Case Study: $951,189 in Savings Through MSA Optimization

Reduce your workers' comp case studyAttention to detail cannot be overstressed when it comes to finalizing Medicare Set-Asides. The Centers for Medicare and Medicaid Services is very specific regarding what can and should be included to gain its approval. Beyond that, those setting up the MSA need an in-depth understanding of the rules to ensure the injured worker gets what he needs while keeping costs in check.

 

The CMS rules for MSAs are intricate and laced with nuances. Additionally, the agency often issues changes intended to ease the process. That means those tasked with creating the MSA must have a clear understanding of the latest iteration of the rules.

 

 

MSAs

 

An MSA is a portion of a total workers’ compensation settlement designed to cover expenses for all future medical expenses related to the workplace injury that would otherwise be reimbursable by Medicare. The goal is to identify as accurately as possible the total cost that will be incurred during the injured worker’s life.

 

CMS approval is not a legal requirement for an MSA. However, the potential financial repercussions for providing an inadequate MSA are such that many industry stakeholders find it wise to submit proposed MSAs to the agency.

 

Estimating the future medical costs takes enormous skill. For example, the final amount takes into account only the expenses related to the specific injury. Also, it needs to include things such as durable medical equipment that, while not needed presently, may be necessary in the future. Surgeries and other recommended medical treatments should also be included.

 

At the same time, the MSA should not include treatments or medications that are either not related to the injury or are not currently being used, or expected to be used by the injured worker. Unfortunately, when treatment recommendations are not clearly stated in the medical records, the concern that CMS may return a ‘counter higher’ response can lead many to overfund MSAs — especially, in the case of medications.

 

 

 

Case Study (Provided by Tower MSA Partners): $951,189 in Savings from MSA Optimization

 

 

CMS guidelines stipulate that medications listed as ‘active’ by the treating physician should be included in the MSA — even if the injured worker is not taking them.

 

 

Challenge

 

Pennsaid (Diclofenac Sodium) is a topical, nonsteroidal anti-inflammatory drug used to treat pain. The injured worker received a sample of the medication and a prescription of Pennsaid 1.5 percent for low back pain. However, the medication did not effectively manage the pain, so the injured worker never filled the prescription. The claims adjuster was unaware of the prescription since it had been provided as a sample dose followed by a paper prescription.

 

Total MSA Exposure — $970,355

 

Solution

 

Tower MSA’s physician follow-up team worked with the assigned nurse to make the treating physician aware that the injured worker was not filling the prescription. The doctor agreed to discontinue the medication and replace it with an oral version of Diclofenac. He also offered to prescribe Nabumetone, another nonsteroidal anti-inflammatory medication used to treat pain. However, the injured worker also did not fill that prescription.

 

A letter was sent by the physician to confirm discontinuation of the ‘active’ medication. It included the following language:

 

“I discontinued [the injured worker’s] Pennsaid 1.5%. He was offered Nabumetone, but the patient declined this medication.”

 

The pharmacy benefit manager blocked both medications to prevent the possibility of either being reintroduced. The letter from the physician was appended to the MSA, and both Pennsaid and Nabumetone were removed from the prescription drug portion of the allocation.

 

 

Results

 

In its review of the MSA, CMS accepted Tower’s physician letter as evidence of the discontinuation of both drugs and approved the MSA in full.

 

The removal of Pennsaid and Nabumetone drastically reduced the MSA allocation:

 

Initial MSA Allocation $970,355
Savings from Removal of Pennsaid & Nabumetone: $951,189
 

Final MSA:

 

$  19,166

 

Conclusion

 

Injured workers should not have to worry about paying for future medical expenses related to their workplace injuries after they settle their workers’ compensation claims. At the same time, overpaying an MSA for unused and unnecessary services and medications serves no one’s best interests. It’s important to use experts to ensure the appropriate funding amount is allocated.

 

 

Author Michael Stack, CEO Amaxx LLC. He is an Michael Stack - Amaxxexpert 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 .

Contact: mstack@reduceyourworkerscomp.com.

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

©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.

[CASE STUDY] Lump Sum vs. Structured Settlement

Lump Sum vs Structured SettlementThe combination of professional administration with a structured settlement (annuity) is often the best way to protect an injured party’s settlement dollars in the event of an unexpectedly very costly year due to higher-than-anticipated medical needs after settlement. The combination of these services in a costly scenario allows the injured party to access more coverage from Medicare and pay less out of their own pocket.

 

What Is Professional Administration?

 

Professional administration involves the use of a professional third party to help manage the injured party’s medical settlement funds or Medicare Set Aside (MSA) after settlement.

 

“Professional administration achieves two important goals,” says Marques Torbert, CEO of Ametros. “It saves the injured party significant money on their medical expenses by providing them with access to discounted medical network prices, and it ensures that all their reporting to Medicare for a Medicare Set Aside account is done properly.”

 

When an MSA account runs out of funds and reaches a zero-dollar account balance, as long as it is administered properly Medicare agrees to step in as the secondary payer covering the continuing and needed medical expenses. Medicare “highly recommends” the use of professional administration to make sure that funds are extended as long as possible through discounts, used appropriately for medical care and ultimately reported properly so that Medicare will know when to step in as the payer.

 

 

What Is a Structured Settlement?

 

A structured settlement is a stream of periodic payments paid to an injured party by the defendant primarily through the purchase of annuity (fixed and determinable) issued directly by highly rated life insurance companies. In the case of an MSA, the annuity will enable the issuance of annual payments that cover the entire MSA amount.

 

As Eric Vaughn, executive director of the National Structured Settlements Trade Association, explains, “Structured settlements provide an injured party with a reliable, stable source of income which can be critical to cover their ongoing medical costs. A structured settlement removes the variability of the markets and guesswork out of funding their future expenses.”

 

The Centers for Medicare and Medicaid Services (“CMS” or “Medicare”) is accustomed to the use of annuities with MSAs. Medicare has provided clear guidelines for how the MSA should be set up when annuities are involved, with two years of costs funded upfront and the rest of the cost broken out annually over the injured person’s lifetime. When an MSA is sent to Medicare for approval, Medicare will review and approve MSAs with structures.

 

When assessing future medical costs in an MSA, it’s important to take a very conservative approach.

 

Using a structured settlement and professional administration for the MSA can provide valuable protection to an injured party should they have a costly year. The combination of these services will allow the injured party to properly get coverage from Medicare in the event their MSA funds run out. That Medicare coverage can, in many cases, ensure that the injured person pays less out of their own pocket.

 

As Vaughn points out, “Annuities are a natural fit with MSAs, given the annual medical expenses are already budgeted over the individual’s lifetime.” Torbert adds, “Attorneys and adjusters alike are recognizing the power of combining the annuity with administration not only to assist the injured party in saving money, but also to provide them with support for their medical care over the long run.”

 

It’s important to keep in mind, not all professional administrators and annuities are the same. Choose an administrator that provides the best service and saves the injured party most on medical expenses. When choosing annuities, it’s important to work with a trusted broker and to select a reliable, highly rated life insurance company. Speak with experts in both administration and structures to make sure you and your client make the right selection to ensure you have the most financial protection.

 

 

Case Study

 

Let’s take a look at an example of how an injured party, Joe, can leverage these two important services to protect his settlement dollars in the MSA.

 

Let’s assume that Joe accepted a settlement with an MSA and has a life expectancy of 10 years.

 

Scenario #1

 

In the first, good scenario, Joe is doing well and is using professional administration to receive discounts so he has relatively low spending of a few thousand dollars a year on MSA medical items.

 

Both a lump sum and structured account would have the same amount spent at the end of Joe’s life expectancy.

 

 

Scenario #2

 

Let’s take a look at the unique protection that professional administration and a structured settlement together can offer Joe in the scenario where he undergoes a costly surgery or other adverse outcomes.

 

Let’s assume that Joe is offered the exact same MSA settlement amount and starts out on the same pace. Unfortunately, three years after settlement, Joe needs to pay for a complex surgery.

 

With a lump sum account, Joe ends up having to pay for the remaining cost of the surgery after using what funds he currently has in his MSA account. Unfortunately, with a lump sum settlement, he will never receive MSA funds again. If he is Medicare-eligible, Medicare will cover about 80% of the remaining balance, and Joe will have to pay 20% out of pocket for all future treatment costs for the rest of his life (such as Medicare premiums and his regular treatments).

 

If Joe has a structured account managed by a professional administrator, his funds will take a large hit at the time of his surgery, but the administrator will have ensured the funds were spent appropriately so Medicare will step in as the primary payor. Medicare will pay for 80%, and he will take care of 20% out of pocket for the remaining balance of the surgery only for that year. After that year, his account will continue to replenish annually, and he can use his MSA funds to pay for future treatment.

 

 

Summary

 

In summary, the outcomes for Joe can be strikingly different. With the lump sum settlement, he is losing personal funds, and he never again has the chance to build value in his MSA account. With the structured settlement, Joe is better off over time. The way Joe settles his case has a very powerful impact on his finances, and the combination of a structured settlement and professional administration protects the injured party more effectively.

 

 

 

Author Porter Leslie, President of Ametros. He directs the growth of Ametros and works with its many partners and clients. He built his career leading customer-focused businesses in the healthcare and financial services industries. Prior to Ametros, he worked in investment banking, private equity, and corporate development. Leslie 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. He is fluent in Spanish and Portuguese.

The Power of a Good Settlement Consultant

The Power of a Good Settlement ConsultantWhich unappealing situation would you prefer?

 

A. You must seek permission to see any medical provider; then, you may have to wait and/or travel far distances to visit the physician. Any medications, surgeries, or procedures must first be approved, and there’s a good chance some will be denied.

 

B. You have to navigate a complex healthcare system yourself — meaning you’re on your own to find the right specialists and ensure they charge according to your state’s ‘fee schedule.’ You pay full retail prices for doctor visits and all medications and treatments. You must fully comply with the myriad Medicare requirements or risk ultimately losing that benefit. You are extremely worried you won’t have enough money to pay for your medical care, your mortgage and send your child to college. Short of paying excessive fees for expert advice, there is no one to guide you.

 

 

Complex Issues Can Prevent Settlement

 

Neither scenario is appealing; yet, those are the choices facing many injured workers with long-standing, complex workers’ compensation claims. While many would like to settle and finally leave the workers’ comp system; issues such as lien resolution, financial planning, legal issues, and insurance concerns are just some of the challenging hurdles which are seemingly too difficult to overcome.

 

Fortunately, a solution to these challenges can often be found that meets the injured worker’s unique needs, along with those of the attorneys, employer, payers, and others involved.  Finding the right people to work with can get claims off payers’ books and ensure the injured worker’s financial and medical needs are taken care of throughout his lifetime.

 

 

The Settlement Consultant

 

A settlement consultant is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. For example, a consultant that works with insurance planners can provide comparative information on insurance products, such as disability or long-term care insurance. Having the benefit of an expert in Medicare Set-Asides available can ensure compliance and reporting issues are addressed, so future benefits are not put at risk.

 

These experts can be brought into the process early on, so the settlement is set up appropriately. Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

 

 

Settlement Consultant as General Contractor

 

If you were building a house, you would need workers to lay the foundation and put up the walls, electrical and plumbing specialists, roofers, and HVAC professionals. You might want a home theater with the latest equipment and would need an expert for consultation and installation. Maybe you’d opt for a decorative pond on the property, and would need someone experienced in grading the land.

 

You would want a general contractor to oversee the entire project and make sure things were done according to your specifications and timeframe.

 

A settlement consultant should function as a general contractor who coordinates all the moving parts to the settlement. Just like the best general contractors, a settlement consultant should be able to identify and coordinate all the right players needed to create a truly win-win settlement.

 

Among the qualifications of the best settlement consultants are:

 

  1. Vast experience and deep connections. The best settlement consultants have vast experience and deep connections with many vendors. They can find the right ones for each injured worker.

 

  1. Whole-person approach. Superior consultants look beyond the amount of the settlement. They work closely with the injured worker, to ascertain not only his medical needs, but other considerations; such as unique legal issues to be resolved, insurance concerns; retirement needs, and college funding for children or grandchildren.

 

  1. Ability to uncover lifetime needs. The most qualified settlement consultants spend time getting to know the injured worker and identifying his needs; then bringing in experts to address them.

 

  1. No cost to the injured worker. The consultant’s services should also be completely fee transparent, and come at no cost to the injured worker.

 

 

Use Settlement Consultant Early

 

A settlement consultant should be brought into the case as early as possible, even before the worker has agreed to settle the claim. By forming a relationship with the injured worker and understanding his needs, the consultant can present a variety of customized solutions to focus on his particular situation and help reach an optimal settlement

 

 

Conclusion

 

Settling a workers’ compensation claim can be a nerve-wracking experience for an injured worker, especially one who has been in the system for an extended period of time. Working with a truly qualified settlement consultant can help settle the claim and empower the injured worker to lead the life they deserve.

 

 

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 .

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

Proposed PAID Act Intends to ID Medicare Part C, Part D and Medicaid Enrollees for Insurers

Proposed PAID Act Intends to ID Medicare Part C, Part D and Medicaid Enrollees for InsurersOn 5/18/2018, the Provide Accurate Information Directly (PAID) Act was introduced in Congress for the purpose of allowing settling parties an easy method to identify if a claimant is enrolled in a Part C or D plan or Medicaid.  The bill, H.R. 5881, sponsored by U.S. Rep. Gus Bilirakis R-Fla and U.S. Rep. Ron Kind, D-Wisc, requires the Centers for Medicare and Medicaid Services (CMS) to share information on not only whether a claimant is a Medicare beneficiary, but also whether the claimant is enrolled in a Part C Medicare Advantage (MA) Plan, Part D Prescription Drug Plan or Medicaid.  It also requires CMS to provide the identity of the MA or Part D Plan or state Medicaid program in which the claimant is or was enrolled.

 

 

Stepped-Up Efforts to Seek Reimbursement From Settling Parties

 

The catalyst for this legislation comes from stepped up efforts by these various plans and programs, especially by MA Plans, to seek reimbursement from settling parties. MA Plans have largely prevailed against insurance carriers in seeking reimbursement under the Medicare Secondary Payer Act which has led to a heightened awareness of the potential for such claims and the need to identify claimants enrolled in such plans and programs prior to settlement.

 

While liability and no-fault carriers and workers’ compensation plans are now on notice of the potential for such reimbursement claims, there presently exists no universal method to identify a claimant’s enrollment status, short of asking the claimant.  Accordingly, the bill provides a solution by requiring CMS to share such enrollment information.

 

 

Enrollment Information Shared Through Mandatory Insurer Reporting

 

A review of the bill shows the enrollment information would be shared through the Section 111 Mandatory Insurer Reporting query process.  In short, along with identification of whether a claimant is a Medicare beneficiary, the query response would also provide whether the claimant is or has been enrolled in a MA or Part D Plan or a state Medicaid program for the past three years and the name of the plan or program.  The insurance carrier or self-insured entity would then be able to readily contact the Part C or D plan or Medicaid program to resolve any claim for reimbursement.

 

The bill was referred to the Committee on Ways and Means and the Committee on Energy and Commerce for further action.  Tower MSA Partners will provide updates on the legislation when warranted.

 

 

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

6 Ways Post-Settlement Professional Administrators Can Provide Peace of Mind

Injured workers with long-standing claims and ongoing medical concerns are often hesitant to settle their case because they fear running out of money too soon and potentially having no one to turn to for help. Increasingly, injured workers and their advocates are finding they can alleviate both concerns — by working with a professional administrator.

 

 

Professional Administration

 

Professional administrators are not new to the workers’ compensation system; however, few injured workers know or understand what they do and how they can help. Meanwhile, a growing number of claim settlements now involve a professional administrator.

 

Recent advancements in pricing and capabilities have made administration a more cost-effective and elegant solution. Those who go with a professional administrator find they have more freedom of choice than under the workers’ compensation system, but can still take advantage of expert assistance and discounted prices for their medical needs.

 

Companies that excel in professional administration have large medical networks to offer discounts — for medical office visits, medications and durable medical equipment. The individuals that settle their cases, also known as “members,” save an estimated 20-30% on their annual medical care. These organizations also offer personal expertise to help navigate the complex healthcare system. Members can reap these benefits, without giving up precious dollars.

 

What members do give up are the restrictions of the workers’ compensation system; such as

 

  • Utilization review
  • Being required to see providers in inconvenient locations
  • Difficulty contacting someone who understands their case and needs

 

Professional administrators also handle government regulations for Medicare, Medicaid, and other government benefit programs. They take care of all reporting requirements.

 

 

Control of Funds

 

Some professional administrators are now using technology to simplify and assist members to get the benefit of expert oversight while maintaining full control over their money. Here’s how it works:

 

The professional administrator provides the member with a healthcare savings card that is used to pay for all medical care. The injured party or “member” receives their settlement money and deposits it in their own personal bank. Then, the member places the debit card for that account on file with the administrator for use for medical expenses. All subsequent medical bills go directly to the professional administrator, which applies its discounts and pays the bills from the debit card on file. There are no co-pays or out-of-pocket expenses involved.

 

However, the member has complete control over the account at all times. He or she can deposit and withdraw funds at any time. Activity on the account can be tracked by the professional administrator and available for viewing at any time by the member — including the discounts generated by using the card.

 

This newer online system can be easily accessed through smartphones and other electronic devices to see activity on the account. They also provide notifications, about advanced trending, for example, to monitor the account spending over a specific time period.

 

The platform functions similar to a clearinghouse by managing transactions and ensuring money is available to support any charges. Support personnel is available to answer any questions.

 

Some of the country’s largest companies offer the service at settlement to give their employees a better experience and to show goodwill. The healthcare savings card is just the latest service to simplify the injured worker’s post-settlement experience.

 

 

What to Look For

 

As with any industry, some professional administrators are better able to assist members than others. When looking at these companies, here are some of the issues to consider:

 

  1. Experience. The professional administrator should be comprised of people with solid backgrounds in all aspects of insurance, finance, and healthcare.
  2. Large networks. The more robust the medical networks, the better the savings for the injured party. The company should be contracted with multiple providers, pharmacies, and durable medical equipment companies throughout the country.
  3. Price comparisons. Ideally, the company should be able to provide a comparison report showing the retail prices for the injured worker’s specific medications and the discounts currently offered through the professional administrator.
  4. Medicare expertise. Since a majority of workers’ compensation settlements involve Medicare Set-Asides, the professional administrator should be able to competently handle all reporting aspects required by the Centers for Medicare and Medicaid Services.
  5. 24-Hour Help. The company should provide easy access to support personnel who can help coordinate medical care and recommend qualified providers.
  6. Expansive Resource Outreach. Each injured worker has different needs, and the professional administrator should have access to a wide network of people and organizations that can assist.

 

 

Summary

 

Injured workers seeking to settle their claims now have an option to get the support they need to manage their funds and comply with various regulations. A competent professional administrator can ensure these injured workers move forward with their lives.

 

 

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 .

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

 

Effectively Use Mediation to Settle More Workers’ Compensation Claims

The use of mediation as a means of effective alternative dispute resolution in workers’ compensation is gaining momentum across the United States.  Given the highly litigious nature of many workers’ compensation claims, mediation promotes the involvement in all interested stakeholders and allows parties to resolve their claims in a timely manner.

 

Members of the claims management team who fail to prepare for mediation will not see its benefits.  Anyone seeking to promote efficiency and reduce workers’ compensation costs must take proactive action in order to make the most of a mediation session.

 

 

Effective Use of the Mediation Process

 

Alternative dispute resolution in workers’ compensation systems can be used even if it is not required or endorsed by a state industrial commission.  The process starts when the employee and employer/insurer agree to use a neutral third party to help resolve their dispute.  When agreeing to do so, it is important to invest time and effort in reaching a settlement.  Terminating the mediation session at the first sign of tension is never helpful.

 

Preparing for medication is key.  All interested stakeholders must take the following steps:

 

  • Evaluate the claim and set realistic expectations for settlement. While issues such as “pain and suffering” are important to any injury-related case, this is something that does not add value to the underlying claim;

 

  • All interested stakeholders must be present and willing to work hard toward settlement. This includes being physically present at the mediation settlement and willing to sometimes work through lunch or late into the day.  Be prepared for downtime and keeping occupied and focused; and

 

  • Include interested parties and settlement services in the mediation session. Effectively settling a workers’ compensation claim involves many complex issues and considerations. Leverage the following services to prior to and during mediation:

 

– Defense attorney: Attorneys must play an active role in managing the emotional nature of settlement negotiations, and are a key relationship to leverage early in the claim.

 

– Settlement Consultant: A settlement consultant can assist the parties to understand the different options available, help identify the true wants and needs of both sides, and provide a negotiation tool to help bridge the gap of negotiations and bring about a successful resolution to the case.

 

– Professional Administrator: A professional administration handles many of the administrative tasks on behalf of the injured worker once they’ve settled their Workers’ Compensation claim and can provide piece of mind to address many of the injured worker’s fears and concerns prior to settlement.

 

 

Be Prepared; Be Willing to Compromise

 

Preparing for mediation is key for all involved parties.  Steps members of the claims management team must take include:

 

  • Receiving an updated case analysis from your settlement team. Request that this be provided in advance so one can receive clarification, properly set reserves and provide adequate settlement authority;

 

  • Communicate with defense counsel and settlement services well in advance of mediation and develop a strategy. Make sure a confidential mediation statement is also sent to the mediator in advance.  This statement should outline the claims, defenses, and evaluation of the case.  It may also be helpful to provide a statement as to how you see the issues being resolve; and

 

  • Be realistic and willing to compromise. In a settlement via mediation, all parties are able to have a role in resolving a case and be heard.  It is important that there be a willingness to find a happy medium – a “win” for everyone.

 

 

Effectively Working with the Mediator

 

It is important to work with your settlement team to select the right mediator.  This is because each mediator has their own style.

 

The style of a mediator may also be important depending on the unique facts of a case.  Some of these could include matters involving a pro se claimant, a claimant who is a recent immigrant (cultural sensitivity is an important consideration), someone who is older (or younger) or one who has had many prior workers’ compensation cases.

 

It is also important to be open and honest with a mediator.  If there is information a party does not want to be disclosed to the other side, make sure you are clear when sharing this information.  Never lie and do not be evasive.

 

 

Conclusions

 

Mediation is a great tool to use when settling workers’ compensation cases. In many instances, it provides for fast and effective resolution to reduce program costs.  When using this tool, it is important to prepare for and be willing to compromise.  It is also important to work with the mediator in an effective manner.

 

 

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.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

8 Steps to Obtain Faster, More Accurate Medicare Set-Asides

8 Steps to Obtain Faster, More Accurate Medicare Set-AsidesMedicare Set-asides can take time, money and valuable resources in the claim settlement process. Partnering with experts makes both financial and logistical sense to get your claims settled that much faster, and for the lowest cost.

 

Taking a proactive approach and truly engaging with your MSP vendor will help limit the costs and time to create the best possible MSA.

 

 

Action Steps

 

Strengthening your relationship with your MSP provider requires you to become involved, rather than taking a back seat and expecting the vendor to do it all. Here are actions that will help:

 

 

  1. Provide Complete Information

 

An accurate, defensible MSA report is dependent on the availability of all pertinent information and documentation. You don’t want to delay the process by having to revise the report because of missing information. While the MSA company may be able to access your claim system for relevant records, there may be older records and legal documents in a different system. At the time of referral the following information should be provided:

 

  • Complete referral form
  • Claim payment history
  • Two years of medical records for each
  • Accepted and denied body parts
  • Multiple dates of injury settling
  • Court orders and rulings
  • Depositions

 

 

  1. Read and Heed the Report

 

In addition to a projected dollar amount, the MSA report should include the basis for the number along with recommendations on ways to reduce the allocation and streamline the process. Failing to read through the report and follow the recommendations is wasting your money. For example, there may be suggestions to

 

  • Clarify ongoing medication use
  • Address open-ended treatment
  • Implement an action plan to reduce high opioid or other medication use

 

The vendor may have services that can address these and other issues that will better ensure CMS approval. Also, the report may include unintentional oversights or a misinterpretation of the records. Since you know the details of the claim better, it makes sense to read through the report and question anything that you don’t understand.

 

 

  1. Allow for Intervention

 

Missing medical reports, open-ended medication recommendations, and inconsistent physician statements are among the many hurdles that can increase the allocation or stall the approval process. The MSA vendor should provide an intervention plan to address any such issues that arise before the MSA report is completed and submitted to CMS. You should authorize the company to move forward with the plan and to meet with any attorneys involved if necessary.

 

 

  1. Work with the Compliance Team

 

A couple of questions are best left to attorneys, such as whether an MSA is even necessary and, if so, how state statutes, regulations or case law may affect the preparation and submission of the MSA. MSP vendors typically work with attorneys who are experts in MSP compliance. They can show you various tactics to limit the allocation amount. To do so, you need to provide the vendor with information on accepted and denied body parts along with relevant court orders, rulings or depositions.

 

 

  1. Agree to Escalation

 

A claims professional who neglects to respond to a recommendation from the vendor can create problems getting CMS approval. Conversely, the MSA vendor’s front-line personnel may not be giving you the information you need. Both you and the vendor should agree to have an escalation process in place. This will allow the vendor to bring the recommendation to a supervisor or manager, and lets you talk with a key contact at the vendor’s office to get a complete picture of any issues that must be addressed.

 

  1. Task Vendor as Gatekeeper

 

If your organization has many legacy or other claims that have been open for a while, you may want to conduct a settlement initiative. This typically involves many parties; such as defense attorneys, structured settlement brokers, professional administrator and a medical case manager. Have the MSA vendor act as the gatekeeper for this, by coordinating MSA development, clinical intervention, and CMS submission. That frees up the claims handler and defense attorney to focus on settlement negotiations and finalization.

 

 

  1. Include the Vendor in Finalization

 

The settlement terms must be consistent with CMS guidelines, including the proper inclusion of the MSA and defining Medicare conditional payment resolution. Also, CMS requires the MSA company to submit final, court-approved, settlement documents to make the approved MSA effective. Your defense attorney should, therefore, work with the MSP compliance team to avoid any problems later.

 

 

  1. Monitor Performance Metrics

 

You want to make sure your partnership with the MSA vendor continues to be successful and correct any areas that need improvement. The vendor should be able to provide performance metrics, such as

 

  • The number of MSA referrals
  • The turnaround time to write the MSA report
  • The CMS approval rate
  • Percentage of MSAs with prescription medications
  • Cost savings as a result of interventions
  • Percentage of MSAs with Development Letters from CMS

 

 

Conclusion

 

MSAs are complicated and can be expensive and time-consuming. Partnering with the right experts and staying involved with them can get you to a less costly settlement sooner.

 

 

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 .

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

What To Expect From A Structured Settlement Consultant 

Injured workers who settle their claims are increasingly looking to settlement experts to help smooth the process. One of the key players in the equation is the structured settlement broker; the person who helps bring the case to resolution.

 

But there are many companies and individuals under the umbrella of ‘structured settlement broker,’ and they do not all function alike. It’s important to understand what they do — and what they can do — to ensure the settlement is truly a win-win for all parties, especially the injured worker.

 

 

Broker vs. Consultant

 

Planning a settlement is much more involved and complex than many may think. It requires more than just getting the money to the injured worker. There are many administrative and governmental issues that may need attention. Also, the injured worker may have needs beyond those of the immediate future must be taken into account. This takes a well-thought-out strategy.

 

The role of a structured settlement broker is evolving. The idea of setting up a transaction, signing the paperwork and then ending the relationship is over. The best companies to handle claims settlements are those that act as consultants to injured workers, understanding their needs and bringing in the best people to handle them.

 

Each settlement must be customized to fit a specific injured worker. Among the issues that may require involvement by experts are:

 

  1. Lien resolution.
  2. Financial planning.
  3. Tax consequences.
  4. Government benefit programs.
  5. Legal issues.
  6. Retirement planning.
  7. Insurance concerns.
  8. Future college education for children or grandchildren.

 

The consultant should know various settlement tools that can address these issues. For example, a consultant that works with insurance planners can provide comparative information on insurance products, such as disability or long-term care insurance. Having the benefit of an expert in Medicare Set-Asides available can ensure compliance and reporting issues are addressed, so future benefits are not put at risk.

 

These experts can be brought into the process early on, so the settlement is set up appropriately. Rather than just running quotes, the structured settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table.

 

The consultant’s services should also be completely fee transparent, and come at no cost to the injured worker.

 

 

Examples of Issues and Players

 

Many circumstances may be overlooked in the settlement process. Working with an experienced structured settlement consultant can reveal and address those, such as:

 

  • Attorney Fee Deferrals. There are many ways to structure attorneys’ fees to allow money to be used in the future. Money deferred can be used for supplemental retirement funds, protection against inflation with cost of living adjustments, and potential avoidance of the Alternative Minimum Tax, for example.

 

  • Calculating realistic future medical costs. A top-notch structured settlement consultant should be able to show comparisons of the current costs of medications and procedures relevant to the injured worker with discounted costs offered through the consultants’ networks.

 

  • Trust funds. Trusts can be a great benefit to manage and protect assets, regardless of the person’s wealth level. Proper planning requires establishing a trustee, identifying beneficiaries, and determining how the assets should be held, invested and distributed. A qualified structured settlement consultant should be able to provide unbundled, transparent and competitive administrative and investment advisory pricing that will ultimately save money for the injured worker.

 

 

Collaborative Process

 

A successful structured settlement begins with a positive relationship between the injured worker and the consultant. A typical injured worker who is thinking of settling his claim is likely unaware of many issues he will face in the years ahead for which he is not prepared. By working closely and getting to know the injured worker the consultant can proactively identify concerns that may arise over the person’s lifetime.

 

The consultant and injured worker should work together as a team to find the optimal solutions. Bringing in the consultant as early as possible in the process allows him to become better acquainted with the injured worker and uncover his short- and long-term needs.

 

Once the settlement is reached, the consultant should ensure there will be someone to continue acting as a support and guide. They should have relationships with professional administrators who work with the injured worker throughout his life, guiding him through the many regulatory and medical mazes he will face.

 

 

Summary

 

The expectation for a structured settlement broker is a company that brings value beyond just the transaction itself. It should be a consultant that oversees the entire process, with the injured worker and his needs at its core.

 

 

 

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 .

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

You’re Fired! Using Employment Releases in Work Comp Settlements

You’re Fired! Using Employment Releases in Work Comp SettlementsMany workers’ compensation cases that are settled include the voluntary resignation of the employee.  When this is the case, the employer/insurer request the employee sign an employment resignation and release document as part of the global agreement.  Failure to understand this process can result in added costs and missed objectives any settlement.

 

 

Meeting Expectations and Avoiding Miscommunications

 

The employment resignation and release is a legal contract between the employer and employee.  Given the nature of this agreement, it is outside the scope of a workers’ compensation insurance policy.  This adds to the complexity of settling a claim that includes employment law issues and requires each party to understand their proper role:

 

  • Defense Attorney: Attorneys representing the employer/insurer need to consider many   These factors include the scope of their representation in the claim and understanding of the law in employment matters.  Any misstep can result in unwanted malpractice claims and professional conduct or ethics violations;

 

  • Insurance Carrier: Members of the claims management team need to be in communication with the employer regarding the resignation of an employee as part of a global workers’ compensation settlement.  The consideration or money paid under an employment release is not covered under the workers’ compensation insurance contract;

 

  • Employer: Representatives from the employer need to remember adequate consideration in a release makes an employment law release a binding contract.  They also need to communicate their expectations to the insurance carrier and defense attorney regarding materials terms and conditions of the agreement.  They can also be expected to pay for legal services rendered for the preparing of the release; and

 

  • Employee’s Attorney: Monies paid under an employment release is taxable income under the Internal Revenue Code.  This tax needs to be fully explained to the employee.  There can also be considerations for potential legal malpractice and ethical violations if the expectations and terms are not explained fully to the employee.

 

 

The Basic Elements of an Employment Release

 

Given the contractual nature of an employment release, it needs to be in writing and have several key elements.  Failure to include these items can result in unnecessary and costly litigation:

 

  • Writing: All voluntary resignations and release agreements must be in writing.  It should outline how payments will be made and to whom it will be delivered.  The release should also include the timing of payments as there is usually a rescission period outlined by state law.  Payments should also be properly characterized for income tax purposes;

 

  • Monetary Consideration: The payment of money is a necessary component for such release – it is referred to as “consideration.”  This exchange is generally a nominal amount based on local custom and statutory guidelines, if applicable.  The employer is the party responsible for making this payment; and

 

  • Other Matters of Concern: A typical release includes discussion of other issues.  This discussion can include issues considering future reference letters, non-disclosure clauses (and what happens if material issues are disclosed to an unauthorized party) and “non-disparagement” agreements.

 

Mistakes in these areas commonly occur when lawyers with little understanding of employment law matters are involved in the drafting of voluntary resignations and releases.  It is also important to understand applicable state and federal laws such as the Fair Labor Standards Act, American with Disabilities Act and Family Medical Leave Act.

 

 

Waiting Periods and Settling a Work Comp Claim

 

The time frame for the rescission of a voluntary resignation and employment release is another important issue as they sometimes interfere with the settlement of a workers’ compensation claim.  As a general rule, parties should wait at least 21 days after signing a release before making payment per the workers’ compensation settlement.  Failure to understand this can cause a situation where a penalty arises.

 

 

Conclusions

 

Having the employee voluntarily resign from a position in a global workers’ compensation claim is something to consider as stakeholders seek to reduce workers’ compensation program costs.  When incorporating these agreements into a global settlement, it is important to avoid pitfalls that may arise when using releases.  All interested stakeholders should be aware, seek component legal advice and plan accordingly.

 

 

 

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.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

Case Study: $13,885.64 in Savings Through Resolution of Conditional Payment Recovery Dispute

Reduce your workers' comp case studyComplying with the ever-changing rules and regulations covering Medicare Secondary Payer issues is challenging enough, but adding in the complex conditional payment resolution and recovery process could push a workers’ compensation payer off the deep end.

 

Unless you strictly follow all the requirements of this system, you risk a referral for collections to the U.S. Department of Treasury. Knowing when to call in an expert is a good bet to keep you out of the government’s crosshairs.

 

 

Conditional Payments

 

Medicare does not pay for medical services or treatments which it believes are the responsibility of another entity, such as workers’ compensation. In those cases, Medicare is the secondary payer involved.

 

A conditional payment occurs when there is evidence that the other entity, workers’ compensation, has not promptly paid the bill. Medicare will then make the payment on the condition it will be reimbursed once the other entity does pay.

 

The responsibility for collecting the reimbursement rests with either of two entities; the Benefits Coordination & Recovery Center (BCRC) or the Commercial Repayment Center (CRC), which issues a demand for the repayment. If the debt is not paid or appealed to Medicare within 180 days, it is referred to the Treasury Department for collection.

 

 

Collecting the Debt

 

The Treasury Department has a number of methods to collect on debts owed to the federal government. For example, there are

 

  • Demand Letters
  • Telephone calls to the debtor
  • Administrative wage garnishment
  • Credit bureau reporting
  • Private Collection Agencies (PCAs)

 

One other avenue is the Treasury Offset Program or TOP. This program allows the Treasury Department to offset a federal payment to the debtor and use the offset to pay the debt.

 

For example, if the debtor is owed a tax refund, the money it will be taken from the refund.  Or, if the debtor is receiving a grant or rent money from the federal government, it will be taken out of this payment.

 

This system can create major headaches for carriers or a self-insured employers’ accounting departments, as less money than expected is received from the federal government. The result is the claims department, or risk manager gets called in to explain why the federal government is deducting these amounts as a result of a workers’ compensation claim and why the matter was not handled timely to avoid this issue.

 

 

Case study (provided by Towers MSA Partners); Resolving a Conditional Payment Dispute

 

 

Challenge

 

In this particular case, a self-insured real estate investor leases property to various entities, one of which is the federal government for a U.S. postal office. An employee of the real estate investor — unrelated to the U.S. post office — had suffered a work injury which was resolved and approved by a worker’s compensation judge. A few years post-settlement, Medicare issued a Conditional Payment Notice and demanded reimbursement of its lien for $14,026.00. The matter was referred to the Department of Treasury for collection, which applied the TOP and withheld federal funds owed for the rent for the postal office space.

 

Total MSA exposure = $14,026.00

 

Solution

 

After reviewing the details of the claim and the demand for reimbursement by Medicare, Tower’s legal team determined an appeal of the entire conditional payment amount was justified because the charges were unrelated to the work injury. The matter moved from the Department of Treasury back to the CRC, which concurred with the appeal that the charges were not related to the work injury, and therefore, not the responsibility of the employer.

 

Results

 

CRC agreed with the rationale and determined the payments were appropriately paid by Medicare. Also, the funds previously held by the Department of Treasury have been returned to the employer.

 

Total Savings = $13,885.64

 

 

Conclusion

 

Complying with Medicare requires continuous attention to the program. While the government has made some changes over the years to simplify the process, you must still engage Medicare in this process

 

Conditional payments can be tricky as there are specific deadlines and failure to meet them creates problems for workers’ compensation payers, as seen here, with Treasury Department collection actions. Medicare will generally remove unrelated charges from its demands, but it requires payer action to have the charges removed.  So, it is especially important to verify that all conditional payments are related to the claim before settlement.

 

 

 

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 .

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©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.

Professional Development Resource

Learn How to Reduce Workers Comp Costs 20% to 50%"Workers Compensation Management Program: Reduce Costs 20% to 50%"
Lower your workers compensation expense by using the
guidebook from Advisen and the Workers Comp Resource Center.
Perfect for promotional distribution by brokers and agents!
Learn More

Please don't print this Website

Unnecessary printing not only means unnecessary cost of paper and inks, but also avoidable environmental impact on producing and shipping these supplies. Reducing printing can make a small but a significant impact.

Instead use the PDF download option, provided on the page you tried to print.

Powered by "Unprintable Blog" for Wordpress - www.greencp.de