There is always a bit of sticker-shock when receiving the amount of the MSA back from the company that provides the numbers. Depending on the age of the claimant, the younger the age of the person the MSA is being settled for, the more astronomical the amount can be. But the same can be said for older claimants as well, due to personal health issues and other conditions, both work related and not. The purpose of the MSA is to have the carrier pay the actual cost of needed treatment, until the Medicare coverage kicks in to pay. But the number received for the MSA may not be the actual costs the carrier has an obligation to cover. Frequently, there are errors that may be included in the costs, and those errors can be costly. So how can that cost be decreased and also the MSA be approved by CMS? How should these MSA cases be handled in general?
- Check the prescriptions and if they are related
If it is preferable to settle the claimand an MSA is needed, it will include the cost of medications that are applicable to the claim. But when Medicare sees a person that has Medicare coverage and also a comp claim, they can lump everything together, instead of separating work related conditions from the non-work related ones. Older employees may be taking several medications for various conditions, and it is possible that few, if any, are related to the injury.CMS does not necessarily take the time to sift through the file and sort it; they expect that to be done. Be sure to pay attention to all of the listed diagnoses, and if the costs included that do not pertain to the claim are seen then state the dispute in writing and get it to the MSA provider and CMS to modify the numbers. Since the majority of older patients do not get intense invasive treatment, most treat with medications to alleviate the conditions. This is where medications that do not pertain to your claim are seen. Prescription medications can amount to the largest cost of the MSA, so if correct figures of what is required to be covered can be assessed, there can be a significant decrease in the MSA cost.
- Settle the claim before the need for the MSA
The best way to save costswhen dealing with CMS is to not deal with them at all. If legally the claim can be settled without having to report it to Medicare, that is much easier to resolve the exposure without the need for an MSA. When factoring in the costs of having to continue to pay wage and medical coverage for the injured worker while still working on negotiating the MSA, it could result in having to pay any decreased MSA cost in the form of coverage of wages and ongoing prescription/doctor costs. To avoid this break even scenario, just settle the claim! Big deal if there is $10,000 apart in the settlement negotiations! Think about these other costs and continued coverage, and in the end saving more money than if fighting for the MSA amount tooth and nail.
- Try using an annuity to fund the settlement
If the carrier and claimant are still way off in what they think the value of the case is, consider using an annuity to increase incentive to the claimant. In an annuity setting, you will fund the annuity with a certain amount, and by the time the annuity has run its course the claimant may net more money than settling up front. Usually the claimant is only interested in a lump sum of money that is readily accessible, but every now and then there is someone that is interested in the annuity option and it can be beneficial to both parties.
There are a ton of vendors to choose from when figuring out how an annuity works, and it certainly can be worth the time and effort to check it out, especially if it means being able to settle a case on a full and final basis. Plus if this does intrigue the claimant, the claim may not have to be open forever. And every year that goes by is another year they are closer to possibly needing an MSA if wanting to settle on that full and final basis. Settling earlier may avoid the need for having an MSA.
- Check the condition payment log for errors and duplicate charges
As mentioned earlier, CMS does not really go through every claim with a fine tooth comb. They expect the carrier to do a lot of the legwork in sifting out what is related, and what is not. There is no more exact proof of this than in the conditional payments log. CMS expects the carrier to reimburse them for any charges Medicare covered that were actually related to the comp claim. The problem with this is that instead of billing the carrier just for those occupational injury charges, CMS seems to bill the carrier for every charge they have had in the recent past. So the lesson here is to review that conditional payment log very closely, and find charges that are unrelated to the comp claim and pull those out to advise CMS in writing that those charges are not related. In this case, they can recalculate the payment log and resubmit it to the carrier for further review. This process can take months, if not years, and remember while this is going on ongoing wage loss and medical coverage still has to be provided. Time is of the essence so do not delay when receiving the payment log. If needing help decoding the paperwork ask a nurse case manager for assistance or use an outside vendor to help go through it.
- Use an outside vendor or internal department to submit the MSA.
As just mentioned, the use of an outside vendoror internal department to help with the details of the MSA can be very cost effective. Adjusters have enough to do day in and day out, and these MSA issues themselves are a full time job to work on. They also carry very stiff legal fines if there are errors, and they need to be reviewed by people specially trained in MSA and CMS matters. Be thankful down the road that this is not an issue to tackle, and in the end it will save money on the claim as well. A professional MSA firm can help posture the claim to reduce MSA exposure.
Medicare involvement in claims is becoming more and more prevalent, prompting the need for the adjuster to have to multitask even more. But there are ways to work with CMS and handle those outrageous MSA costs by using the advice we discussed above. Just because an MSA and CMS have to be dealt with does not mean that the claim cannot be settled. Use the resources available and delegate as needed.
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.
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