict how their clients can use the settlement funds – which their clients do not like at all. In addition, most jurisdictions preclude attorneys from taking contingency fees on medical funds allocated for Medicare purposes.


These factors, among others, can lead attorneys to shy away from addressing MSP issues head-on with their clients and instead, consider risky approaches that may put them in danger of committing a malpractice claim. This article, in consultation with a number of the nation’s prominent plaintiff attorneys, addresses the less obvious aspects of MSP compliance and the common questions attorneys have, as well as how attorneys can best protect themselves and their clients as they address these issues.



Protect Your Client’s Benefits


4. “Will Medicare really deny my client’s benefits?”



5. “Show me a case where Medicare benefits were ever denied, or Medicare came after the client or attorney for misappropriated MSA funds?”


Denials of treatment from CMS after settlement occur daily. The Medicare Administrative Contractors in charge of approving all Medicare claims have systems in place to automatically deny injury-related treatments for individuals that have MSAs accounts with remaining funds. The Contractors are closely monitoring MSA account recipients using the Mandatory Insurance Reporting Section 111 data they receive from insurance carriers for every single settlement that involves a Medicare beneficiary. They match this data with the injured party’s MSA reporting to verify if the MSA has funding to pay, or if Medicare should accept payment.


Generally, very few of the MSA accounts managed by professional administration exhaust, when that occurs, the administrator should automatically notify Medicare of the account’s exhaustion. We are often contacted by Medicare to review the treatments that were paid and to determine exactly when the funds were exhausted. In most cases, Medicare requires receipt of this information before they begin providing coverage for any injury-related bills. There can be a number of unique issues that arise after settlement, such as conditional payments, denials, etc., that require specialized attention to be resolved.


There are no known litigated cases against Medicare for cutting off benefits due to misuse of MSA funds; however, that does not mean that denials of care are not routinely taking place. The ability to deny care and remain the secondary payer is the fundamental right that Medicare established in the federal MSP statute. Most industry experts have seen Medicare increase its commitment to monitoring MSA accounts over the past several years and expect that will continue into the future. In addition to workers compensation cases, Medicare has indicated that it plans to also institute a review process for liability cases as well; it’s a clear sign that, if anything, Medicare is paying closer attention to all settlements.



Facts about MSAs:



The reference guides and memos provided by CMS have some authority, but the authority is not statutory. An attorney could follow all the guidance provided by CMS, yet still, run some minimal risk of failing to address the regulations under the law. Nonetheless, the safest approach is to recognize and consider MSP laws in settlement proceedings which requires providing thorough client guidance and a qualified advocate, to help the client abide by the guidelines. By doing this, the attorney can show that they did everything possible to protect the client’s Medicare benefits thus avoiding any successful claim of malpractice.



Insurance Coverage Misconceptions


6. “ But can’t my clients find coverage through another private insurance plan after they settle?”



7. “What about the Affordable Care Act?”


There is a frequent misconception by attorneys that their clients can get insurance coverage elsewhere and thereby not have to worry about an MSA. Although sometimes the injured party may initially be able to get another entity to cover their injury, most of the time insurance carriers are including exemptions for care relating to settled claims. Using another plan may be a good near-term way to save some of the MSA funds, but it may result in confusion over the long-term and the client spending MSA funds to pay for the premiums and deductibles of these new plans which will put them out of compliance with Medicare’s guidelines.


Private insurance plans, whether they be Medicare Advantage, Affordable Care Act plans, or provided through an employer, only last for one year at a time. MSA funds are meant to be used properly for the client’s lifetime. If the injured party believes they can rely on a private plan to cover their injury costs, they may be more incentivized to use their MSA funds to pay for that plan or for other non-injury related costs. If the private plan they rely upon ceases to exist, increases premiums drastically, or starts to deny their injury-related claims, the client will have put themselves in a very compromised position. At that point, they will likely not have a record of what they did with their MSA funds which will result in Medicare denials if they exhaust their funds. At the heart of the matter, it is risky to assume that a private insurance plan will be in place and available to the injured party for 10, 15 or 20+ years after settlement.


Over the past several years, private insurance plans have become much more vigilant on MSP matters. Other insurance entities are becoming increasingly savvy regarding the fact that they should not be the primary payer for these work-related or personal injuries and are finding ways to avoid paying. Medicare is the ultimate backstop for an individual’s healthcare, so if the injured party has misused their MSA funds and can’t get coverage, there really is nothing left to assist them with their care. When the client has exhausted their funds and cannot find private coverage, they will likely make two calls: The first is to their attorney, the second is to a malpractice attorney.



What is My Responsibility?


8. “I advised them of the risks, what else am I supposed to do?”


For attorneys that recognize the importance of having their clients thoroughly advised and aware of MSP guidelines, they are off to a good start. Many attorneys give their client an overview of the MSA’s purpose, but struggle to determine how they can truly protect themselves and their client once they hand their client what can be a sizable amount of money.


Medicare does allow for self-administration of MSA’s, but there’s good reason that Medicare recently came out and “highly recommended” professional administration (See Section 17 of Medicare’s updated reference guide).


Going through self-administration alone has often proven to be too much of a burden and challenge for the injured party. Medicare seems to have realized that its 31-page Self-Administration Toolkit is just too complicated for the average individual to follow. Attorneys need to consider whether their client understands what is happening and must determine whether they can realistically handle what is being asked of them for the rest of their lives. Or as Medicare puts it: will they be a “competent administrator?” Providing a professional administrator to help the client with administration of the MSA funds not only shows good faith to abide by Medicare’s recommendation, but it also helps the injured party save money on their medical care, remain compliant and have a resource to rely upon so that they are not continually reaching out to the attorney after settlement.



Get Professional Administration Involved


As with all decisions, attorneys should consider what approach sets both their clients and themselves up for success and the most defensible case if there are complications down the road. Taking a little extra time to get a professional administrator involved to explain what the MSA is and to set up administration will save the attorney potential exposure on a number of issues. Also, one should not forget, typically carriers are offering to pay for the administration service, so it is no extra cost to the attorney or the injured party.


Plaintiff attorneys take enough risks managing and growing their businesses and fighting for their client’s rights; there is no need to add to those challenges by risking any potential issues with Medicare.


If you have questions about MSA compliance and administration, don’t hesitate to reach out to our team of experts.




Porter Leslie is the President of Ametros. Porter has a passion for directing the growth strategy of Ametros and working with its many partners and clients.  He built his career leading customer-focused businesses in the healthcare and financial services industries. Prior to Ametros, Porter worked in investment banking, private equity and corporate development.


Porter earned a B.A. in Economics from Columbia University, as well as an MBA from the Wharton School and an M.A. from the Lauder Institute at the University of Pennsylvania. Porter is fluent in Spanish and Portuguese and resides in Boston with his wife, Ruth, and son, Camilo. Contact:


The Christina Grillo Case and Lessons Learned: Why Families Facing a Medical Malpractice Lawsuit need a Structured Settlement

The Christina Grillo Case and Lessons Learned: Why Families Facing a Medical Malpractice Lawsuit need a Structured Settlement






Speaker 1: This is Ringler Radio, where you get all the latest news and information about settlement solutions, litigation, mediation, and structured financial security from Ringler, the largest and most experienced company of settlement consults in the United States.


Ringler has been helping injured people and their families since 1975. Ringler Radio is made possible in part by American General, Liberty Mutual, MetLife, Mutual of Omaha, New York Life, Pacific Life, and Prudential.


Now, join Ringler Radio host, Larry Cohen.


Larry Cohen: Hello, and welcome to Ringler Radio, everyone. I’m Larry Cohen, the head of Ringler Northeast Operations, and we’re certainly glad you could join us again today.


Well, Christina Grillo Sullivan was born on January 9, 1982. In what should have been a normal delivery for her mother, Josephine, turned into an emergency C-section, leaving Christina severely brain damaged, resulting in cerebral palsy, seizures, and blindness.


Soon after, Christina’s family filed a medical malpractice lawsuit, citing negligence by her physician. But Life Care Plans estimated the lifetime cost of medical care for little Christina to have been an excess of $20 million. The defendant’s attorneys offered a structured settlement, costing $1,267,000 that would have, over the lifetime of the child, paid out well over $100 million dollars. Quite a tax-free ability for Christina to be taken care of.


But Christina’s lawyers rejected the structured settlement offer, and settled the case for a lump-sum cash payment of $2.5 million, from which they took a $1 million fee and $77,000 in expenses.


They also failed to protect the availability of governmental benefits and sadly, as we’ve seen so often before, the money, unfortunately, was gone within a few years, and the family left to pick up the pieces and pay millions for medical treatment.


Christina’s family nurtured and cared for her relentlessly and lovingly at home for 32 years until she passed away on September 17, 2014. Today on Ringler Radio, Christina’s mother, Josephine Grillo Sullivan, now the executive director of the Christina Grillo Sullivan Foundation, will share with us how she’s honoring Christina’s life by assisting families living with a brain-injured loved one.


We’ll also discuss the high-profile and precedent setting case of Grillo Vs ] and what its outcome has meant for others who are faced with a choice, at settlement, of taking cash or structure.


Joining me today in this discussion as my cohost is my Ringler colleague Anne Lawter, from the Troy, Michigan office. Anne has nearly two decades of experience in medical malpractice and personal injury litigation.So with that, welcome to the show Anne. Thanks for being my cohost.


Anne Lawter: I’m very happy to be here with you and Josephine today.


Larry Cohen: Thank you.


Josephine, welcome to the show. It’s a pleasure and an honor to have you here. We’re really looking forward to hearing what you have to say, today, about your daughter and about what’s transpired with your foundation.


Josephine G. S.: Thank you for having me. I really look forward to being your guest, with Anne, and your listeners.


Larry Cohen: Terrific.


Josephine, let’s begin by having you tell us a little bit about Christina and the impact she had on you and your family. She seems like an unbelievably fascinating and wonderful girl.


Josephine G. S.: Well, how long do you have Larry and Anne?


Larry Cohen: (laughs)


You take as long as you want. I’ll stop you when it’s time. Go ahead.


Josephine G. S.: She was an absolute angel here on earth. I visually see her laughing and smiling. They were absolutely contagious, and that’s without ever speaking a word. She just inspired so many people around her. It’s where we are today.


It didn’t matter that she didn’t speak a word. She taught us so much, truly: what was important in life, which is unconditional love. I guess she really gifted us with her innocent trust and her dependency upon us.


I’ll tell you what, Larry: she really, really taught us how very, very precious this life is, and not to take one moment for granted. I just can go on and on about her, but she truly taught us about hope and faith and that’s truly what’s gotten me this far in this moment in life.


Larry Cohen: She was a blessing. For your family to have nurtured her as you did is wonderful to see and you to be commended for that too.


Anne Lawter: Josephine, I understand that Christina’s birth is what led to a medical malpractice case. Is that correct?


Josephine G. S.: That is correct.


Anne Lawter: If you could, just give us an overview of the main portions of the case.


Josephine G. S.: It was an evening that I had arrived at the hospital and the nurse on duty wanted to send me home. As I recall, she was saying I was having Braxton Hicks which is false labor pains. The doctor was asleep down the hall but the nurse didn’t want to disturb him. And that was until Christina’s heart rate started to drop. And then the last thing I remember there was that my body was going into shock and jumping up and down on the gurney. Then I had awoken to two nurses talking an saying that my precious baby wasn’t going to survive the night. It had taken over seven minutes to resuscitate here.


So I guess three weeks in the hospital neonatal unit, the doctor came up to me and said that they had done all that they could and that they were terminating life support. They were going to administer Christina last rites, and I’m sitting here thinking back as I do from time to time … There was a room off the neonatal unit and we were put in there, my family and I. We were all to say goodbye, and gently passing her from one loving family member to the other and we were just kissing her soft little newborn face.


But she surprised us all. She started breathing on her own and obviously was left here to do all the things that she has done for so many. We actually lived in Fort Worth at the time, in Arlington, and I had heard about a case, an attorney, and had gone to see him in Houston. He said if the baby was still alive to take the case. They had came back and said that the nurse was credible and the hospital had made an offer of $50,000 and they suggested that I take it.


Looking at both of them I just said there was just no way I could care for Christina over her lifetime. Two weeks later I get a phone call and they told me to come pick up my papers, that they were withdrawing from the case.


So that’s when I had located new counsel which was Tom and Tommy and they too delayed about two years until the hospital saw the motion to dismiss and then at that they prepared the case for trial.


Larry Cohen: You know Josephine, through this trauma of the injury to your daughter and through the birth etc., finally you received an offer from the defendants’ attorney which included a tax-free structured settlement as a part of it and yet your own attorney rejected that offer and decided to go with a lump sum settlement. Of course that decision had some severe consequences as you moved down the road. Tell us about the impact of that decision on your family as you moved along. What was the impact?


Josephine G. S.: To clarify to your listeners, the attorney decision to go with that lump sum settlement, it was so insufficient to cover her basic medical needs, but also was not conveyed in writing, nor did I have a clue what a structured settlement was or the benefit of the weighted age as I do today. That $1,267,579 was with a Cost of Living Increase (COLA) of 7.2%.


Larry Cohen: Wow.


Josephine G. S.: Yeah. That’s the looming increase. It would have paid Christina in excess of $200 million-


Larry Cohen: Yeah, with that kind of a COLA it’s amazing.


Josephine G. S.: And today, of course we all know how devastating that was not to have done that. The attorney’s fees would have been based on the cost of the structure, not the gross amount received, so actually Larry 40% of $2.5 is double the attorney fees. I guess that was their answer.


Larry Cohen: Wow. Wow. Am I right in that you were never given the opportunity to understand what a structure was? It was never really explained to you, is that right?


Josephine G. S.: No, not at all.


Larry Cohen: Wow.


Anne Lawter: So Josephine as I understand it, after that experience of taking that settlement, there came a time that you and your family had exhausted your funds and yourself and you instituted a malpractice case against the attorneys and that guardian ad litem for legal malpractice, regarding the fact that Christina’s case should have never been settled for a lump sum and the consequences that followed. Can you tell us about that?


Josephine G. S.: Yes I can. It was for the longest time, because we knew something was wrong, not until I spoke with an attorney named Todd who is in Dallas … He told me that he had never heard of a brain-damaged baby case not being settled with a structured settlement. Again, I had told him, “What does that mean?” And he kindly gave me the phone number of a structured settlement broker that has now become my friend over the past 25 years and that’s Mr. Neil Johnson.


I can remember meeting with Neil in an Italian restaurant over in Dallas and over two hours he explained in detail what a structured settlement was and the benefit of a rated age and what that would have meant to the value of Christina’s settlement. Larry and Anne, I left that meeting in tears. I wasn’t angry, I was just saddened that someone could do something so unconscionable.


I had filed a cause of action [inaudible 00:11:50] because I was unable to find counsel that would represent Christina because everyone that I had spoken to was fearful of retribution with judges and other attorneys in the future. So the two-year statute of limitations was tolling so I filed a lawsuit.


The odd thing is Neil, he believed in us and researched and found one of the companies that actually has quoted a structured settlement in the underlying case. So I actually went to go and deposition John [Camp 00:12:26]. He was a defense attorney for the hospital. When I was asking him the question, “Was Christina ever offered a structured settlement?” And Larry and Anne, just sitting there and looking across at this attorney for the hospital … He just snapped his pencil in half like it was a twig and he looked me in the eye and said, “As I sit here today, I do not recall.”


I was just-


Larry Cohen: Yeah, sounds like he knew the bad news was coming. It’s interesting.


Josephine G. S.: Right, right.


Larry Cohen: You know Josephine, what’s resulted from your fight against your attorneys for doing what they did is given rise to what’s now commonly called the Grillo waiver. It’s a document that acknowledges in writing that the plaintiff understands the potential consequences of accepting a lump sum settlement in lieu of a portion of it being structured. I kind of think it’s akin to informed consent, where you really understand what you’re turning down if you want to turn it down, or what you’re getting if you decide to accept it. That seems so logical today but obviously wasn’t back there when you were in need of something like that. It’s through your situation that people in the future are not going to have to suffer through that circumstance like you did. At least something came out of that that hopefully will help others.


Josephine G. S.: And I sit here and I smile. I smile that her little life was for a reason and it was to help so many actually become better loved and taken care of by their families. Because, Larry and Anne, a family taking care of someone like Christina, it is so tolling on everyone. If the funds would have been there … You think about it, just momentarily, that life could have been different, but actually when you do think about it a little bit more it’s where it needed to be. Because if we had not have experienced that  we wouldn’t be here today and she would not have already started to help thousands of people.


Larry Cohen: Your story’s a humbling one, it really is, for all of us, to have gone through what you did and taking care of Christina for those many years. It’s as I say, a humbling story.


We’re going to take a quick break right now, and we’ll be right back in a minute right here on Ringler Radio with more with Josephine Grillo Sullivan. We’ll be right back.


Speaker 1: This is Ringler Radio, brought to you from Ringler, the nation’s leading provider of fair settlement solutions. Did you know that Ringler is involved in a third of all structured settlement cases in the country? Ringler advisors work with all the parties in a lawsuit settlement to find the best possible financial solution for the people involved. Everybody wins. There’s a Ringler consultant in all the major cities in the US. No one had more experienced experts in the settlement business than Ringler. Check out our website at for the best information for injured parties, attorneys, and claims professionals to find the Ringler advisor nearest you.


When it’s your interest at stake in a lawsuit settlement, you want only the best, most objective financial plan. You can count on Ringler advisors to create customized plan that meets the financial needs of you and your family for the future. Visit to learn more.


Larry Cohen: Welcome back to Ringler Radio. Glad you could join us. I’m joined today by my co-host Anne Lawter and our special guest, Josephine Grillo Sullivan, executive director the Christina Grillo Sullivan Foundation. Josephine, you and your family, your husband Craig and your son Christian, have devoted your lives to the memory of Christina in many ways. Of course one of them is the mission to influence legislation to encourage structured settlements. You even set a precedent with the second court of appeals case opinion holding guardian at litems accountable for breaching their fiduciary duty.


Talk to us a little bit about how you’re looking to change the law when it comes to structures versus lump sum payments when people have to make that pretty momentous decision.


Josephine G. S.: That process actually had been started by the passage of Senate Bill 731 in 1999. For three legislative sessions, that’s six years, we fought for that legislation that would make it mandatory for a structured settlement to be presented in writing when it involved a minor child or a non-competent adult. That was in a 76 Texas legislative session. It was passed and codified into Texas Section 139.001-5. Larry, I believe that probate courts truly, truly have too much power without accountability. I actually have proposed a five-member oversight panel when it comes to the health, safety, and wellbeing, consisting of a physician, a lawyer, two citizens, and legislative member because the abuse of the probate system has been well-documented and persons are being stripped over their rights with limited recourse.


Larry Cohen: Well I know who to nominate as one of the citizen members of that commission. (laughter) That’s for sure.


Josephine G. S.:  


Anne Lawter: That sounds like a great idea, Larry. Josephine, you had an opportunity to be right there with the legislature and give testimony. You and Christina both testified at the time that the law was being discussed. Can you tell us about that experience and how it affected you to be able to take Christina with you to talk to the legislators?


Josephine G. S.: I guess it was just one of the many times she was by my side, again for the six years we traveled back and forth to Austin and other hearings across the state of Texas. To describe it, she was instrumental in I think them actually listening and seeing because when you have someone that is severely brain-damaged, it actually … You’re creating an awareness. I don’t think people can really completely understand until they walk or see your shoes, just for a bit. So it was very important and the response was what was needed, when she was traveling with me.


Larry Cohen: Christina’s memory also takes shape, Josephine, in the form of your foundation’s work to support families with brain injured loved ones. I know we all want to hear about that, and also tell us about the Life Care Resource Guide. These are pretty inspirational things you’re doing.


Josephine G. S.: Well the Life Care Resource Guide actually takes into account the medical diagnosis of an individual. What we do as a foundation, because the stress of family helping to support that person … We actually help them because it’s so daunting. We have volunteer nurses, therapists, and they actually go in and look for the resources around their demographic area and that’s how we create their life care plan. The therapies, the equipment, do you need dealers, doctors, hospitals, day-habs? It’s just whatever is needed for that family to be able to take care of their loved ones.


Larry Cohen: That’s interesting, Josephine. That’s tremendous work you’re doing for the brain injured families. I’m sure they appreciate everything that your foundation and the Life Care Resource Guide can provide for them.


On your foundation’s website, there’s an interesting yellow butterfly which we’ve learned has some special significance, but I’m not sure what that is. So talk to us about Christina and the significance of the yellow butterfly. What is that?


Josephine G. S.: Well Larry, they say that our Heavenly Father allows our loved ones that have gone to heaven to come through the veil. It started after Nina had gone to heaven. From time to time when we would be at the point of such unbearable grief, a yellow butterfly would come and appear. I guess the first time was at a football game, oddly enough, ’cause Nina went everywhere with us. She loved to cheer on her brother’s college team and to encourage him because he was so devastated after losing her. He was about to graduate from college. So we went to the football game, trying to make it as normal as possible and went and even stood in the handicapped section where she used to stand, where we rolled her up in her wheelchair. And here comes this yellow butterfly, and I started crying.


I guess to me it was a symbol that maybe she was saying, “I’m okay. I’m here.” And it had landed on the railing where her wheelchair used to sit. There was a lady standing next to me and she hugged me and I explained to her. If you can imagine … Of course a football stadium’s all concrete. It’s not like there’s trees or anything around that a butterfly would show up. But there again, here comes another football game and here comes this yellow butterfly landing on the same spot. So to me it was more Christina saying, “You know Mom, I’m okay. I’ll always be here with you.” And it just to this today really means a lot.


Larry Cohen: Oh, no question. It gives you goosebumps, that story. It’s really amazing. And you know you hear stories like that, and I think it all comes down to having faith that things are a little bit better up there. I think that’s what she is telling you. That’s a very interesting and heartfelt story.


Josephine G. S.: I really would love to share with your listeners, the one day … Because there is an angel that the butterfly is in the wing of the logo … I was running on the beach one day … I’m a runner. And I just couldn’t bear to see Craig crying over the loss of Nina and when I got back in the car, just shut the door and was yelling at the top of my lungs. And it’s so out of nature for me to do that, but I guess grief took over. Asking her where she was … That day we were actually donating one of her wheelchairs. So we had gotten back in the car and drove back home and got the wheelchair out and was putting it in the car of a lady that actually has helped us for many years. She started crying and then I started crying uncontrollably, and then there goes Craig.


Then all of a sudden she says you know, “Look up.” And I would invite your listeners to go to the website. It was the shape of an angel cloud. There wasn’t another cloud in the sky. It was absolutely breathtakingly beautiful. There again, it was another sign that … “You know Mom, you’re on the right track. We’re doing okay, and keep going.”


Larry Cohen: It’s amazing stories.


Anne Lawter: Yes, Josephine. The perseverance that you and your family have shown in carrying on Christina’s legacy is amazing and the work that you’re doing to help other families that take care of brain injury victims is just amazing. Can you tell us how if someone wanted to get involved with the foundation and volunteer, how they could do that?


Josephine G. S.: I surely can. I just wanted to say one more thing in regards to her logo. Her loving brother Christian actually did those strokes of love on his tablet and created that logo. I wish I had more time to tell you about Christian, because what an amazing young man and what an amazing brother he was to her and still is.


Larry Cohen: Well you know they have an amazing mother too, don’t forget that.


Josephine G. S.: Thank you. And in regards to, Anne, thanking you for how people can assist Christina’s foundation, the foundation that bears her name and the foundation that has helped so many not only changing the structured settlement industry but allowing structured settlement brokers to assist so many. If you could please go to her website, because the foundation is helping so many families and we just need their support, and through donations. It’s Because we’re a 501(c)(3) public charity, anything that you donate can and will be tax exempt as allowed by law. I guess not only as the executive director but as a mom who loved and cared for her daughter for so many years, almost 33 incredibly blessed years, this is the way that you can honor Christina. Become a Nina moment, and please go to her foundation and donate.


if you want to talk to me personally, I would love that. You can dial the 1-866-637-8392, that’s extension 21. And my email address is and I would love to hear from you. Again, Anne and Larry, I cannot thank you enough for allowing me to be a part of Ringler Radio and I just-


Larry Cohen: It’s our pleasure, believe me. This has been an inspirational show. It’s not just educational but inspirational and I think all of our audience would respond positively to that statement. Anne I know is someone that’s been in this industry, and we all deal every day with these issues of, “Are they gonna take a structure or are they gonna take a cash settlement?” We’ve seen the pain that comes from those who don’t really have the decision explained properly to them. I think what you’ve done Josephine, not just through your foundation helping others, but also through the toughness and the fight, having to file the pro se litigation even, that just shows the spirit you’ve had. You really helped a lot of people. I just want you to know that.


Josephine G. S.: The appeal case, as well, it was just-


Larry Cohen: Oh yeah, oh yeah. No question about it.


Anne Lawter: Josephine, having practiced as an attorney for almost two decades, I just cannot commend you enough for having the courage to be able to take something on yourself and having the courage to move forward with that or striving to make a difference in others’ lives as you have. My heart just bursts with joy in knowing what a major contribution you and Christina have made.


Josephine G. S.: Thank you so much. I will tell you, last night we had our second practice for the adaptive tennis program that we just started with the Special Olympics. At the end, because those children are so intellectually and physically disabled, at the end when you’ve got the smiles and the success and their parents are cheering them on, even if it’s just to hit a ball one time with the tennis racket, it just enlightens your heart. At the end when they took the picture, and the reason I’m saying this, is I had gotten everyone in the stands. We all got together and it was like one, two, three, and then everyone said, “Nina!”


Larry Cohen: Oh wow.


Josephine G. S.: The picture was taken and it was absolutely beautiful. So I will end on that note-


Larry Cohen: No question, no question. That’s terrific. Terrific way to end it. And I just want to say again, Josephine, tremendous having you here and I’m glad you gave out all the information to how to reach you and the foundation. Anne, if someone wanted to reach you, how would they do that?


Anne Lawter: They can reach me in the Ringler office in Troy at 248-457-1212 or at


Larry Cohen: Terrific. All of you out there, you can reach any Ringler associate. You can find them, you can even look at their pictures if you want, by going to the Ringler website, On that website you’re going to find tremendous amount of information, helpful information, the kind of explanatory information that we only hope that at one point back in the day that Josephine might have had.


Josephine, you’ve been an inspiration to us. If you want to hear any of the Ringler Radio shows,,,, or an iTunes where you can download the show and listen at your leisure and hopefully be inspired by Josephine as we all were today.


So with that I want to say thank you Josephine for being a tremendous guest and inspiring all of us. And as I said before, humbling all of us too at the same time. Thank you very much for being here.


Josephine G. S.: Thank you both and many blessings to you both as well.


Larry Cohen: Thank you. And Anne, thanks for being a great co-host.


Anne Lawter: Yes, thank you Larry and thank you Josephine.


Larry Cohen: And for the rest of you out there, be inspired and go have a great day. Bye-bye.


Speaker 1: The views expressed by the participants of this program are their own and do not represent the views of, nor are they endorsed by, Legal Talk Network, its offices, directors, employee, agents, representatives, shareholders, and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.


Thanks for listening to Ringler Radio, celebrating more than a decade of podcasting, and over two million listeners. Think of Ringler, the objective settlement advisors with more than 140 consultants in 60 cities nationwide. Visit today.



Effective ERISA Recovery in Workers’ Comp Settlements

Effective ERISA Recovery in Workers’ Comp SettlementsMembers of the claims management team and workers’ compensation defense attorneys need to understand a number of issues to be effective.  In the area of resolving liens from workers’ compensation claims, it is important to recognize the complex issues associated with ERISA liens.  Failure to do so can result in added time handling a claim, as well as additional and unnecessary expenses.



What is ERISA?


The Employee Retirement Income Security Act (ERISA) was passed into law by Congress in 1974.  ERISA is codified in part at 29 U.S.C. §18, et seq., and establishes minimum standards for pension plans and other employee benefit plans.


ERISA claims arise when an employer-sponsored group health plans (GHP) provided by a private medical insurance company under the law pay for medical care and treatment arising from a workers’ compensation claims.  Given the unique nature of a qualifying ERISA plan, their ability to recover is defined by federal law and contractual language – not by state laws that would otherwise be applicable.



Determine ERISA Application


As a general rule, ERISA only applies to Plans created under the Act and “self-funded” by an employer who assumes the financial risk for providing health care benefits to its beneficiaries.  Generally, ERISA does not cover plans established for government agencies, churches or plans used to comply with state workers’ compensation laws, unemployment or disability matters.


The unique nature of ERISA Plans places additional burdens on parties to workers’ compensation claims.  The result is often an unwillingness of qualifying Plans to negotiate reduced settlements.  Due to the distinct nature of applicable Plans, federal law allows for them to bring a civil action to recover under 29 U.S.C. §1132(a)(3).




ERISA Plan Language: The Devil in the Details


All ERISA Plans have language explaining their rights of recovery in instances where medical benefits were paid on behalf of the claimant in a workers’ compensation and other personal injury claims.  Examples of Plan language with expansive recovery rights include the ability to be reimbursed “in full, and in first priority, for any medical expenses paid by the Plan relating to the injury or illness.”  In these instances, courts have largely ignored equitable arguments such as the “Made Whole Doctrine,” which limit recovery by an interested third party.  Due to the rejection of this and other defenses, ERISA Plans are allowed to recover first, and without the need to compromise.



Practice Pointers when Dealing with ERISA Plans


Federal pre-emption and judicially recognized contract interpretations often make it difficult for attorneys and members of the claims management team to resolve ERISA intervention interests.  Notwithstanding the special position of Plans, there are proactive steps one can take to resolve the claims effectively and efficiently:


  • Obtain a copy of the Plan contact and reimbursement language. Sometimes a Plan’s right to reimbursement may be favorable to quick resolution and not ironclad;


  • Present the facts of the case in a favorable light to your position. Each workers’ compensation claim is different and unique.  Although ERISA Plans have a “super lien,” they are often willing to take a reduced amount based on emotional appeals;


  • Keep the Plan administrator or their attorney posted on the status of a claim and include them on all procedural correspondence such as status conference and settlement negotiations; and


  • Although ERISA Plans may, in fact, have superior recovery rights, never be a jerk. Instead be respectful at all times.





The unique nature of ERISA often makes it difficult to settle a workers’ compensation claim.  Identifying the interests of the Plans is essential to deal with them productively.  There are also best practices one can implement to resolve claims and benefit the bottom line of a workers’ compensation program.



Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 .



Workers’ Comp Roundup Blog:


©2018 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.

CMS Statement on Opioids and WCMSAs Provides Little Clarity as to Future Review Practices

CMS Statement on Opioids and WCMSAs

In a recent post on its website, the Centers for Medicare and Medicaid Services (CMS) acknowledged the opioid crisis in this country, but provided little clarity as to how it intends to address this crisis in its review and approval of Workers’ Compensation Medicare Set-Asides (WCMSAs).


The 12/14/2017 statement provides as follows:


CMS understands the concerns regarding the opioid crisis occurring in the United States. We are committed to ensuring the determination of Workers’ Compensation Medicare Set Aside Arrangement (WCMSA) amounts are an adequate projection of claimant’s needs for future medical services and prescription drugs. CMS continually evaluates all policies and procedures related to WCMSA amounts. Any changes that Medicare pursues related to this issue will be reflected in our WCMSA amount review process.


More information on the WCMSA process can be found in the WCMSA Reference Guide.


We assume the above statement may be, in part, related to the California Workers Compensation Institute (CWCI) study finding nearly 70% of CMS approved MSAs require funding of opioids over an injured worker’s life expectancy (See our article, Opioids in the MSA . . . Challenges and Strategies, where this study is discussed). While we credit CMS’s Office of Financial Management (the CMS department which oversees the WCMSA review program and contractor) with recognizing the opioid crisis, what is left uncertain is what specific actions CMS is to take to address this problem in WCMSAs. Instead, CMS provides a vague statement indicating any changes related to the opioid issue will be reflected in its WCMSA review process and then cites its WCMSA Reference Guide.


CMS does not cite to a particular section of the guide, but we assume the following would be the most pertinent:



Drug Weaning/Tapering


Drug weaning commonly occurs with pain medications, such as opioids, especially when claimants’ work injuries improve. The WCRC takes all evidence of drug weaning into account, although in most circumstances the WCRC cannot assume that the weaning process will be successful. Usually, the latest weaned dosage is extrapolated for the life expectancy, but again, they assess all records when making these types of determinations. Where a treating physician believes tapering is possible and in the best interests of the claimant, CMS will consider all evidence in making a WCMSA determination, including medical evidence of current actual tapering.


Based upon the Tower MSA CMS Reconciliation Module, which reviews all MSA determinations for the purpose of identifying trends in CMS WCMSA allocation practices, CMS consistently disregards any active weaning or tapering process or scheduled reduction to future medication use and instead takes the latest dosage found in the medical records and/or prescription history and extrapolates it over the claimant’s life expectancy.


The question then is whether this December 2017 statement signals a departure by CMS from these past practices to a policy which will now give more weight to a weaning or tapering schedule from the treating physician which translates into limitations on the allocation of opioids in the WCMSA. We will take a wait and see approach in this regard.


It should be understood though that even were CMS to limit the allocation of opioids in the WCMSA, this in no way prevents the claimant from using the WCMSA funds for filling opioid prescriptions in excess of what is allocated. The reason being is CMS rules for administering a WCMSA allow for the funds in the account to be used for any Medicare-covered injury-related treatment or medication. As such, with a valid prescription, there is nothing to stop a claimant from converting funds allocated to a surgery to pay for medications, including opioids. It will remain then in the hands of the claimant’s medical provider to wean the claimant off opioids and other medications not intended for long-term use.



Practical Implications


As always, we will monitor CMS WCMSA determinations for signs of any changes to their allocating practices for prescription medications, especially in regard to opioids. However, we have to assume that until we see any changes, CMS will continue to follow its policy of taking the most recent medication dosage and frequency and pricing it out over the claimant’s life expectancy.


What this means then is opioid misuse must be addressed prior to submission of a WCMSA to CMS with any actual elimination of opioids documented in the medical records prior to submission of the MSA. Tower MSA is committed to working with our clients on reduction and elimination of opioids prior to CMS submission. Our Pre-MSA triage service is uniquely designed to identify such MSA cost-drivers and recommend intervention strategies, including escalating the matter to our Internal Pharm. D. for direct contact with the treating physician. Resulting reductions in opioid use limit MSA costs to the employer and provide for a healthier injured worker over his or her lifetime.




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

Case Study: 61.4% Savings on MSAs with Integrated Opioid Approach

The workers’ compensation industry’s efforts to reduce unnecessary opioid use doesn’t seem to have caught on with all sectors yet. A new report shows that in California, federal government approvals of funds for opioids in Medicare Set-Aside (MSA) agreements greatly exceed the recommended levels in evidence-based medical guidelines.


It’s a sobering report that experts say places the affected injured workers at increased risk of opioid-related dependence and addiction. The authors suggest public policy changes are needed to the government’s approval process for the MSAs. In the meantime, there are actions payers can take to rein in the costs — and risks — of overuse of these medications and still obtain government approval.



Opioids and MSAs


An MSA is a financial agreement in which injured workers who are or soon will be covered by Medicare are given funds to settle their workers’ compensation claims. Included are allotments to cover estimated future medical expenses.


MSAs are not required to be submitted for approval by Medicare; however, they offer claims administrators a degree of protection against future liability if the funds run out too soon and Medicare becomes the primary payer. Having an approved MSA means the government is less likely to seek repayment.


The California Workers Compensation Institute analyzed nearly 8,000 California MSAs that had been approved by Medicare in 2015 and 2016.  They focused on dollars earmarked for opioids and found “that nearly 70 percent of federally mandated and approved California workers’ compensation MSA settlements for injured workers require funding for decades of opioid use, often at dangerously high levels and in conjunction with other high-risk drugs. Such a requirement exceeds federal and state clinical guidelines and places patients at high levels of risk.”


For comparison, the authors looked at stats from a case-matched control group of 71,771 closed workers’ compensation permanent disability (PD) claims with the same types of injuries.


Here’s what they found:


  • 69.4 percent of the MSAs included allocations for opioids, compared to 59.1 percent of the PD claims.
  • 27.7 percent of the approved medications in the MSAs were for opioids.
  • The average amount set aside for opioids in the MSAs was $33,113, or 32.7 percent of the total prescription drug allocation.
  • The average daily morphine equivalent dose (MED) was 54.7, and more than 10 percent of the MSAs with opioids had an estimated MED level of more than 90 per day. Medical guidelines, including the official California Workers’ Compensation Medical Treatment Utilization Guidelines (MTUG), the standard of care for the state’s injured workers, recommend no more than 50 MEDs without concerted efforts to wean the patient to lower levels.
  • In terms of opioid strength, the cumulative morphine milligram equivalents (MMEs) in the MSAs was 45 times the cumulative MMEs in the PD claims; and opioid levels for the top 5 injury categories in the MSAs ranged from 33 to 78 times those of the PD claims.
  • The time period allotted for opioid use averaged 20.9 years.


“A more coordinated effort and better balance are needed between workers’ compensation programs and workers’ compensation MSAs in order to assure the long-term health and safety of injured workers as they progress through both systems,” the authors wrote.



Another Way


The exorbitant allotments for opioids in approved MSAs may be the average in California currently, but they don’t need to be the norm. There are a variety of strategies payers can use — even before they get to the settlement phase of a claim.


  • Physician peer review. A physician reviews the injured worker’s medical history and treatment and may uncover an opportunity to provide the same or better care using fewer, less strong and/or shorter time spans for opioids. A treating physician is likely more comfortable speaking with a peer who has looked into the records.
  • Early intervention. Payers can take a proactive approach to prevent injured workers from overuse of opioids by flagging at-risk claims and intervening.
  • Pharmacy benefit managers (PBMs). PBMs study data, medical records, lab results, etc., and manage patient care. They can also provide counsel and education to stakeholders involved in a claim, such as an adjuster, physicians, and nurse case managers.
  • Integrated approach. Discussions in which stakeholders review metrics can help keep claims on track. Third-party administrators, PBMs, MSA companies and others should be included.
  • Managing expectations. Injured workers in chronic pain, which comprises the bulk of those agreeing to settle their claims, often seek a cure to be pain-free. By educating them and their physicians these patients can understand that the pain can’t be eliminated but it can be managed.



Case Study (Provided by Tower MSA Partners) 61.4% Savings

As part of its business model, Tower uses a Triage service to identify challenging issues before an MSA is developed and provides recommendations to address them. The company’s clinical experts analyze the injured worker’s medical issues; they examine the recommended treatment plan to ensure it adheres to evidence-based medicine, and evaluate the need for the future medical care. An internal pharmacist contacts the treating physician to discuss the claim and make recommendations. Once that is completed, the company finalizes and sends the MSA for approval.


The goal is to limit pharmacy to medications appropriate for the long term and reduce the duration and strength of opioids where possible when the drugs are included in MSAs.


Using this integrated approach has led to the following results:


  • 7 percent of MSAs approved by the government include $0.0 for pharmaceuticals.
  • 6 percent of approved MSAs include opioids.
  • 4 percent MSA savings.





The opioid epidemic has been declared a public health emergency by the administration. The workers’ compensation industry has made tremendous strides in the effort to prevent opioid-related problems and wean injured workers off the drugs. The approaches that have been shown to be successful should be also be utilized when MSAs are involved.



Michael Stack - AmaxxAuthor Michael Stack, CEO 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. .



Workers’ Comp Roundup Blog:


©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.

Using Benefit Offsets to Reduce Work Comp Costs

Reducing costs in your workers’ compensation program includes understanding the concept of offsets against workers’ compensation benefits.  This is something that often does not occur.  When it does, however, the result is program paying benefits that otherwise should not be paid.  A review of your workers’ compensation program to identify and implement applicable offsets can result in immediate savings to your program.



Understanding the Concept of Benefit Offsets


The ability to offset workers’ compensation benefits against collateral sources has its origins in the belief that someone suffering a personal injury should not reap a windfall.  In many jurisdictions, these same offsets are available under a workers’ compensation act for indemnity benefits an employee may be receiving from a government program.  These benefits include:


  • Social Security Disability (SSDI) benefits;
  • Social Security Disability (SSDI)Reverse Offsets
  • Prior Injury offsets;
  • Retirement annuities from public employee organizations; and
  • Various pension benefits received from a labor union health and welfare funds.



Application of the Offset Process


Statute or case law often define allowable offsets.  In some jurisdictions, the law explicitly prohibits these offsets.  It is important to understand the law in your state before you seek to reduce the amount being paid in workers’ compensation indemnity benefits.



Social Security Disability Benefit Offsets


A seriously injured employee can collect both workers’ compensation benefits and Social Security Disability benefits (SSD) if the Social Security Disability requirements are met. To prevent employees from collecting excessive workers’ compensation benefits and SSD benefits, state laws define the maximum benefit wage the employee can receive. In most states, the amount of Social Security Disability is offset by the workers’ compensation indemnity paid.


Example: An injured employee is collecting permanent partial disability (PPD) at the rate of $300 per week, or $1,300 per month (four and one-third weeks). The employee applies for Social Security Disability (SSD) and is approved. Based on prior earnings, the employee is eligible to collect $1,500 per month from the Social Security Administration (SSA).


With the workers’ compensation offset, SSA pays the employee $200 per month ($1,500 SSD minus $1,300 PPD). When the employee’s PPD is exhausted, the SSD will revert back to $1,500/month.



Social Security Reverse Offsets


A few states have a reverse offset, allowing the workers’ compensation carrier to take a credit for the amount paid in SSD benefits. Be sure your adjuster knows if the state allows a reverse offset for workers’ compensation indemnity benefits paid to an employee who is also collecting SSD.


In the previous example, with a reverse offset, the carrier would pay no PPD, as the SSD is greater than the PPD.


Example – A reverse offset: An employee collects $1,300 a month in PPD and is approved for $1,000 per month in SSD. The employee is paid $300 per month ($1,300 minus $1,000) by the workers’ compensation carrier. When PPD is exhausted, the employee then collects a $1,000 in SSD per month.



Prior Injury Offsets


Another deduction sometimes overlooked is the pre-existing permanent partial disability rating the employee has from a prior injury, often at a different employer.


Example: The employee suffered a back injury fifteen years ago while working for another company. The back claim was settled with the prior workers’ compensation carrier, based on a 10% permanency rating.


A year ago, the same worker suffers a back injury while working for your company. The treating physician and the IME doctor both give the employee a 25% permanency rating, which includes the pre-existing condition.


Most states allow you to deduct the prior permanency. This allows the adjuster to settle the claim for the value of a 15% rating (25% minus the prior 10% rating).



Other Factors to Consider


There are various issues to consider when applying an offset against applicable benefits.  It is important to consider the rules and requirements when seeking to take advantage of this compensation structure.  Important considerations include:


  • Offsets are often only allowed to be taken for the actual amounts an employee or their dependents receive and not the amounts they may be entitled to receive. This situation is common when an employee voluntarily decides to receive a reduced collateral benefit.


  • Employers and insurers can often offset the amount the employee was receiving prior to the work injury. The rationale for this is rooted in the understanding an employee’s earning capacity changes following an injury.  This change in income impacts their collateral benefits.


  • Benefits can be recategorized in order to achieve the offset threshold amount. This often occurs when temporary total disability benefits are recategorized to permanent total disability benefits.  Most jurisdictions that allow this find it permissible to do this on a retroactive basis.




It is common for workers’ compensation programs to overlook collateral source offsets.  This is a costly error that can easily be corrected and result in immediate savings to many programs.




Michael Stack - AmaxxAuthor Michael Stack, CEO 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. .



Workers’ Comp Roundup Blog:


©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.

Move Workers’ Comp Claims to Settlement with Empathy

An injured worker with an open claim for 15 years finally agreed to settle, and it all came down to an extra $2,000 – $3,000 for a much wanted trip to Alaska. This real claim is very common in our industry and points to a glaring deficiency: a total lack of empathy for the injured worker.


Companies often have many cases that have been on the books for months or even years. Adjusters may have approached the injured workers to see if they’d like to settle and learned, as much as the claimant doesn’t like the workers’ compensation system, he has no interest in closing the case.


There are myriad reasons for not settling a claim, but there is no way to know the real reason unless someone asks. That’s where a professional administrator can make a huge impact.



Reasons Claims Stay Open


Workers’ compensation claims are not like fine wine; they don’t improve with age. So keeping a claim open indefinitely doesn’t make good business sense, and it’s often not in the best interest of the injured worker, either.


The many reasons injured workers don’t want to settle their claims include:


  • Disagreement on total value.
  • Advice from attorneys, family members or friends not to settle.
  • Concern they will run out of money.
  • Fearful of going it on their own — even if they don’t like having to deal with a claims adjuster or having medical treatment denied.
  • Don’t know how to ensure they are complying with various laws and regulations, such as Medicare.


And perhaps the biggest reason — they are afraid of change. Much as they may abhor dealing with the workers’ compensation system, the alternative seems worse. As the saying goes, ‘better the devil you know than the devil you don’t.’


So how can companies best address these legacy claims? Possibly with a neutral third party.



Professional Administrators


The claim noted above settled when a professional administrator became involved and, more importantly, spent some time getting to know the injured worker. He met with the worker and learned that he and his wife had dreamed of going to Alaska but were never able to because of his injuries and the fear they would not have enough money in the future. He then went to the carrier to see if additional monies could be added to the most recently proposed settlement. When he told the couple that the insurer had agreed to an additional $2,000 to $3,000, the injured worker and his wife broke down in tears and agreed to the settlement.


Showing empathy for an injured worker is key to getting an agreement. Injured workers need to be heard and understood. Those with long-term claims have had their lives turned upside down. Someone willing to listen and grasp their needs can have a major impact on moving the claim toward closure.


The presence of the professional administrator added several other positive elements to the scenario.


  • Advocacy. He explained exactly how the settlement would address the injured worker’s future needs. A professional administrator acts as an advocate for the employee throughout his life, helping to direct him to medical providers and dealing with the settlement money. That addresses one of the main concerns of employees reluctant to settle — the idea that someone will still be there to guide them through the process.


  • Neutral party. Professional administrators secure substantial discounts through their medical networks, which is also how they are paid. The fact that it is a neutral party adds another element of comfort for the injured worker.


  • No more denials. Also, he explained to the injured worker that he would no longer face denials for requested medical treatment, once the settlement was completed.


Experienced professional administrators are able to think outside the box.





Injured workers are in a situation they did not seek nor expect, and are typically fearful of having no money for future medical issues, and to take care of their families.


Having an advocate who is a neutral party can understand their needs and coordinate a successful settlement to help them get on with their lives and get their claims closed.




Michael Stack - AmaxxAuthor Michael Stack, CEO 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. .



Workers’ Comp Roundup Blog:


©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.

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