Surveys Results: People Often Regret Choice of Lump Sum Settlement

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


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



Many Not Aware Of Structured Settlements


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


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


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



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


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


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


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


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


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


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



More Than 50% Said Never Informed of Option


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


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



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


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



Lump Sum Chosen for Perceived Financial Independence & Pay Large Debts


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


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



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


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


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


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





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


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



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



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.

Case Study: Obtaining a Legal Zero MSA

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


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



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


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





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


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





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


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


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





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


Savings achieved in this case totaled $169,053





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



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



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.

Leverage Emotional Intelligence For Successful Claim Settlements

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


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



Emotional Intelligence In Settlement Process


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


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


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



Settlement to Address Immediate and Future Needs


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


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



“Color in the Quotes”


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


“Engage a structured settlement professional, today.”



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


Denied Claim Zero MSAs: Still Available, But Put Through Wringer by CMS

In October 2016, CMS made an unannounced policy change which effectively eliminated the ability to obtain a Zero MSA approval from CMS based upon a complete denial of the claim, without a supporting judicial decision. After only a couple weeks, CMS withdrew this policy change and again allowed for approval of Zero MSAs based solely upon a complete claim denial. Nonetheless, these Zero MSAs reviews are placed through the proverbial wringer by CMS such that it is important to understand when a case meets the criteria for a Denied Claim Zero MSA and the documentation required to obtain CMS approval.



Denied Claim Zero MSA Approval Criteria


A Denied Claim Zero MSA (or Legal Zero MSA) approval from CMS is available when the claim has been completely denied with no medical or indemnity payments having been made with the exception of medical payments made for non-treatment purposes such as IMEs, case management and medical records copies (Note, in certain limited situations a Zero MSA may be approved with medical treatment payments having been made. Please consult with Tower MSA).


Importantly, CMS will not approve a Denied Claim Zero MSA if settlement is made final and/or a settlement payment or any medical or indemnity payment is made prior to CMS approval of the Zero MSA. A tentative or agreed to settlement is allowable, but please do not make the settlement final or make indemnity or medical payments prior to CMS approval of the Zero MSA.


If the case meets this criteria, then CMS has strict documentation requirements which must be adhered to or the Zero MSA will be rejected. Notably, since the policy change and rollback occurred in October 2016, CMS has added a requirement to provide claim reserve documentation. The requirement for claim reserve documentation, as well as all other supporting documentation, is detailed below.



Denied Claim Zero MSA Documentation Requirements


The following documents are required by CMS to obtain approval of a Zero MSA based upon a complete claim denial:


1. Claim Payment History


  • A claim payment history printout, even if blank, representing payments since the inception of the claim. All payments must be itemized.
  • Printout must be divided into categories for medical, indemnity and expenses with subtotals for each category and a grand total listed. Print or run date listed on the printout.
  • Date range for listed payments – Must be since inception of claim.
  • If the Claim Payment History does not meet the above requirements, then the following rules apply:


Provide a copy of the available Claim Payment History with the following statement inserted, signed and dated in the document:
This document provides a complete representation of all payments made on the life of the claim (including medical of $0* and indemnity of $0)



*If medical payments were made, provide the invoices or reports, i.e. IME report, associated with those payments and see below Financial Detail and Denial Letter requirement.


  • Letter providing an explanation why a Claim Payment History meeting CMS’s requirements is not available (See below Financial Detail and Denial Letter)


2. Claim Reserves


  • A Claim Reserves printout divided into categories for medical, indemnity and expenses with subtotals for each category and a grand total.
  • Print or run date listed on the printout.
  • If there is a legal argument for claiming the reserve information is privileged then the legal argument, including citations to statute or case law must be provided along with a copy of a redacted (reserve information blacked out) version of the Claim Reserves printout.
  • If no reserves were placed on the claim, then a statement regarding the same.


3. Draft or final settlement documents and court orders or rulings or a statement that no such documents exist
(See below Financial Detail and Denial Letter).


4. First Report of Injury or a statement that no such document exists (See below Financial Detail and Denial Letter).


5. Financial Detail and Denial Letter – Tower MSA will provide draft letter upon request for submission of the Zero MSA to CMS


  • A statement indicating the claim was completely or fully denied with no medical or indemnity payments having been made.
  • If medical payments have been made for non-treatment purposes, i.e. IME, case management, medical records requests, then if the Claim Payment History does not properly explain the purpose of these payments, then provide an explanation for the payments.
  • If the available Claim Payment History does not meet the requirements under #1, then state that the carrier’s claim system does not have the ability to provide a Claim Payment History printout with the information requested by CMS, i.e. print date, subtotals for medical, indemnity and expenses.
  • If Claim Payment History did not meet the requirements under #1, then insert the requested information into the letter, i.e.list categories for medical, indemnity and expenses with subtotals for each category and a grand total.
  • If there are no draft or final settlement documents and no court orders or rulings, then a statement regarding the same.
  • If there is no First Report of Injury, then a statement regarding the same.
  • Letter must be placed on letterhead and hand signed.


6. Consent to Release form executed by claimant


While CMS places Zero MSA submissions based upon a complete denial through the wringer, these approvals remain available for workers’ compensation cases meeting the applicable criteria.



Author Rita Wilson, CEO, Tower MSA Partners, LLC. Rita serves as CEO of Tower MSA Partners, LLC. With more than 20 years in leadership positions in pharmacy software development and workers’ compensation managed care, Rita brings a wealth of expertise in information technology solutions and performance metric evaluation. Contact Tower MSA Partners at or (888) 331-4941

5 Structured Settlement Scenarios You May Not Be Utilizing

A structured settlement creates a ‘win’ for all parties to a workers’ compensation settlement; the employer, the payer, the injured worker, and the attorneys. So when is the right time to use a structured settlement?  Conventional wisdom is that structured settlements should be used as a financial tool when the settlement value reaches an arbitrary number such as $100,000.  This business-as-usual approach has made countless workers’ compensation programs engage in practices that only drive up the cost of doing business and have a negative impact on their bottom line.  Now is the time to reconsider your approach as to the right time to use and consider a structured settlement.



What is a Structured Settlement?


A structured settlement is a valuable piece of a comprehensive claim settlement strategy.  The claimant will receive the full value of their settlement over a period of time via a combination of a one-time lump sum payment paid at the time of settlement, plus annual annuity amounts.  Structured settlements come in various forms and can include the following payment mythologies that meet a desired end.


  • Deferred Lump-sum Payments, which include larger than the regular periodic payments via a schedule paid at pre-determined dates;
  • Flexible Settlement Plan, which allow flexibility for claimants requiring various special needs; and
  • Period Certain Annuity, which typically include larger periodic payments that end at a date or age certain.



5 Structured Settlement Scenarios



1. Realizing Cost Savings in Low Dollar MSAs


Consider the scenario with a forty-six year old employee who is currently a Medicare beneficiary.  He sustains a low back injury, disputes arise in the claim, and litigation occurs.  The matter is ultimately resolved with an MSA allocation of $38,893.


Using a structured settlement in this case allows the insurance carrier to realize substantial savings.



Benefit Cost Guaranteed Yield Expected Yield

Cash to Set Up MSA








Annual Payment to Replenish MSA Account*

$22,357 $0.00 $36,529









* Settlement Based on CMS Approval Male, Date of Birth 9/19/1969 Rated Age: 50. $1,141.00 per year beginning 1 year from approvals, payable for 32 years, only if living


**Example provided by Ringler



Proposed Total MSA Amount:


Cost of Seed & Annuity Payments:


Savings Realized using Structured Settlement $14,179.00


Using a structured settlement relies on an annuity mechanism that guarantees a rate of return on the money invested via a life insurance program.  In this case, the workers’ compensation insurance carrier does not pay the full allocation amount.  Instead, they pay only $24,714 to fund the full MSA, resulting in savings of $14,179.



2. Alleviate Injured Worker’s Future Medical Challenges


Convincing the injured worker to settle can be a challenge. However, keeping the case open can often be much more problematic due to future medical issues. The insurance carrier’s Utilization Review guidelines must constantly oversee the medical care.  This often results in significant frustration from system friction, red tape, and denials of treatments and medications.


A structured settlement for future medical costs, working in partnership with a professional administrator, can give the injured worker the freedom to manage their medical treatment how they wish. The professional administrator sets up a dedicated bank account and gives the injured worker a unique card to use at his pharmacy and doctor’s office. The injured worker never touches the bill, receives discounts from bulk pricing, has freedom of choice, as well as security and peace of mind that his future medical issues will be handled appropriately and timely.



3. Bridge The Gap In Settlement Negotiations


Settlement negotiations often stall due to a difference in opinion on the value of the claim.  A common example is where the claims professional evaluates the settlement at $300,000, while the employee’s attorney, demands $400,000 to settle the claim. The claims professional and the employee’s attorney may be able to bridge the gap with a structured settlement.


A structured settlement bridges the gap with the injured employee receiving $400,000 while the insurer pays $300,000 (slightly more or slightly less) to be invested with a life insurance company in an annuity. This is possible with a structured settlement as the amount of the settlement is paid out over time with periodic payments. The injured employee and the employee’s attorney will receive the $400,000 over the time span set in the structured settlement (either the employee’s life time or a specific number of years).



4. Peace of Mind for Permanent Partial or Permanent Total Disability


Anytime an injured worker experiences a permanent partial or permanent total disability it creates an immeasurable impact on their life and that of their family.  In addition to ongoing medical expenses, the loss of the income raises questions about immediate needs, such as modified vehicle replacement and home modifications. There can also be additional concerns about long-term expenses such as college funding for children.  Structured settlements can be used to pay for these and other bills, providing a comfortable lifestyle for the family following a workplace injury.



5. Eliminate Contingency-Fee Attorney Income Peaks & Valleys


Many attorney’s work on a contingency fee basis resulting in significant peaks and valleys in income based on the outcome of their cases.  An attorney who leverages a structured settlement for their fees can set up a deferred compensation plan guaranteed to cover their annual operating budget, and freeing the attorney to focus on current and new cases.





It is rare that an injured worker — or anyone — has the money management skills and discipline to make a large sum of money last a lifetime, especially when there are medical issues to consider. In fact, research shows most people have depleted the entire lump sum after just 5 years. A structured settlement can give a guaranteed, tax free income stream for life.


Now is the time to reconsider your approach in how you are using structured settlements. A structured settlement provides the necessary “win” for all parties and can provide significant savings to every workers’ compensation program.



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



Workers’ Comp Roundup Blog:

Live Stream WC Training:


©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.

Identify and Realize Medicare Set-Aside Savings Opportunities

The rising costs of workers’ compensation come in many different forms.  One such way members of the claims management team are seeing these increases is in Medicare Set-aside allocations and future medicals.  This issue presents a challenge for all teams and to meet this challenge a MSA service provider should be utilized that employs creative tools to reduce an allocation in a reasonable and ethical manner.  One such mechanism is the use of physician intervention by following up with the employee’s treating physician to confirm the accuracy of all treatments and prescriptions drugs in the allocation.



Back to the Basics of MSA Allocation Preparation


There is a certain art to preparing and writing a MSA allocation.  This includes the threshold matter of ensuring the allocation is reasonable, and will be accepted if it is sent for voluntary review and approval by CMS.


When writing an accurate MSA allocation, the person preparing the report will rely on some or all of the following materials and records:


  • All medical records for the last two years of treatment related to the WC claim*;
  • A complete claim payment history record from the insurance carrier;
  • A separate pharmacy payment history report;
  • Draft settlement documents, prior settlements, court orders and decisions and other legal documents;
  • A First Report of Injury; and
  • Explanation of accepted, disputed and denied body parts, along with ICD-10 codes.


* “Treatment records” consist of all medical records for treatment to the claimed body part or condition even if the employer or carrier did not pay for the treatment.  Also, CMS does not consider an Independent Medical Examination report a “medical record” for purposes of allocation review and approval.



Cost Drivers in MSA Allocations


Medical costs in workers’ compensation claims continue to rise with a large portion of future medical tied to pharmacy costs. A September 2016 NCCI research brief states “for every $100 of medical services paid on claims older than 10 years, approximately $45 to $50 will be for prescription drugs.” This leads to an increased future medical component that must be considered as a part of every settlement.  Members of the claims management team should monitor their files for the following issues:


  • Pharmacy savings opportunities: Medications that are prescribed, but never actually filled by the employee, prescribed medications that have been discontinued, and brand name drugs that can be replaced with generics.


  • Medical savings opportunities: Ongoing and prolonged treatment by a primary care doctor for injuries that should require a specialist, gaps in a patient’s medical record and treatment recommendations which are no longer considered viable, such as a spinal cord stimulator.



Physician Intervention – Brand vs. Generic Drugs


There are many opportunities for members of the claim management team to reduce the cost of a MSA allocation and promote a culture of settlement.  One such strategy is directly contacting the employee’s treating physician to follow up on medical cost driver red flags and savings opportunities.  As a note of caution, this should be done in conformance with federal and state law and may require the approval of the injured worker.


A classic example of when direct physician intervention is appropriate comes after a review of prescription records.  Often the physician prescribes a certain brand name medication versus a therapeutically equivalent generic.  While not always the case, generics are often considerably less expensive and offer the same medicinal attributes as the brand name.


An experienced MSA service provider will notice this opportunity by reviewing the “dispense as written” (DAW) codes in medical and pharmacy records.  They will position your file for the cost-saving measure to recommend direct contact with the physician to revise the prescription for the cheaper alternative.  Communication between the parties allows the necessary change to occur.  The cost savings will be realized once that cheaper alternative is filled by the pharmacy and a paper trail is created.  This allows the allocator to document the file and justify the lower prescription drug costs.



Physician Intervention – Discontinued Medications


Another opportunity for MSA cost reduction is to identify and confirm the discontinuation of medications previously prescribed.


Medicare Set-asides: A Case Study



*case study provided by Tower MSA Partners



The main cost driver in this MSA allocation was the cost of prescription drugs.  In the above example, a review of the pharmacy recorded revealed Amitiza, Pantaprazole, and Meloxicam were prescribed, but had not been filled for an extended period of time. This represented a significant opportunity for savings by directly following up with the treating physician in writing to confirm these prescriptions had been discontinued. This confirmation allowed the prescriptions to be removed from the allocation, resulting in $200,113 in savings.





The ever-increasing price of medicals on workers’ compensation presents a series of challenges for the claims management team.  In order to avoid over-allocating for treatment and prescription medications, leverage a proactive MSA service provider to identify MSA savings opportunities and intervene with the treating physician.  This proactive approach often results in a lower MSA allocation with realized cost savings to the claims management team.



For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.


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



Workers’ Comp Roundup Blog:

Live Stream WC Training:


©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.

3 Indicators Open Work Comp Claims Are Ready to Settle

Spring is in the air—time to do some spring clean.  This should not be limited to your home.  Use it as an opportunity to employ creative settlement strategies and close out those troublesome files and legacy claims that have been collecting dust in your claims department.



How to Get Started?


The first step in the process is to identify cases that are prime for settlement.  This should start with a review of all open files.  Indicators that a workers’ compensation file might be ready for settlement include:


  1. Cases where the employee is at, or should be at maximum medical improvement (MMI)/end of healing period. Identification of this factor includes evidence of a healing plateau or continued medical care without improvement of symptomology.


  1. Cases where the employee is nearing the end of entitlement for temporary total disability benefits or other wage loss benefits. Most jurisdictions cap the number of weeks an injured worker is entitled to various indemnity benefits.  It is important to review these cases for settlement as it could very well morph into a claim for permanent total disability benefits or costly retraining benefits.


  1. Cases where the employee has recently or will become eligible for Social Security Disability and/or Medicare benefits. Entitlement to these benefits drives claims toward the contention the employee is permanently and totally disabled.  These files require an analysis for exposure regarding future medical benefits, including the recommendation for a Medicare Set-aside (MSA).


Once you have identified claims ready for settlement, it is important to contact the employee or their attorney regarding settlement.  What do you have to lose?  Nothing!



Settling Troublesome Cases: Time to Think Outside the Box


Settling a workers’ compensation case is like making a sales pitch.  Preparation is key.  This includes thinking of the various alternatives and developing a strategy.  There are also several tools the proactive claims management team has available to kick-start settlement discussions.


  • Independent Medical Examinations (IME): Scheduling an IME is a great opportunity to move a case toward settlement.  This can be especially useful for legacy cases where the employee’s treatment has been inconsistent or sporadic.  The findings from an IME can also be used to initiate litigation with the intent of moving the claims file toward settlement.


  • Mediation: This is one of the most underutilized tools in workers’ compensation.  Mediation allows for all interested stakeholders to have a voice and role in settling a claim.  It can also be beneficial to understand the concerns of an injured employee and tailor a settlement to suit their needs.


  • Structured settlements: This tool can be used effectively in many instances—not just high value settlements.  The employee receives the full value of their settlement, which is paid out over a period of time via an annuity.  There is built-in “savings” when using this tool the insurance carrier receives based on the actual cost of purchasing an annuity contract.  All parties receive “free” advice and services as the broker who prepares the quote and necessary paperwork is paid via commission from the life insurance carrier who initiates the annuity.


  • Medicare Set-asides: Failure to settle cases involving Medicare beneficiaries (or those soon to be entitled) is driven mainly by an irrational fear of being reasonable.  This excessive caution can lead to delay and lost settlement opportunities.  Using a service provider to evaluate the risks is helpful.





It is time for spring cleaning in your claims department.  Now is the time to dust off your troublesome files and think about settlement.  This requires interested stakeholders to review their files, engage the other side and use creativity to drive settlements.



For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.


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



Workers’ Comp Roundup Blog:

Live Stream WC Training:


©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.

CMS Provides Another Piece of the Puzzle on Future LMSA Policy

While the Centers for Medicare and Medicaid Services (CMS) has yet to formally issue a policy regarding review of Liability Medicare Set-Asides (LMSAs), since a June 2016 announcement that it was considering expanding the WC MSA review process to liability and no-fault, CMS has nonetheless provided pieces of the puzzle which will ultimately make up a liability and no fault MSA review process. The most recent piece of the puzzle is an announcement by CMS that effective 10/1/2017, no Medicare payments are to be made to medical providers where a Liability Medicare Set-Aside (LMSA) or No-Fault Medicare Set-Aside (NFMSA) exists.



Directive To Deny Payment For Care Covered Under LMSA or NFMSA


The announcement comes via the issuance of a CMS MLN Matters article directed to physicians and other medical providers submitting claims to Medicare Administrative Contractors (MACs) for services to Medicare beneficiaries. It directs these MACs to deny payment for medical care that is covered under an LMSA or NFMSA as identified in the Common Working File (CWF).


To clear up some of these technical terms, MACs process Medicare Part A and B payments to medical providers on behalf of Medicare. A Common Working File (CWF) is maintained by the CMS Benefits Coordination and Recovery Center (BCRC) and contains information on a particular claimant’s Medicare eligibility and, importantly, when Medicare should be considered secondary such that payment to a medical provider should be denied and directed instead to the primary plan.


BCRC presently keeps records of all WCMSAs that have been approved by CMS and funded through settlement (This is why CMS requires final settlement documents be submitted to BCRC post-settlement). The WCMSA funding information is placed in the CWF so that the MACs deny payment for medical care associated with the WCMSA until the WCMSA is exhausted. This directive from CMS makes this same process applicable to LMSAs and NFMSAs.



How Can Medicare Deny Payment Based on Processes That Don’t Exist?


In response to this announcement, you would be correct in asking, how can CMS deny payment for medical care based upon an LMSA an NFMSA process that does not yet exist? Putting aside that some CMS Regional Offices have reviewed and approved LMSAs at their own discretion for quite some time, this does pose a very good question. CMS responds as follows:


CMS will establish two (2) new set-aside processes: a Liability Medicare Set-aside Arrangement (LMSA), and a No-Fault Medicare Set-aside Arrangement (NFMSA).



New Set-Aside Process Will Be Put In Place At Future Date


So CMS readily admits the new set-aside processes will be put in place at some point in the future. Such future date has already been tentatively set based upon CMS’s release, in December 2016, of its request for proposals for the new Workers Compensation Review Contractor which includes an optional provision to expand reviews to LMSAs and NFMSAs effective July 2018 (See prior blog post: CMS MSA Review Expansion to Liability Planned for 2018). Consequently, this directive to the MACs is implementing medical payment processing changes which will be required to be place once the LMSA/NFMSA review process is made available.


It is important to keep in mind that CMS has yet to release any guidance on such an expansion of the WCMSA review process to liability and no-fault and particularly how such a process would differ from that created for WC. Also note that CMS does not state that effective 10/1/2017 the MACs are to deny payment for all post-liability settlement injury-related medical care, rather, they are to “deny payment for items or services that should be paid from an LMSA or NFMSA fund.” The funds must exist for denial to occur. Accordingly, over 2017, as more pieces of the puzzle come together on CMS’s Liability and No-Fault MSA review policy, Tower MSA will provide further interpretation and guidance on what will be one of the most significant developments in MSAs since CMS formalized the WC MSA review process in 2001.




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


In a Volatile Political Climate MSAs & Professional Administration Provide Much Needed Assurances

These first few of months of 2017 have been, to put it mildly, volatile in national politics.  The incoming Trump Administration and a Republican Congress are poised to tackle the federal budget, Medicaid, and the Affordable Care Act (Obamacare) among many other federal programs.  All of these issues have sharp partisan divides, however no matter where your views lay on the political spectrum, if you are a professional involved in the workers compensation industry, these issues may have a big impact on how you can be successful at your job.


This article looks at what impact the Trump administration and a Republican-controlled Congress may have on Medicare Set-Asides (MSAs) in the context of the legislative and regulatory history of the Medicare Secondary Payer (MSP) Act and how the uncertainty resulting from potential changes to federal healthcare programs results in MSAs and professional administration being even more relevant in the settlement of workers’ compensation cases.



The MSP Act Has Been and Remains Bipartisan


A review of the history of the MSP Act demonstrates a noticeably bipartisan effort to improve and expand its applicability and enforcement mechanisms.  The MSP Act was enacted in 1980 during President Carter’s administration.  Subsequent to its passage, provisions were added over the Reagan, George H.W. Bush and Clinton administrations, all emphasizing Medicare being secondary to group and non-group health plans.  The most notable legislative expansion occurred in 2007 when a Democratic-controlled Congress passed, and President George W. Bush signed into law, the Medicare, Medicaid and SCHIP Extension Act which included Section 111 Mandatory Insurer Reporting provisions for group and non-group health plans.  There also continues to be a decade long effort to pass bipartisan legislation which would implement certain reforms to the Workers’ Compensation Medicare Set-Aside (WCMSA) review process.  While the most recent WCMSA reform bill died in the last Congress it is expected a new bill will be reintroduced in 2017.


Besides legislative expansion of the MSP Act, during President George W. Bush’s administration there occurred the release of the July 23, 2001 CMS memo, commonly called the “Patel Memo.”  The Patel memo and subsequent CMS memos effectively formalized a process for CMS to review and approve WCMSAs.


MSA reviews continued, Medicare conditional recovery processes expanded and Section 111 was implemented all during the course of President Obama’s administration.  The only legislative change to the MSP Act occurring during the Obama years was the passage of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (SMART Act) which was a successful bipartisan effort to address deficiencies identified in the MSP Act, particularly Section 111 reporting and Medicare conditional payment recovery.


Since the enactment then of the MSP Act in 1980 it has continued to be expanded and enforced consistently across both Republican and Democratic Presidents and Congresses.


Why has there not been a partisan divide? The simple reason is that the MSP Act forces entities other than the federal government to pay which has benefits for both political parties. For Democrats it demonstrates their protecting the viability of a federal government entitlement program while for Republicans it demonstrates their protecting taxpayers by shifting costs away from the government. While the Trump administration has to our knowledge never issued any MSP policy statements, based upon the past bipartisanship on this issue, our expectation is the administration will continue and possibly expand the MSP compliance programs at CMS.



Uncertainty Over Federal Healthcare Programs to Drive Assurance with MSAs


President Trump has indicated repeatedly that he will not reduce benefits to Medicare beneficiaries.  Nonetheless, Medicare beneficiaries are facing premium increases. Notably, a Kaiser Family Foundation report indicated Part D premiums are rising by an average of 9% in 2017.  As for Medicaid, the Trump administration is supporting a block grant program which would give more discretion to the states in formulating and implementing their own Medicaid programs compared to the present process which includes significant federal oversight.  Finally, and most significant, is the Republican-led initiative to “repeal and replace” the Affordable Care Act, commonly known as ObamaCare. These potential changes to statutory programs create uncertainty for injured workers contemplating settlement of medical in their workers’ compensation cases.


Uncertainty for injured workers exists with programmatic changes to Medicare and private group health plans which are increasingly driven by a more value-based approach to healthcare delivery.  A value-based approach provides incentives to medical providers to be more cautious with prescribing treatments and medications which may have limited value to the patient.  This is also usually tied in part to a utilization review process which places limits on care through the use of evidence-based medicine.  While in the past some injured workers have settled medical stemming from their work related injury confident that they could shift their ongoing work-related care, if any, to their group health plan, such coverage may now be limited.  And when it comes to shifting costs to Medicare, CMS’s long-standing policy is such costs must be accounted for in an MSA.



A Flight to Certainty


Accordingly, injured workers and their attorneys when settling their workers’ compensation cases will look for certainty where it can be obtained so that they have the assurance of access to medical care for their future injury-related care.  For claimants who are Medicare beneficiaries or are close to becoming Medicare beneficiaries, such assurance can be obtained by a properly allocated MSA which is CMS-approved, when necessary, and professionally administered to maintain the MSA funds over life-expectancy in compliance with CMS rules.


A best-in-class MSP Compliance company will provide employers and claimants a reasonable MSA allocation which, along CMS guidelines, properly accounts for future injury-related and Medicare-covered medical care without unnecessary overfunding.  This often includes the company reaching out to treating physicians to confirm current care regimens or clarity regarding ongoing medication and treatment prior to submission of the MSA to CMS.


While CMS approval of the MSA and subsequent funding provides assurance at the point of settlement that funds for injury-related medical have been provided, equally important is proper administration of those funds such that an injured worker can be assured the funds for his or her care will last over their life expectancy and that there will be a seamless transition to Medicare for payment if the funds every run out.


Professional MSA administration can secure the injured party discounts on their medical treatment, and prescription costs. All the while they are free from utilization review allowing them to not have to worry about their treatment being rejected. Additionally, professional administration can make sure all MSA expenses are accounted for in the eyes of Medicare.  These programs are in place to protect the injured worker post-settlement and ensure compliance with CMS requirements for MSA administration.


In this current era of high uncertainty, all parties can rest easy by focusing on known methods to protect themselves and the injured party throughout the claim handling and settlement process.  That’s why many believe it is more critical than ever to obtain an adequate MSA that will cover the ongoing medical care of the injured party and, upon settlement, to have a professional administrator help the injured party make the funds last as long as possible and do all the required Medicare reporting.


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


Author Porter is the Chief Strategy Officer of Ametros. Prior to Ametros, Porter worked in corporate development, private equity investing and as an investment banker. He has experience leading acquisitions, launching new products and building the teams to support them. Porter has a passion for directing the growth strategy of rapidly growing businesses in the healthcare and financial services industries.

2 New Tricks for New Workers’ Comp Claims

Published originally on February 6, 2017 on WorkComp Wire


As discussed in last week’s article, old dogs can be taught new tricks. A proactive settlement initiative can not only get legacy claims off the books, but it can also dramatically reduce costs and improve patient care. In one case, a man who suffered a minor back injury at work more than 25 years ago was weaned off fentanyl, hydrocodone, and several other drugs. The claim’s pharmacy spend went from $1,200 to $600 a month and a settlement is planned.


An employer that inherited legacy claims in an acquisition initiated an aggressive settlement program that produced $6.5 million savings on 43 MSAs during a 10-month period.


Yes, the settlement initiatives produce excellent outcomes for old dog claims. But the lesson here is that these so-called new tricks are available throughout claims handling. Adopting a settlement mindset from day-one can prevent claims from spiraling out of control and becoming old dogs. Think of the medical and indemnity cost savings as well as litigation costs that can be saved as a result of settling these claims short of attorney referral.


Remember these two new tricks:


  • Proper medical documentation of a file results in better claims handling. If medical treatment records are missing from the file, prescription history is absent or inconsistent with the medical records, or medical care is left open ended, it is difficult to assess the appropriateness of ongoing and future medical care.
  • Pharmaceutical intervention does not need to wait. A claim must be consistently evaluated for the appropriateness of recommended and ongoing prescription medication use. The addition of opioids weeks into the claim is a red flag. Do not wait until on the brink of settlement negotiations to intervene on prescription medications use, do it now.


Clinical and legal partners must drive a successful outcome for employer and employee. Every stakeholder (nurse case manager, adjuster, pharmacy benefit manager, defense attorney, or physician) should watch for red flags and intervene themselves or relay issues to the claims handler to determine the necessary action plan to right the ship before the claim gets more difficult to control.


When pursuing a settlement initiative involving complex, “old-dog” claims, savvy payers price out future medical exposure, identify cost drivers, and decide which claims to settle right away and which warrant intervention. The smart payers also learn from these old dog claims and put best practices in place to address cost drivers early on in claims handling. What is the impact of pursuing such a claim strategy? Here are the results from an employer who converted an old-dog settlement initiative into a standard for new claims handling:


  • 29% reduction in open claims after one-year
  • 43% reduction in open claim after three years
  • 14% reduction in total costs after one-year
  • 26% reduction in total costs after three years
  • 40% reduction in attorney referrals after three years
  • 25% reduction in pharmacy costs after three years
  • 55% reduction in CMS-approved MSA amounts after three years


It’s never too early or too late for clinical intervention on a claim with the purpose of driving a successful resolution to the claim. While old dogs can be taught new tricks, the best strategy is to incorporate settlement initiative protocols into claims handling best practices.



About Dan Anders


Daniel M. Anders, Esq., MSCC is the Chief Compliance Officer for Tower MSA Partners. A certified Medicare Set-Aside Consultant and attorney, he oversees the Medicare Secondary Payer (MSP) compliance program. Mr. Anders is responsible for ensuring the integrity and quality of the MSA program and other services and products and he provides education and consultation to Tower MSA clients on all aspects of MSP compliance.


Mr. Anders is the former Senior Vice-President of MSP Compliance for ExamWorks Clinical Solutions and he has extensive litigation experience from his prior position with the Chicago law firm of Wiedner & McAuliffe. He holds a Juris Doctor from Chicago-Kent College of Law and a Bachelor of Arts degree from Loyola University Chicago.


Contact Mr. Anders at 847.946.2880 or



About Tower MSA Partners
Tower MSATower MSA Partners is a national provider of Medicare Secondary Payer services, including Section 111 Reporting and Conditional Payments along with Medicare Set-Aside preparation, submission and oversight. Its proprietary MSP Automation Technology Suite drives MSP compliance best practices and provides end-to-end visibility into each activity. Tower’s other services include pre-MSA Triage, physician peer reviews, MSA administration, medical cost projections, and life care plans. With more than 50 years combined experience in pharmacy, legal oversight and medical care, Tower proactively stages claims and works collaboratively with clients to identify issues and intervene to modify outcomes. Tower remains involved in the claims, through final resolution, MSA and/or other settlement. This model enables Tower’s clients to provide better care to injured workers, reduce claim and MSA costs, and obtain CMS acceptance of the MSA. For more information, visit and subscribe to Tower’s

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