Workers’ Compensation Costs Can Be Reduced by Implementing Operational Best Practices: Learn How With This New Guidebook.
A company that wants to implement a new workers compensation program or revamp an existing system will find this book helpful. Maybe your company has recently expanded and you realize the need to train a workers compensation manager or regional coordinators how to hold down compensation costs. Whatever your need, here is the answer:
Workers Compensation Management Program: Reduce Workers’ Comp Costs 20%-50%.
Used by more than 150 firms across the country, this is THE book to help every employer develop a more effective workers compensation program to reduce workers compensation costs. It is based on field research and decades of experience in workers compensation from all aspects of the business. Best practices are described in detail for each person in the injury process.
This easy-to-read manual has been updated for 2012. It now includes:
An index for quick topic look-up so you can view a term or a procedure and see all relevant references.
NEW – Workers Compensation Basics
Purpose of Workers Compensation
Who Pays for Workers Compensation?
Parties Involved in Workers Compensation
Benefits for the Employer
Independent Contractors
Benefits for the Employee
Injuries Covered
Types of Workers Compensation
How Losses are Categorized
How Losses are Reported
Calculating Your Premium
How Mod Effects Your Premium
Good/Bad Mod Example
Five Ways to Reduce Your Mod
NEW – Fundamentals of Cost Containment
Reasons Workers Compensation Costs are High
Who is in Charge?
Work Ability Form Properties
Who is Responsible for Managing Workers Compensation Claims?
Who is Responsible for Managing Workers Compensation Process?
Hidden (Indirect) Costs of Workers Compensation
Additional Costs
Calculating WC Costs
External Obstacles to Cost Control
Internal Obstacles to Cost Control
NEW – Working with Your Adjusters or TPA
Account Handling Instructions
MD Participation
NEW- Reporting a Claim
Critical Issues
Essential Intake Considerations
Nurse Triage
NEW- Directing Medical Care
Occupational Health Clinics
Remote Health Services
Directing Medical Care in California
NEW- Return to Work
What to Include in a Transitional Duty Policy
Non-Profit, Volunteer or Charitable Positions
Employees Who Never Return to Work
Coordinating WC with Federal and State Leave Statutes
NEW – Other Indemnity Cost Containment Services
Telephonic Disability Intervention
NEW – Medical Cost Containment
URAC Certification
Mental Health RNs
Chronic Pain Programs
An Aging Workforce
At Home Recovery Services
Medical Fee Schedules
Fee Schedule Coding
ICD-9 and CPT Codes
NEW- Physical Therapy and Physical Rehabilitation
Differences between Physical Rehabilitation Programs
Pharmacy Benefits Management Program
Authorized Drug Formulary
Toxicology Screening
NEW – Fighting Fraud and Abuse
Medical Terminology Used to Identify Malingering
Reviewing Investigation Reports and Videos
Avoid good Day/Bad Day Syndrome
NEW – Claims Resolution and Settlements
Conditional Payment and Final Demand
Pharmacy Component of MSA
California Settlement Process
A 183-page guide covering how to assess your workers compensation program, design program materials, roll out a program to the organization, and monitor and manage the program once implemented.
Written by a national expert on workers compensation cost containment with over 25 years experience helping companies reduce their losses 20% to 50%.
T. Ronca, a workers’ compensation defense attorney from Long Island, NY, said the
book is an invaluable desk reference. “It is one of the tools that should never be out of reach for a risk manager. Direct employer involvement with claims in the first weeks is the difference between success and failure. This manual will guide the conscientious employer through the pitfalls,” Ronca said.
What’s more, the book can be delivered with your company logo on the cover and a full-color ad for your company on the back cover.
Take it out to the field. Text tabs are available to put on each chapter and it is ready to go as your company training manual. All you will have to do is customize the Training Agenda that is in Part I of the book.
Included in the manual are topics such as: Return to work and transitional duty, claim reporting, employee communications, controlling fraud and abuse, directing medical care, medical cost containment solutions, post injury response procedures, reporting procedures, working with your carrier and third party administrator. There is information about physical therapy, pharmacy benefits management programs, training supervisors and gaining management commitment. It also contains concepts of claim settlement and resolution as well as safety and loss control. New areas are identified above.
There are 5 sample worksheets in the manual to help organize an efficient workers’ compensation program. These include: timetable for implementation, the injury coordinator job description, and several sample roll-out letters. We recently received a terrific phone call from a third-party administration firm saying how the manual provided an organized way to train clients at loss prevention and has helped their clients put "layers of better WC management" in place. Everyone benefited.
One large distribution firm wrote to us to say the chapter on safety and loss control led to a company-wide safety change that only cost a few hundred dollars but prevented a specific type of injury that had been draining its budget, says Rebecca Shafer, Esq., President of Amaxx Risk Solution, Inc. who authors the book. Shafer is a national expert on workers’ compensation cost containment with more than 25 years of industry experience helping many companies reduce their losses 20-50%.
When you order your copy of Manage your Workers’ Compensation Program from Advisen at
http://corner.advisen.com/wcbooks, the 183-page guidebook shows how to assess your program, design program materials, roll-out a program to the organization, and monitor and manage the program once implemented.
The workbook is also available with a customized front and back cover for bulk purchases. Discounted rates apply to bulk orders.
One company said, "After reading the manual, we took a look at past workers comp practices and saw that every department did things differently. Manage Your Workers’' Compensation Program 2012 gave us the guidance we needed to standardize our workers’ compensation programs across the country. It was like a pre-prepared lesson plan," according to the risk manager.
A regional hospital in North Dakota wrote that, "Our small company expanded rapidly and we actually didn’t have any official workers’ compensation program in place. This manual gave us step-by-step procedures from the first meetings with management to monitoring the final program. Buying and reading the book was almost like hiring another employee – one who was an expert in workers’ compensation."
Who Uses the Workers’ Compensation Book?
Risk Managers and Workers’ Comp Managers find it useful learning about the cost containment niche and use it for themselves and to bringing new team members up to speed very quickly. The book becomes a “lesson plan” tool.
Safety Directors use the book to train supervisors in workers’ compensation claims management. They learn more about their area of responsibility — post loss cost containment — adding to their overall knowledge. They also learn what to do after an injury and what steps are supposed to take place during the first 24 hours.
Brokers use it for prospects, as well as, to learn about specific aspects of cost containment, passing their knowledge on to their clients. For example, when discussing how to develop a return-to-work program and a client asks about, “off-site return-to-work programs,” the broker quickly finds the relevant section in the book, reviews it and passes the answer on to the client, along with a copy of the cost containment book with the broker’s logo.
Adjusters use the book to gain a better understanding of the employer’s perspective. Adjusters also want to learn more about cost containment to add to their overall workers’ compensation knowledge in order to grow their careers and stay abreast of new services.
Account Producers give the book to prospects during formal presentations to illustrate their company is on top of the workers’ compensation industry. The book makes an excellent client gift.
Vendors such as doctors, physical therapy networks, occupational clinics and medical management firms learn how their service might fit into the workers’ compensation marketplace, what is important to employers, and what they look for in medical services to enable the vendors to enter the workers’ compensation marketplace.
The manual is a cost-cutting tool to learn more about systematic and operational techniques for reducing workers compensation costs.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
Posted in
Claim Audits & File Review,
Communication with Employees,
Coordinating Medical Care,
Federal Workers Compensation,
Fraud and Abuse,
Insurance Issues, Rates, Premiums,
Lowering Premiums & Experience Mod,
Management Commitment,
Medical Cost Containment & Managed Care,
Medicare Set Asides (MSAs),
Professional Development Issues,
Return to Work and Transitional Duty,
Risk Management,
Safety and Loss Control,
Settling WC Claims,
TPA and Claims Administration,
WC 101,
WC in Other Countries (International) |
As a Risk manager, claims coordinator, agent, human resources representative — whatever your title may be, the name of the claims game comes down to reserves. Reserves are the tangible part of what an injury costs you, either directly out of budget, or as potential future increased premium costs. A lot of speculation and estimation goes into reserving a file, but a good percentage of the time when you try and come up with a number for a file you find yourself way too low. Why are the numbers that your adjuster recommends so high? What exactly do we have to cover as future medical cost, even though this claimant may no longer work for you? How do adjusters learn how to reserve?
1. It is the cost of the claim for “life”
When you think about reserving a file for the long term, you have to think long term. Not long term as in 10 years. Long term as in for the rest of that person’s life. In most states, if an injured worker needs long-term reasonable and necessary medical treatment for their injury, and the doctor relates treatment specifically back to that injury, then your company is probably responsible. You can get an IME (Independent Medical Review), or record review to fight why the recommended treatment is not related but, typically, the burden of proof is just causal relationship. If the patient can show the need for treatment relates back to the injury of 20 years ago, they have met their burden of proof. This is when these injuries can come back to bite you. Instead of settling 10 years ago because you thought the number was “too high,” now you are going to have to scramble to come up with a defense and, if it is indeed related, not only will you have medical costs but you may have wage-loss costs as well. (WCxKit)
The future is your biggest enemy in surgical claims with long-term exposure. Once surgery is performed, nothing is ever the same. Scarring, nerve issues, accelerated arthritis symptoms, the need for ongoing medication and doctor evaluations, diagnostic testing, etc. These things all lie in wait for the future. Sure, right now in 2011 the claimant’s demand of $100,000 may seem like a lot. But you have to break the file apart, and this is what the adjuster does. If your injured worker is 30 years old, you potentially have 55 years of exposure. If back surgery was in 2011, and the claimant is 30 years old, you have a ton of problems sitting there waiting for you. The claimant may be fine now and the surgery was a success. But what about 5,10,15 years from now? Will be needed another surgery? Maybe that one will not go as well. So consider the long term: The life of the claim, the life of your claimant, and the need for future medical treatment.
2. The injury requires potential future surgical risk
Surgical cases are major red flags for future problems, especially when some sort of hardware is implanted. Most of the time these people return back to doctors due to pain, usually due to hardware or screws becoming loose. Then this person has to undergo a procedure to have it removed. Then, they have to rehab from that, and then they can return to work. But, again, the issue here is when will the person need that hardware out? Some can live with it forever and never come back. Some come back in a year or two. Some have constant problems with it and it creates problems preventing them from making a full recovery from surgery.
Back surgery is especially risky. In the world of workers comp you do not hear about many success stories with major back surgery. It may lessen the pain, but it can create a ton of future issues. When you evaluate these claims and costs of settling them, be sure to account for future surgical risk. It is very costly, and very risky, and maybe you better get rid of that risk now if you can versus adopting a “wait and see” attitude.
3. The costs ongoing medications
If you pick up any newspaper you will run across a story about the costs of medications and how they are dramatically increasing. Each drug manufacturer has their reasons to increase price but, whatever the reason, the bottom line is prices are always going up. And if you have a claim where a claimant has to take ongoing medication for pain or nerve issues, those meds are typically not the cheapest ones. Sometimes generics are available and worth looking in to, but its still an ongoing monthly cost that can drag on for years. You can find out from your IME doctor if it is necessary for your claimant to continue taking these meds, how often they should be taking them, etc. That way you can properly estimate the future cost. But keep in mind to add in a percentage for inflation over the years, since prices show no indication of decreasing.
4. An MSA may be needed
Perhaps the biggest roadblock to settling a claim is the need for a Medicare Set-Aside (MSA). The MSA breaks down future cost for those who require future treatment while also being on Medicare or of retirement age. If your veteran worker sustains a major shoulder injury a year before retiring that is not good. Not only do you have to cover surgery and rehab on a veteran worker in your shop, but also, the chances for a good recovery are guarded, which means ongoing treatment could last for years. An MSA is needed if you want to move this case to settlement. MSA numbers are not small. There are several vendors who specialize in MSA reports and submissions, and they will tell you they are very costly once approved by CMS (Center for Medicare/Medicaid Services).
MSA’s are costly, speculative treatment estimations. And the key word here is “estimates.” There is no guarantee the claimant will need another surgery. But they may estimate it for you, and make you pay for one just in case. So maybe that is a scenario where you should not settle. It is something to discuss with your adjuster. The point is, be aware if an MSA is needed it is going to financially cost you to settle and resolve your risk involvement in this case.
5. The age/general health of the claimant matters
Obviously if a 22-year-old worker falls and breaks his neck, you have about 63 years of medical exposure. If your 67-year-old, part-time janitor falls and breaks his ankle, you have maybe 16 years of exposure. Age matters. The younger the claimant, the more severe the injury, the more costly it is going to be. Reviewing employees personal health histories correlates to cost as well. The healthier the person, the speedier the recovery and the less it may cost to get them back to full duty work.
It is hard to control genetics. Everyone is different and heals differently, but you can get a good idea about if someone is “healthy” or not. If you have seen your claimant in the past eating fast food and chain smoking during daily breaks or lunchtime, you know quick healing is probably not in that person's future.
Summary
The art of reserving a file for life expectancy is part science, part estimation, and part experience. Adjusters see the same injuries day in and day out. Sometimes they deal with poor healers and sometimes they deal with those who make a speedier recovery than planned for. This is why reserving a file for probable outcome is an art form. All you can do is look at the evidence and what the future may hold. If in doubt, aim for a higher rather than lower reserve figure.(WCxKit)
For your long, large claims, utilize the help of a life care manager or an MSA company. Talk about future medical needs and costs with your adjuster. Roundtable the file with your peers and see if you are missing anything. Ask your adjuster during your weekly roundtable meeting. If you don't have a weekly roundtable, it might be time to ask for one. It is complicated to think about every cost an injured worker may need between now and 40 years from now, but if you use the tools at your disposal you should be able to get an accurate, effective reserve for the life of the file. If you want to outsource this – and many do - to a an expert, consider the Life Care Planner services of your TPA or MSA company. Also, ask your adjuster for the Reserving Worksheet – this can clear up any problems.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com.
Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
A year ago, when LexisNexis published the first edition of Jennifer C. Jordan’s The Complete Guide to Medicare Secondary Payer Compliance, the book sold like hotcakes to attorneys and others in the MSP industry. The e-book version, which was launched in mid-2011, became one of the leading e-book sellers at LexisNexis.
It’s no surprise just how popular the guide book has become in helping its readers achieve MSP compliance in their insurance settlements. Jordan’s terse commentary on developing case law on MSP, along with complete coverage and analysis of all things MSP – from reporting to set-asides to liability claims, and everything in between – has made this guide book the go-to source for the MSP. Every lawyer should have this resource within arm’s reach because the “Practice Pointers” are invaluable. For example, the “FAQ’s In California” provides a practical application checklist. The manual contains both an overview, as well as, detailed legislative history about the act.
The 2011 edition, which was published in November, contains state-specific Workers Compensation Medicare Set Aside requirements for CA, FL, GA, IL, IN, KY, LA, MO, NJ, NY, NC, and PA. Kudos to Jordan for finding leading workers’ comp experts in each state to write what they know about best, i.e., medical benefits, settlement of medical benefits, and related state law and forms. It also contains many reference sources for those that follow the subject closely.
Jordan has also updated the book with discussion of hot topics and the latest developments in MSP law, including the SMART Act, Medicare Advantage plans, foreign insurers, reporting of Total Payment Obligations to Claimant (TPOC), date of injury for cumulative injuries, HIPAA, Medicare appeal process, prescription drugs – pricing mechanism, tapering, rehabilitation, off-label use – special needs trusts (SNT), Workers Compensation Review Contractor (WCRC), overpayments, liability Medicare-set aside (LMSA), and much more.
If that isn’t enough, the new 2011 Edition also contains 18 new case summaries with commentary written by Jordan, 23 new CMS memorandums, an updated CMS Manual, and the new Version 3.2 of the MMSEA User Guide.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com.
The Roundtable is a discussion platform for employers, business owners, risk managers, HR managers, insurance executives, and brokers. Here they talk about the obstacles in managing workers compensation and learn strategies to overcome them.
Clicking on the links below not only brings you to the articles listed, but also gives you an opportunity to become a LinkedIn member. Or, click
here to sign up.
CERTIFIED MEDICARE SECONDARY PAY
The CMSP credential is an advanced program designed to be the most comprehensive, cost effective program teaching Medicare Secondary Payer Compliance. While the CMSP program includes in depth discussion of the Medicare Set Aside process, it teaches much more. Class to be taught in the Loews Hotel in New Orleans, LA on Sept. 26-28, 2011. (WCxKit)
Social Security Disability Insurance (SSDI) is intended to replace lost income for people suffering from a disability that is likely to cause substantial long-term losses in earnings. A concern has been that SSDI may have a disincentive effect on the willingness of recipients to work — that is, that some SSDI beneficiaries would work if they did not receive benefits, say Nicole Maestas and Kathleen J. Mullen of the RAND Corporation.
Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
Read our members interesting answers.
Workers Compensation Roundtable is jointly managed by people dedicated to the concept that workers compensation is a manageable line on the employer’s expense ledger and informed professionals are empowered achievers. Workers compensation is not simply a cost of doing business; it is a cost that can be controlled. (WCxKit)
Beginning with an assessment of cost drivers, benchmarking data, and integrating the solutions, employers can reduce workers comp costs 20-50%. With proper information, professionals managing compensation claims can reduce costs and improve outcomes for all stakeholders in the process.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Fast changing and complicated laws relating to self-insured employers’ responsibilities under the Medicare Secondary Payer Act make it difficult for employers to keep up with the latest changes and regulations. There is one thing that is easy to understand – the Centers for Medicare and Medicaid Services (
CMS) are aggressively pursuing recovery of payments they have made from any viable source including self-insured employers.
Employers need to be aware of the risk involved when an injured employee is also a Medicare or Medicaid beneficiary. Any expense paid by CMS for workers compensation-related medical care can be recovered from the self-insured employer, even if the workers compensation claim has been settled and closed. Therefore, if the injured employee is collecting Medicare benefits for non-work-related medical expenses, the self-insured employer should verify that CMS has been paid for any medical cost they have incurred due to work-related medical care.(WCxKit)
In routine workers compensation claims, the employee treats with the medical provider and the medical provider submits the medical bills to the claims office or medical fee schedule reviewer where they are processed and paid. The workers compensation claims where the self-insured employer gets into trouble are long-term claims where the employee is treated by more than one medical provider and often for both a work-related injury and non-work related medical issues. It is almost a certainty that sooner or later the employee gives his/her Medicare or Medicaid card to the workers compensation medical provider, resulting in CMS paying for the medical care.
It is not enough to accept the employee's statement they have not used their Medicare benefits or they have reimbursed Medicare or will reimburse Medicare. All known workers compensation medical bills should be paid directly to the medical provider. When settling the claim with an employee who has Medicare or Medicaid benefits, as a part of your pre-settlement procedure, run a query with CMS. Guidelines on how to submit a query are a part of the CMS Secondary Payer Act guidelines published on the CMS website:
https://www.cms.gov/MandatoryInsRep/Downloads/NGHPUserGuideV3.1.pdf
It will not do the self-insured employer any good to include wording in the Compromise and Release, or Release and Settlement Agreement that the claimant will be responsible for the repayment to CMS for any medical expenses they have paid as a result of the workers compensation claim. The agreement is between you and the employee. CMS is not a part of the agreement. They can still enforce their recovery rights and will do so. It is also much easier for CMS to go after the deep pockets of the employer than the employee who has already spent the money that was supposed to cover any medical bills that were not previously paid by the workers compensation insurance.
CMS must be protected or you are not protecting your self-insured workers compensation program from paying the cost twice. Intentional misrepresentation by the employee or an honest mistake on your part will not prevent you from having to reimburse CMS for the medical care for which they have paid. CMS takes the position that it is your responsibility to know the requirements of the Secondary Payer Act and to comply with them.
While the CMS manual is difficult and takes
some time to read, learn, and understand, if you are going to be involved in processing workers compensation, you must read the manual. Become acquainted with the
CMS guidelines. Most importantly, this is a very specialized area of workers compensation, so it's best to work with a firm that has expertise in this area. Let's the experts do what they do best – making sure all of the bases are covered.
Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
LowerWC.com interviews industry experts on important and sometimes complex workers compensation issues. Medicare set asides is such a topic — and one those in the workers compensation industry can never know too much about.. Here Michelle Leon-Perez, director of Strategic Services for Gould & Lamb (an
Amaxx Resource Center advertiser) answers some key questions.
What is a Medicare Set Aside (MSA)?
A
Medicare Set Aside is a comprehensive report detailing reasonable future Medicare covered costs related to the alleged injury/accident. An MSA addresses only future Medicare covered expenses and its funds are not used to pay for past treatment. Simply put, the MSA identifies potential future Medicare-covered treatment costs and ensures all parties involved in the settlement are protected from Medicare Secondary Payer Act litigation and actions, post settlement.(WCxKit)
What does a self-insured, self-administered company need to know about the MSA process as opposed to a company with a third-party administrator (TPA) or an insurance company handling the claim?
Producing an accurate allocation requires expertise in Medicare guidelines, legal issues, medical cost projections, bill review, and claims handling. The self-insurer should confirm that their
MSA provider has these experts in-house and, when appropriate, offer post settlement administration options to ensure an optimal Medicare Secondary Payer (MSP) complaint settlement. As Medicare’s scrutiny of MSA allocations has increased, this process is riddled with pitfalls; all entities should collaborate with an MSA partner who has a strong history of Medicare approval success and who provides a defensible allocation amount.
Tell us about the “why” of MSA in terms of necessity? Who is primary and who is secondary regarding payments of medical claims for workers compensation? And, why is it not smart for employers to think they can skip it?
Medicare considers any entity with or without regard to policy that is reasonably expected to make payment to the benefit of a plaintiff/claimant as the primary payer. All entitles handling bodily injury claims, especially self-insurers, must understand Medicare Secondary Payer (MSP) rights and focus on them as the primary payer. Actions under the law include: rights of recovery by Medicare or private cause of action by the plaintiff/claimant under the MSP. It is important to partner with a company that can provide them with the necessary experience and compliance tools to protect themselves by mitigating these exposures. Failure to comply with the MSP could, in effect, undo a funded settlement and expose them to additional payments post settlement. What an entity chooses to do regarding MSP compliance is their decision but skipping the MSA process is potentially more costly than the MSA itself.
MIR/MMSEA has made skipping MSP compliance in workers compensation very risky. Centers for Medicare & Medicaid Services (CMS) will be supplied with the information necessary to determine which claims involve a beneficiary and who the primary payer is. In other words, CMS will be looking for entities that skip the process, which can result in civil or federal actions exposing the self-insurer to monetary damages that may exceed the MSA amount had it been completed.
What is the connection between MSA and prescription drug plans (Medicare Part D) and how do these plans fit into the set–aside process?
When a claim has considerable prescription exposure; submission to CMS can be challenging. Since June of 2006, Medicare has reviewed the adequacy and sufficiency of the prescription drug component in MSAs. Since this change in the review policy, prescriptions are now a key cost driver in some MSAs. Issues emerge regarding the allocation for certain medications as well as frequency/dosages. Poorly constructed prescription drug components can result in CMS review determinations (the allocation amount) being considerably higher than originally forecasted. Understanding the potential exposure and obtaining the right partner to address them is the most important decision to be made.
What’s the best way to obtain MSA set-aside approval?
Provide and prepare. Providing all of the appropriate releases and documentation is a key step to avoiding untimely delays. You should select your compliance partner carefully as they will prepare you for the protocols and requirements involved in CMS submissions.
What happens if a claim is settled without an MSA reserve account? Is the employer off the hook for future medical payments?
If there is Medicare exposure and it is not addressed via an MSA and noted in settlement documents, the self-insured employer is not off the hook! They ultimately are responsible for addressing MSP exposures and potentially will have to provide additional funds to remedy any deficiency. Certainly, however, an employer can choose to ignore it. But, in this litigious environment, proactively addressing the risk is often more cost effective than addressing it re-actively.
What internal processing does an employer need to set up to monitor claims, settlements, etc? How often should status reports be received? How many dedicated people are necessary to efficiently process claims?
MSA providers should update their clients either monthly or quarterly on MSA referral status. These “report cards” typically detail metrics needed to globally manage an optimal MSP compliance program and ensure that exposures are kept to a minimum. If a self-insurer has a good MSA partner; the status reports they receive could keep the number of dedicated compliance people to one or two.
How are annuities/structured settlements handled?
Annuitizing allocations is CMS’ preferred method of MSA funding. Making known the option to use an annuity early in the settlement process is important. Once the plaintiff/claimants are educated about how these financial tools can benefit them and their families it is an easy sell. Having worked in claims for 15 years it is the easiest and most cost-effective method I’ve encountered.(WCxKit)
Are there any new legal aspects of MSA you can talk about?
Most recently, there has been litigation regarding conditional payments and Medicare Set Asides involving liability claims. At G&L we are fortunate to have Russell Whittle as our vice present of compliance. He is an attorney and is very involved with the Medicare Advocacy Recovery Coalition (MARC). He routinely writes about legal challenges facing our industry and his commentaries are posted on our blog. Many of our clients rely on his expertise and advice to help guide them.
Author Michelle Leon-Perez, Director of Strategic Services for Gould & Lamb is Board Certified in workers compensation and has 17 years of industry experience. Her areas of expertise cover first-hand knowledge of claims practices at a variety of carriers and practical, hands-on experience with Medicare compliance and claims. She can be reached at
michelle.leon-perez@gouldandlamb.com or
http:// www.gouldandlamb.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
LowerWC.com interviewed Christie Luke, vice president of operations at Gould & Lamb, in Bradenton, FL about custodial administration arrangements for
Medicare Set-Asides (MSAs). She started off with the basics.
Define Medicare Set Aside
The Centers for Medicare/Medicaid Services (CMS) require their interests be protected prior to any settlement of the medical portion of a claim for qualified individuals. Medicare secondary payer laws are intended to prevent the shift of financial responsibility from primary payers to Medicare. The Medicare Set-Aside Agreement (MSA) allocates a portion of claims settlement for future medical expense, placed into custodial administration.
What is Custodial Administration?
Once a case is settled MSA funds are placed into custodial administration, or “handling,” into either the hands of the claimant (self administration) or with a custodian (
professional administration) on the claimant’s behalf. This can include cases sent to CMS for approval, wherein the CMS approval indicates the intent of administration; or in cases where the client chose not to send to CMS but wants the case properly administered.(WCxKit)
Self Administration involves claimants’ handling their own money, with the intent to follow CMS’ guidelines.
Professional Administration involves a pre-designated custodian hired to administer MSA funds on the claimant's behalf. This usually occurs in larger settlements and/or those with severe injuries (e.g. traumatic brain injuries, paraplegics/quadriplegics).
Are there exceptions to those who need custodial arrangements?
There are no formal rules or regulations in most cases to those needing post-settlement administration. The exceptions are cases in which a court has deemed a person incompetent. In those cases the claimant is required to assign a custodian . In other cases, it is up to the settling parties how to proceed — this is driven by the risk of adversity to the carrier or self-insured employer.
What impact does it have on insured clients? Whom does it affect?
Post settlement administration programs can provide insured clients with comfort knowing they are providing claimants with post-settlement support. This ensures they are able to manage their Medicare Set Aside funds. In many of these cases, the parties are overwhelmed and, at times it may discourage them from entering into a settlement. Knowing these tools and resources are provided, reducing the potential negative actions by CMS and ensuring post-settlement compliance and risk mitigation is a benefit to all parties to settlement.
How should employers proceed when becoming aware of their obligations? How do they then set up an arrangement with a custodial administrator?
Once a carrier or self-insured employer has set standards with regard to their comfort level on post settlement administration, they can decide how to set processes and procedures. Generally, they should begin including information on the topic as soon as possible with the parties, at least during settlement discussions. This way, all of those involved are aware of available resources and costs, as well as the potential implications of non-compliance and the benefits of available programs.
During these discussions they can include administration companies. In order to ensure the administrator’s notifications to Medicare and to the claimant and their medical providers is seamless before and after settlement, they can check to be sure all information is accurate and the program is administered in a timely manner.(WCxKit)
Why is it better, more cost effective, etc., to use a formal administration company?
The administration of an MSA is quite challenging. It requires in-depth knowledge of Medicare policy, individual state fee schedules, and an understanding of Medicare coverage application and claim related care. Without this detailed knowledge, it is very easy to improperly disperse funds from an MSA or pay amounts above fee schedules, risking future Medicare benefits and entitlement.
Thank you, Christie for your time filling us in on this very important topic that all employers need to be aware of.
Author Christie Luke of Gould and Lamb has worked for nearly a decade in claims management, followed by over five years in all aspects of MSP compliance. She has an undergraduate degree in business and an MBA focusing in Healthcare Administration, Quality Management, and Economics. She is MSCC certified and is currently earning her Green Belt certification in Six Sigma. She is also a member of NAMSAP. Contact Christie at 941-798-2098, Ext.1314; or email:
Christie.Luke@gouldandlamb.com.
GOULD And LAMB BLOG
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
A company on top of its workers compensation costs implements Account Servicing Instructions (ASIs). Without them managing claims and litigation is nearly impossible.
Also known as account instructions, claim service instructions or account handling instructions, ASI represent the agreement or understanding between the insured and the field adjusters at the insurer’s branch offices that guides the handling of all suits and claims, both litigated and non-litigated.(WCxKit)
These instructions are disseminated to all branch offices across the country.
The ASI includes information about how claims are to be handled in every line of insurance including workers compensation, products liability and automobile insurance. (Third-party administrators who provide claims servicing without insurance also use ASI to guide their adjusters.)
After ASI are negotiated, the insured must familiarize all internal claims handling personnel with the provisions of the ASI and provide them with a written copy to ensure they understand the responsibilities for key areas of claims handling.
In addition to containing policyholder information and details about coverage and dissemination of data (loss runs), ASI can also contain other lesser-known guidelines.
For example, the referral of medical reports to a physician consultant for preparation of a letter to set up an independent medical examination (IME), or a requirement saying subrogation can be waived only upon receipt of a written evaluation and agreement by the company.
The following should be addressed by or incorporated into ASI
for a company to gain more control of its claims and litigations.
1. Settlement Authority
Who has settlement authority? The company or the insurer?
2. Selection of Counsel
Do you select your own legal counsel? What type of legal counsel does your company utilize?
3. Reporting
How often do you receive status reports for open claims from your insurer, 30, 60 or 90 days?
4. Reserves
Does the insurer provide a written explanation each time reserves are raised over $10,000 or more? Do reserves set take into consideration the company’s aggressive return-to-work program, probably resulting in lower wage loss?
5. Dedicated Adjuster
How many adjusters are dedicated to processing company files in each office? Are you adjusters "designated" or "dedicated" — there's a big difference, so as you negotiate terms make sure to determine the difference in these two different arrangements. Designated adjusters means you will always have the same adjusters handling your claims, probably one in each office, but they will handle the claims of other companies. Dedicated adjusters will handle ONLY your claims, not claims from any other company.
6. Investigations
How do you request investigations? Are all investigation reports sent to you for review. That's a good start. Specify this in your account instructions. Don't rely on adjusters to review the reports. READ THEM YOURSELF!
7. Structured Settlements & MSA Compliance
Do you consider structured settlements for all cases over $10,000? Do you have a reputable firm to handle all your MSA Compliance needs? Even if you are self-insurance, self-administered you will want an MSA Complaince company on board. Find one that does compliance audits to make sure you are crossing all the t's and dotting all the i's as there are large fines for non-compliance.
8. Subrogation
Are all cases reviewed for subrogation potential? Who closes a file and waives subrogation recovery? Do you want to be consulted before a lien is waived or compromised?
9. Workers Compensation Lost Wages
Do you receive copies of payments being made on each open file? Do you review checks or a list of all payments made for accuracy?(WCxKit) Make sure checks are not automatically deposited into claimant's bank accounts because they will no longer need to sign the fraud endorsement language on the back of the checks. It's there for a reason, and you want to have it seen and signed!
10. Referral to Physician Consultant & Nurse Triage
How are outside vendor services activated and coordinated? Are all medical records sent to the physician consultant before an independent medical examination is conducted? The TPA may have these services, but if not, make sure to consider a full range of services. Nurse Triage provides medical advise upon intake to a trained triage nurse, much like having an EMT available for all injuries. The ROI is about 4 to 1, and there really isn't any downside.
11. Physical Therapy & Occupational Clinics
This is one area you can save money, by having a network in place rather than relying on the adjuster or doctor to make a random referral, you can work with a PT operation that focuses on return to work. The right network will be local or might even come onsite to treat your employees. If you have a spare room, you might consider having onsite PT or even an onsite occupational clinic. If you have this type of facility, make sure to mention it in your account instructions or the adjuster might not know.
Even Federal Agencies can benefit from some of these services, so make sure to explore all options.
Eleven questions to ask when setting up your account service instructions that will save you money #WorkersComp.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
While proposed amendments to Maryland workers compensation regulations represent an improvement from the emergency rule adopted Jan. 4, 2010, the Property Casualty Insurers Association of America (PCI) reports it still has concerns regarding their impact.
The regulation, COMAR 14.09.01.19, would establish guidelines for reviewing and approving proposed workers comp settlement agreements in compliance with the review thresholds established by the federal Centers for Medicare and Medicaid Services (CMS) and spell out the data elements that must be part of all settlement agreements. (WCxKit)
According to PCI, the regulations will make settlement of Maryland workers comp claims more cumbersome and force injured or disabled workers to hire expensive legal assistance to navigate the complex language of those claims. That could mean higher costs not just for individuals, but also the state.
“There are administrative fees and expenses associated with the administration of a Workers Compensation Medicare Set-Aside Arrangement (WCMSA) and potentially extra attorney fees for setting up a WCMSA,” said Richard Stokes, PCIs Maryland counsel. “This can add thousands of dollars to the cost of settling a Maryland workers compensation claim. In addition, the requirement that all formal set-aside allocations comply with Medicare guidelines adds extraordinary complexity to settlement submission and approval. This adds to the costs of carriers to handle workers compensation claims in Maryland and adds to the administrative costs of the Maryland Workers Compensation Commission to review and approve settlements.”
Additionally, the added complexity could mean that workers could have to wait 3-6 months for CMS approval of a settlement, creating an additional and unnecessary hardship. PCI proposes changing the regulation to make it optional, but not mandatory, for settlements to be submitted to CMS for approval. (WCxKit)
“Injured or disabled workers in need should not have to face months of additional waiting for settlements that more bureaucratic red tape could cause,” Stokes added. “We recommend that this regulation be amended. We appreciate the opportunity to submit comments and be heard on this important issue.”
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
The American Insurance Association (AIA) is opposing a regulation requiring the Centers for Medicaid & Medicare Services (CMS) to back a set-aside arrangement as a condition for approval of a workers compensation settlement under Maryland law.
The Workers Compensation Commissions proposal requires that emergency rules be converted into permanent rules, subjecting Maryland to an “unwarranted” federal regulatory procedure, according to the AIA.(WCxKit)
According to the AIA, the regulations would increase workers comp costs, increase delays for claims settlement and fail to protect all parties.
“For the first time anywhere a states workers compensation agency is about to eliminate its own discretion and authority by effectively giving a federal agency the right to prior approval of a lawful practice under its state law,” Bruce Wood, associate general counsel and director, workers comp for AIA, wrote in a letter to Amy Lackington, administrator for the Workers Compensation Commission.
The commissions proposal is based on “misunderstandings” of the CMS Medicare Set-Aside (MSA) procedures, according to Wood.
He wrote that there is no requirement for CMS approval of a workers comp settlement; the MSA procedures do not prescribe use of a set-aside arrangement; and CMS review of an MSA submission does not fully protect parties who do obtain CMSs approval of a set aside.
“Under federal law, Medicare is the secondary payer, thus CMSs interests are secondary to the requirements of the Maryland workers compensation law. It is ironic that the regulation converts a voluntary practice into a state mandate, and Maryland will be the only state to do so,” Wood wrote. (WCxKit)
“
The elements of those settlements will be subject to CMSs often disparate and shifting practices, as well as CMSs often inflated view of Medicares future interests. In effect, adopting this rule superimposes on the Maryland system the flaws of CMSs administration of the Medicare Secondary Payer Act that all parties to the workers compensation system have endeavored to repair for the past decade and for which legislation has been before the Congress for most of this period,” Wood added.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
