Claims Resolution and Settlement Archives

Eliminate ‘MSA Fear’ In Upcoming WCI Session in Orlando

July 29, 2019 by Michael B. Stack

Among the biggest fears of many people you may know are heights, snakes — and MSAs. Workers’ compensation stakeholders often want to avoid the very idea of Medicare Set-Asides. Among their concerns are

Fees for MSA preparation
MSA professional administration
Cost of the MSA
Requirements to obtain additional medical documentation
Time involved
Submitting the MSA to the Centers for Medicare and Medicaid Services
Failed settlements due to rejected MSAs

For injured workers, their concerns about MSAs may be the biggest thing keeping them from settling their claims. The fear of running out of money too soon is often stronger than their dislike of the workers’ compensation system. Knowing they will have to navigate their own healthcare with no support from adjusters and/or case managers can also generate concerns. Finally, there is the uncomfortable prospect of having to administer their own MSA funds, or turning that task over to someone else

With so many parties apprehensive about MSAs, it’s no wonder many workers’ compensation claims go unsettled for years.

On Aug. 14, a panel of experts will discuss the fear of MSAs and how to overcome them to allow settlements to move forward. The session, Allaying the MSA Fear at the Time of Settlement, takes place during the 74^th annual Workers’ Compensation Educational Conference (WCI), Aug. 11 – 14 at the Orlando World Center Marriott. I’ll have the pleasure of moderating the session.

With expertise in MSAs, structured settlements, and professional administration, the speakers include:

Kris Sallee, Claims Manager-Eastern Region, American Airlines
Daniel Anders, Chief Compliance Officer, Tower MSA Partners
Marques Torbert, Chief Executive Officer, Ametros
Joe Bornstein, Structured Settlement Consultant, Arcadia Settlements Group

Using real case studies, the panelists will demonstrate how to approach settlements logistically by using an intervention-driven method to develop MSA allocation, professional administration to protect MSA dollars and support the injured party after the settlement, and a structured settlement to extend the dollars over the person’s lifetime.

The speakers will provide practical solutions to ‘MSA fear,’ and show how using each type of expert creates a synergy that allows for a smooth settlement process when an MSA is involved. They will also address the risks of not submitting an MSA for CMS review. And they will take questions from attendees.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Medicare Set Asides (MSAs)

Mediation to Successfully Settle Workers’ Comp Claims

July 24, 2019 by Michael B. Stack

Mediation is frequently used in workers’ compensation cases to settle claims and avoid the uncertainties of litigation. This is because it allows all interested stakeholders to be involved in the process and allows for outcomes not otherwise attainable in court. When preparing for a mediation session, it is important for those involved to prepare and assist the neutral third party in better understanding the case. One tool to accomplish this goal is to prepare a confidential mediation statement. It not only helps the mediator but allows those involved to reflect and understand their claim.

Getting the Process Started – Agreeing to Mediate

Mediation can be a formal or informal process to settle a workers’ compensation case. The structure involves a neutral third party who understands the process and controlling statute to help the parties evaluate their position and move a case toward settlement. Selection of a neutral third-party requires cooperation between the defense and employee interests.

In very few instances is mediation “required” as part of the workers’ compensation claims process. However, this should never prevent parties to a workers’ compensation case to use it as a means to settle a dispute.

We’re Going to Mediate – Now What?

Mediating a workers’ compensation case must be taken seriously. It requires preparation and evaluation by all parties. In many instances, the selected mediator will request the parties to prepare a mediation statement. This is a letter prepared by the respective parties and should be kept confidential. It should be factual, so the third-party assisting in the settlement can help. It can also contain other important documents relevant to the case that outline a party’s position.

There is no one right way to draft a mediation statement. Important elements to consider should include the following:

Defining the claim: When both parties outline the claim, it will allow the mediator to ensure both sides are beginning from the same starting point. A classic example of this is a determination of the average weekly wage (AWW). Because most indemnity benefits are based on this number, the value of a claim can hinge on the AWW. It is also important to outline defenses to a claim. This has a huge impact on the potential recovery and future exposures.

Procedural posture and prior negotiations: Providing this background information allows the neutral third-party to understand a case’s starting point and what the ultimate objectives of the parties include. It will also allow the mediator to understand other important case dynamics.

Honest assessment cases strengths/weaknesses: This is especially important in instances where there is a denial of primary liability or the reasonableness/necessity of medical care and treatment. Honestly going through the process allows all attorneys and members of the claims management team to understand the claim better and set realistic expectations.

Pertinent medical and vocational reports: These documents include IMEs, IVEs, FCEs and narrative reports from the employee’s treating doctor. These reports and documents typically provide a good summary of the claim and help the mediator better understand the case. It also allows the parties to understand the strengths and weaknesses of a claim.

Other Things to Consider

A mediation statement is also a great tool to inform the mediator about the case intangibles and dynamics. It is important for a mediator to know information such as the special needs of a client and issues that are a “must-have” in any settlement. This often includes a global settlement and voluntary resignation of the employee as part of the settlement.

Get Help Planning & Preparing for Mediation – For No Cost

With many aspects involved in a successful settlement, interested stakeholders can benefit greatly from professional settlement assistance. A settlement consultant comes at no cost and is a settlement expert with knowledge and access to various settlement tools to address the most challenging workers’ compensation claim issues. These experts can be brought into the process early on, so the settlement is set up appropriately.

Rather than just running quotes, the settlement consultant should act as the general contractor in identifying, bringing and managing the best experts to the table to address the issues preventing a positive outcome for all parties in the case.

Conclusions

The use of mediation in workers’ compensation is growing in popularity given its practical uses in settlement. When preparing for mediation, it is important for all parties to prepare. Part of this includes the use of a confidential meditation statement to provide a background to the neutral third-party and help the parties better evaluate their case. It also serves as a means to make efficient use of time and reduce costs.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Settling WC Claims

Bringing Understanding of MSA Complexities at WCI in Orlando

July 22, 2019 by Michael B. Stack

Medicare Set-Asides are a pain-in-the-neck nightmare for many workers’ compensation stakeholders. They are expensive, complicated, and seemingly fraught with landmines. One misstep could cost a bundle for you and anyone else involved.

Concerns over MSAs result in a plethora of workers’ compensation claims left open – often years after they could have and should have been closed. Payers end up spending far more for ongoing medical than would have been allocated in an MSA, had the case been settled long ago.

But there is good news! MSAs don’t have to be ridiculously expensive or complex. Yes, they need to be carefully managed, and they need to be overseen by someone with a deep understanding of the intricacies of the Medicare Secondary Payer Act and the Centers for Medicare and Medicaid Services’ processes. Employers, payers, and others who have a basic insight into MSAs can approach claims settlement realistically, getting long-term claims off their books and helping injured workers to be in the best position to move forward with their lives.

A major employer and an MSA expert will take a deep dive into the issue during the 74^th annual Workers’ Compensation Educational Conference (WCI), Aug. 11 – 14 at the Orlando World Center Marriott. Their focus will be on ways to measure and manage MSA costs. The session, Optimizing Settlement Outcomes by Measuring and Managing MSA Costs takes place Wed., Aug. 14, at 10:00 a.m. I’ll have the pleasure of moderating the session.

Measuring

The first step in assuring accurate future medical costs is to know what is in them. For example, do you know:

How many of your MSAs contain prescription drugs, the most commonly cited reason for high MSA costs?
How many contain prescription medications?
Your average CMS approved MSA amount?
Your trend lines year over year for your MSA program?

Attorney Dan Anders, the chief compliance officer for Tower MSA Partners, and Kris Sallee, claims manager-Eastern Region for American Airlines will provide metrics that will help you determine your MSA program success. Anders will show national standards, while Sallee will offer her company’s metrics to better understand how to measure your own program. Most importantly, the speakers will explain what the metrics mean and how they can be used to improve your MSA program.

Cost Management

Once the metrics are understood, it’s time to get down to the business of actually managing the costs of an MSA. The same types of best practices used for handling claims also come into play when developing MSAs, such as clinical interventions. For example, reducing unnecessary treatments and medications during the claims handling process will reduce the cost of the MSA.

Certain treatments, such as spinal cord stimulators and revision surgeries are most likely to increase MSA costs – and are often unnecessary. Likewise, certain medications may no longer be needed for the injured worker. Or there may be instances where a generic medication can be substituted for a brand name, either currently or in the near-term future when a patent for a particular medication expires.

The speakers will show attendees how to draft an MSA with an eye toward cost and frequency, as well as identifying opportunities to limit the MSA before sending it to CMS. Submitting the MSA can be tricky, and the panelists will address the necessary steps, especially the re-review process, when a dispute can be raised.

Finally, the speakers will allocate time for questions about all things MSA.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Medicare Set Asides (MSAs)

The Work Comp Tool Box: Employing Creative Strategies to Settle Cases

July 16, 2019 by Michael B. Stack

Settling workers’ compensation cases is an important part of being a proactive and effective member of the claims management team. It also allows interested stakeholders to concentrate their efforts on other more burdensome cases. Most importantly, it reduces unnecessary costs to a program’s bottom line. Working with an experienced workers’ compensation attorney can ensure you get the best agreement for both the employer and the injured worker.

What is the Claims Management Toolbox?

Having a “toolbox” at one’s disposal is important to being a great claims handler. Like a toolbox a mechanic uses to practice their trade, claim handlers need one as well to fix, accomplish or avoid a number of issues. Caution – use these tools with care and only when necessary.

Limited Compromise Settlements

All members of the claims management team will agree, the only good file is a closed file. In some instances, this is not possible given the interests of the claimant or on advice of their attorney. In cases that cannot completely settle, a claims handler should examine whether the claim presents an opportunity for a limited compromise settlement.

Under this type of settlement, indemnity benefits such as TTD, TPD, PPD and PTD are closed out. The only benefits available to the employee include past and/or future medical benefits.

Limited Compromise Settlements have some advantages:

Reduces costly exposures that may be present on a claim. This is especially the case when an employee is not incurring much in terms of ongoing medical benefits, but is struggling with return to work issues; and

Studies indicate claimants in workers’ compensation claims tend to reduce the frequency of their medical care and treatment after closing out indemnity benefits. Limited compromise settlements that leave open future medical benefits can also be helpful in instances where the parties may want to consider a Medicare Set-aside, but the cost and/or future medicals that are reasonable is astronomical.

Effective use of Hold Harmless Agreements

A “hold harmless” agreement is another tool members of the claims management team can use to settle cases. When using such agreements, the parties to a settlement are creating a contract where one party agrees to release another from all legal claims. In the context of workers’ compensation claims, this is mainly used when it comes to the reimbursement of past or future medical expenses and liens.

Such agreements can be used in many instances to expatiate settlements. This includes:

Delay in the receipt of medical bills related to a claim where the amount is either known, or reasonably expected to be known; and

One party to a claim has the ability to extinguish the interests or potential intervention rights of a known third-party.

Hold harmless agreements should be used with caution. While such agreements “require” cooperation from the party receiving protection, it might not necessarily be the case if litigation occurs. In fact, the indemnified party (the party receiving protection) may need to engage in litigation in order to secure cooperation.

Hold harmless agreements should also be avoided in instances where Medicare and Medicaid have an interest in a claim. The statutory framework establishing these federal programs does not prevent the applicable government agency from enforcing their rights against any party to a workers’ compensation claim. This rationale has been affirmed by a long line of case law interpretations.

Other Tools for Effective Claim Resolution

Settling workers’ compensation claims requires members of the claims management team to take affirmative steps to remove barriers to settlement by using their toolbox.

Develop strategies on their teams to identify cases ripe for settlement and take steps to close files. This sometimes includes picking up the telephone and making a settlement inquiry or offer. Once identified, these cases can be submitted to a competent structured settlement consultant who may be in the best position to determine the likelihood and course for settlement;

Using mediation and promoting the use of settlement conferences to move claims toward a timely resolution. Be prepared for these events. One may also want to consider bringing a laptop computer and printer to these sessions. This allows for the drafting of the settlement agreement on the spot and avoid delays in final execution; and

Implement effective medical management programs to lower prescription drug costs on all files.

Conclusions

The development of a claims “toolbox” is one step interested stakeholders can use to reduce workers’ compensation costs. This is accomplished by promoting the closure of files, or at a minimum resolving some issues on a file to narrow the issues in dispute.

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Settling WC Claims

Properly Prepare A Confidential Mediation Statement

June 6, 2019 by Michael B. Stack

Getting the Process Started – Agreeing to Mediate

We’re Going to Mediate – Now What?

Mediating a workers’ compensation case must be taken seriously. It requires preparation and evaluation by all parties. In many instances, the selected mediator will request the parties to prepare a mediation statement. This is a letter prepared by the respective parties and should be kept confidential. It should be factual so the third-party assisting in the settlement can help. It can also contain other important documents relevant to the case that outline a party’s position.

There is no one right way to draft a mediation statement. Important elements to consider should include the following:

Defining the claim: When both parties outline the claim, it will allow the mediator to ensure both sides are beginning from the same starting point. A classic example of this is a determination of the average weekly wage (AWW). Because most indemnity benefits are based on this number, the value of a claim can hinge on the AWW. It is also important to outline defenses to a claim. This has a huge impact on potential recovery and future exposures.

Procedural posture and prior negotiations: Providing this background information allows the neutral third-party to understand a case’s starting point and what the ultimate objectives of the parties include. It will also allow the mediator to understand other important case dynamics.

Honest assessment cases strengths/weaknesses: This is especially important in instances where there is a denial of primary liability or the reasonableness/necessity of medical care and treatment. Going through the process in an honest manner allows all attorneys and members of the claims management team to better understand the claim and set realistic expectations.

Pertinent medical and vocational reports: These documents include IMEs, IVEs, FCEs and narrative reports from the employee’s treating doctor. These reports and documents typically provide a good summary of the claim and help the mediator better understand the case. It also allows the parties to understand the strengths and weaknesses of a claim.

Other Things to Consider

A mediation statement is also a great tool to inform the mediator about the case intangibles and dynamics. It is important for a mediator to know information such as the special needs of a client and issues that are a “must have” in any settlement. This often includes a global settlement and voluntary resignation of the employee as part of settlement.

Conclusions

The use of mediation in workers’ compensation is growing in popularity given its practical uses in settlement. When preparing for mediation, it is important for all parties to prepare. Part of this includes the use of a confidential mediation statement to provide a background to the neutral third-party and help the parties better evaluate their case. It also serves as a means to make efficient use of time and reduce costs.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Settling WC Claims

Medicare is Issuing Denials

June 4, 2019 by Marques Torbert

The Centers for Medicare and Medicaid Services (CMS) asserts it has the right to deny paying for a treatment if a settlement recipient still has funds in a Medicare Set Aside (MSA) or has not properly reported their full exhaustion of those funds. Some attorneys, adjusters and injured parties have questioned over the years – is Medicare really denying bills? The truth is that Medicare is issuing denials.

Below is an image of a true denial letter from CMS. The following document is a Medicare Summary Notice sent to a Medicare beneficiary. On page 2, you can see that a service was not approved, and looking at footnote E, CMS explains:

“Your claim has been denied by Medicare because you may have funds set aside from your settlement to pay for your future medical expenses and prescription drug treatment related to your injury(ies).”

In this instance, a man settled his case in 2014, without a professional administrator. Unfortunately, he did not spend his MSA funds in accordance with CMS guidelines. He was receiving denial letters from Medicare, and they were not paying for treatment, so he reached out to us asking for help.

This document shows that CMS is becoming savvier and denying treatments that should be paid for with settlement funds. Injured parties that do not expend their settlement funds appropriately are at risk of jeopardizing their future Medicare benefits.

Author Marques Torbert, CEO Ametros. Prior to Ametros, Marques worked as an investor and consultant within the insurance and business services sector. Marques was previously the principal adviser to Millbrook, an Associate with Clarion Capital Partners (a middle market private equity firm), and an investment banker with Lazard Freres. He has been instrumental in working with multiple privately held organizations within the claims solutions management and managed care industries. Marques obtained his B.A. in Economics from Columbia University and his MBA from Harvard Business School. He is currently on the Board of Directors of Ametros Financial, and is also a member of the Board of Trustees for Merrimack College, as well as, University School, a private K-12 school in Cleveland. Marques currently resides in Boston with his wife Alexandra and (un)fortunately is also a Cleveland Browns fan.

Filed Under: Professional Administration

Ensure Closed Settlement Agreements Are Not Reopened

May 29, 2019 by Michael B. Stack

The only good file is a closed file! In workers’ compensation, this is accomplished by settling with the injured employee via a Stipulation for Settlement or Release. While this may “close-out” a claim, employee’s in many jurisdictions are able to re-open it by vacating the matter and pursuing additional workers’ compensation benefits. This possibility should prompt members of the claim management team to make their settlement agreements as ironclad as possible.

Issues to Consider When a Petition to Vacate Has Been Made

The standard to reopen a settled workers’ compensation claim varies in each jurisdiction. There are common themes that members of the claim management team should consider when working with defense counsel on these matters.

Mistake of Fact: This can occur in several different instances: Mutual mistake of fact, which involves an unforeseen consequence of foreclosing an employee’s then unrecognized right to various workers’ compensation benefits; Unilateral mistake of fact, which occurs when a party or their attorney lacks knowledge of a material fact that would unquestionably have caused them to not settle the workers’ compensation claim; Mistake of law; Misunderstanding; or Lack of counsel;

Newly Discovered Evidence: This is generally limited to cases where the evidence is in existence at the time of the settlement agreement, but was not discoverable through a diligent investigation. Examples of this include medical records that were not made available but requested by a party. Courts have not allowed medical and other evidence that was available or could have been available, but efforts were not made to discover them;

Fraud: This occurs when there is a false representation of a material fact, the fact must be of suspectable knowledge, the representing party must know the fact is false, the representing party must intend for another to be induced to act based on the false representation, the other party must have acted on the false representation, and the misrepresentation must be a proximate cause of actual damages (g., a settlement closing out various workers’ compensation benefits);

Substantial Change in Condition: This includes a number of different medical factors. It can include a change in diagnosis, change in the employee’s ability to work, additional permanent partial disability, the need for more costly and/or extensive medical care (g. – the need for in-home nursing services), and a worsening of the employee’s condition that was not anticipated at the time of settlement; and

Null and Void: This comes down to questions of “competency,” and whether the employee who enters into the settlement can understand the significance of it. Factors to consider can include the age of the injured employee or their mental capacity.

Making the Settlement Final

It is important to understand that the workers’ compensation settlement is like a contract – it is only as good as the person who drafts it. Basic rules of contract construction are taken into consideration. The chief concern from a claim handler’s perspective is it being constructed against the party who drafts it. Steps that can be taken into consideration include:

Make sure the nature of the dispute is clearly stated in the settlement agreement. This includes outlining in detail the claims and contentions of each party;

Outline the terms of settlement in a clear and concise manner. Correctly state the nature and extent of the work injury – and make sure all work injuries being closed out are listed in the agreement; and

State with certainty what the terms of settlement and benefits being closed out under the agreement. Consider highlighting and underlining these material terms.

If allowed, have the injured employee acknowledge they have read the entire agreement and had it explained to them by an attorney. They should understand their condition might change in the future or become substantially worse, and that if the condition, unfortunately, becomes worse in the future, it could involve a very large amount of medical or surgical expense and disability of a very serious and prolonged nature. If the employee is not represented, they should also acknowledge in the agreement they had the right to be represented by an attorney but decided to forego this right.

Obtain Help Drafting Settlement Agreements

A settlement agreement is a legal document which should be drafted and reviewed by skilled professionals. These professionals include the use of an attorney, as well as settlement consultant for the planning and negotiation of the agreement.

Conclusions

Settlement of a workers’ compensation claim should include finality and peace of mind. While this might not always be the case, effects can be made to make the settlement agreement as ironclad as possible to avoid it being vacated and incurring additional litigation expenses.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Settling WC Claims

Workers’ Comp Mediation – Getting to “YES”

May 20, 2019 by Michael B. Stack

Workers’ comp mediation and other alternative dispute resolution methods can be effective in the settlement of workers’ compensation cases. It also helps promote program efficiency that frees up funds set in reserve, which in turn can be used to settle other claims. Notwithstanding the benefits of using dispute resolution mechanisms, it is important for members of the claim management team and other interested stakeholders to prepare. Failure to do so can waste everyone’s time and energy.

Selecting the Right Mediator

In most jurisdictions, there are no specific requirements or training someone needs to have to serve as a mediator. The result is the parties to the workers’ comp mediation have the unfettered right to select the person to serve as the neutral. With this in mind, it is important to note every mediator brings a unique skill set to the table. This should include someone knowledgeable in a particular workers’ compensation act, and have a reputation for being able to cut through the smoke and mirrors of contentious litigation and get everyone to “YES!”

Preparing for a Successful Workers’ Comp Mediation

A mediator may often ask that parties submit a confidential mediation statement in advance. This document can serve as the framework for reaching a favorable settlement and avoid wasting time. Each mediator may have their own preference as to what is covered in the mediation statement. Common points that should be considered can include:

An itemization of the benefits claims/defenses and potential recovery/exposure: The value of a workers’ compensation case is the starting point for settlement. This often includes calculations for the employee’s average weekly wage (AWW), exposure for various indemnity benefits (TTD, TPD, PPD, and PTD) and medical benefits. Other items to consider include the need for vocational rehabilitation services and the possibility of retraining. All parties should consider the strengths and weaknesses of defenses such as causation issues, the reasonableness/necessity of medical care.

Expectations regarding a reasonable settlement range: The goal of mediating a case is to find common ground. This requires compromise on the part of the defense interests and injured employee. Attorneys, settlement consultants, and other interested stakeholders need to evaluate their cases and have an understanding as to where this case may settle. This will allow the mediator to work with all sides in reaching an agreement.

The status of any prior negotiations, offers, and demands: Any settlement needs to start with a settlement demand. This information should be communicated by the employee or their attorney to the employer/insurer before mediation takes place. In the same regard, the defense interests should obtain reasonable settlement authority. A claim handler ideally will be physically present at the mediation and able to get additional authority if necessary.

An honest assessment of your cases that includes its strengths and weaknesses: All parties needs to be honest about settlement and participate in good faith. Attending a mediation just to see how the other side views the case can be unproductive and delay settlement on other cases. A good mediator will challenge the parties if there is a sense they are not negotiating in good faith.

Confirmation that all intervenors and/or interested parties have received proper notice. It is important that all interested medical providers, private insurance carriers, and government agencies such as Medicare or Medicaid be made aware of their potential right of recovery. This should be completed well in advance of settlement negotiations so they can provide all parties with an updated benefit resume.

Conclusions

Reaching a settlement on every case is not practical given the contentious nature of workers’ compensation litigation. Notwithstanding these barriers, all parties should consider workers’ comp mediation as a tool to resolve cases. It can also deliver the “win” all parties are looking for as they work hard in resolving disputes.

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Settling WC Claims

Case Study: More than $1.5 Million in Savings Through Generic Substitutes

May 15, 2019 by Michael B. Stack

The latest Drug Trend Report from myMatrixx once again showed a substantial cost difference between brand-name and generic drugs. In fact, while the costs of brand name drugs are increasing, prices for generics are steadily decreasing. Unfortunately, some workers’ compensation stakeholders overlook this issue when preparing Medicare Set-asides.

Medications prescribed for the injured worker are expected to be included in the MSA to gain approval by the Centers for Medicare and Medicaid Services. There are exceptions; however; such as when it can be demonstrated the injured worker is no longer taking the medication. But switching from brand-name to generic medications is one of the most efficient and effective ways to reduce costs.

Generics vs. Brand-Names

Some people are concerned that generic drugs are of lower quality than brand-name medications. The Food and Drug Administration stipulates that all generic drugs must be equivalent to their brand-name counterparts. Additional FDA requirements include:

That generic drugs have the same active ingredient, strength, dosage form, and route of administration as the brand-name drug.
The generic manufacturer must prove its drug is the same (bioequivalent) as the brand-name drug.
All manufacturing, packaging, and testing sites must pass the same quality standards as those of brand-name drugs.
Any generic modeled after a single, brand name drug must perform approximately the same in the body as the brand name drug.

The FDA also points out that many generic drugs are made in the same manufacturing plants as brand-name drugs.

Are there differences between generics and brand name drugs? Yes, but as the FDA points out: “There will always be a slight, but not medically important, level of natural variability just as there is for one batch of brand name drug compared to the next batch of brand name product. This amount of difference would be expected and acceptable, whether for one batch of brand name drug tested against another batch of the same brand or for a generic tested against a brand name drug.”

Generic drugs are cheaper than brand-names because the manufacturer making the generic version does not have to go through costly clinical trials that new drugs do. Also, they don’t generally pay to advertise, market or promote the drug, since the brand-name maker has already established the drug in the marketplace. The competition created by multiple manufacturers developing a generic version of a brand-name medication further drives down the price of the medication.

The only reason for any patient to use a brand-name over a generic medication is if the generic drug causes unusual side effects to a particular person or, in rare cases, is less effective. In the vast majority of cases, patients do just as well with generic medications as with their brand-name counterparts.

The biggest difference between generic and brand name medications is the price. A case study of a recent MSA is a dramatic example of this.

Case Study (Provided by Tower MSA Partners): More than $1.5 Million in Savings Through Generic Substitutes

An injured worker who had been diagnosed with Post Traumatic Stress Disorder, anxiety and mood disorders was taking a variety of medications to treat his conditions. Among the more costly drugs were Wellbutrin, Klonopin, Rozerem, and Neurontin — all brand-name medications.

When discussions about settling the claim began, the initial MSA included $1,657,022 for medications and $30,058 for future medicals.

Total MSA Exposure — $1,687,081.

Solution

After identifying the brand-name medications as the key cost drivers in the initial MSA allocation, Tower recommended working with the injured worker’s attorney and the treating physician to switch to generic substitutes. The switch from brands-to-generics took several months to complete, to ensure the effectiveness of each.

When the conversion was completed, a physician’s statement was obtained confirming the switch from brand to generic, as well as an updated prescription history documenting ongoing generic use. Tower promptly submitted an MSA with an allocation of $112,572.

Results

CMS approved the MSA within eight days, allowing the parties to settle. The switch from brand-name to generic medications resulted in savings of $1,574,509 — and assured the injured worker would have enough funds for his future medicals and medications.

Conclusion

Developing and getting FDA approval for a medication is a long, complicated process. Drug manufacturers charge for a medication based on their expenses for creating and bringing the drug to market. Once the patent expires for a particular medication, other manufacturers are free to produce the same drug — as long as it meets the FDA standards for generics; i.e., it is the same drug.

The cost difference between generic and brand-name medications continues to grow further apart. By carefully looking at the medications prescribed for an injured worker and working with various stakeholders involved, an appropriate, cost-effective MSA can be created.

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

Contact: mstack@reduceyourworkerscomp.com.

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

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Filed Under: Medicare Set Asides (MSAs)

Case Study: Double the Ongoing Medical Treatment From Injury Settlement

May 6, 2019 by Porter Leslie

Injured individuals across the country are settling claims every day and often they have no idea how much a professional administrator could help maximize the money they receive for their ongoing medical care.

Professional administrators establish a bank account for the injured party’s medical settlement funds and pay all their healthcare needs on their behalf, but at significant discounts. The best administrators save the injured individual substantial sums of money on every healthcare bill. The discounts they can command can sometimes be up to 90% of that which was billed for the treatment!

Using an administrator to secure discounts can make the settlement funds last much longer which can result in the injured party potentially getting double, sometimes triple or more medical treatment from their settlement funds.

Traditionally, professional administrators have been thought to help only catastrophically injured individuals manage their care; however, they can be used for all cases that have future medical needs. Administrators have also been thought of to help with complex reporting requirements from the government for Medicare Set Aside accounts. These two uses of the service are still very relevant as they protect the injured party and everyone involved in the settlement as well as save them time, but for most injured individuals and their attorneys, the most powerful benefit is saving money for the injured party on medical bills. Let’s look at three examples of how this happens*:

Case Study Examples (Provided by Ametros)

Case Example 1

The money saved by the administrator stays in Beth’s account for her future healthcare needs. Beth now has more existing funds should she need another operation down the road. Without Ametros, Beth would have simply paid the bill and not have had the additional funds saved to put towards her future care needs. When Beth (injured individual), settled her case and needed a spinal cord stimulator implanted a year later, she faced some extremely daunting bills. The original billed amount of $132,777 was reduced to $47,551! That is a savings of over $80,000. In this case, much of the savings comes from reducing the bill to the appropriate fee schedule amount because her account was a Workers’ Compensation Medicare Set Aside (MSA).

Case Example 2

Roger settled his case in 2013 and recently needed a procedure done to replace his catheter implant and graft some tissue. The sticker price billed was $15,359. After review, his bill was reduced to $1,886, a savings of about $13,500.

For this procedure, Roger saved about 87% off the original billed charge.

Case Example 3

Discounts for medical costs do not just apply to large bills or individuals that have settled with an MSA.

Take Josefina for example. She settled her third-party liability case and two years later needed an X-Ray of her ankle for an unexpected complication.

The bill was reduced from the original total price of $529.00 to $201.83. In this situation, Ametros leveraged its facility network to save $327.17 for Josefina.

Final Thoughts

When you are assessing if a particular professional administrator is a good fit, you should ask them for a cost estimate: how much prescriptions, treatments and equipment will cost on their platform. Most will provide it for free. By doing this, you can easily determine lifetime costs and find the company that offers the biggest discounts and the highest savings.

If you are involved in settling a case where the injured party will have future medical costs, you can greatly assist the injured party by helping them not pay the sticker price for future medical costs. An administrator is a powerful ally and advocates for the individual after settlement.

*The medical bill examples shown are real bills with real discounts provided. The names of the clients and their personal identifying information has been redacted for privacy.

Author Porter Leslie, President Ametros. Porter directs the growth of Ametros and works with its many partners and clients. He built his career leading customer-focused businesses in the healthcare and financial services industries. Prior to Ametros, Porter worked in investment banking, private equity and corporate development. Porter earned a B.A. in Economics from Columbia University, as well as an MBA from the Wharton School and an M.A. from the Lauder Institute at the University of Pennsylvania. Porter is fluent in Spanish and Portuguese and resides in Boston with his wife, Ruth, and son, Camilo.

Filed Under: Professional Administration

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Bringing Understanding of MSA Complexities at WCI in Orlando

The Work Comp Tool Box: Employing Creative Strategies to Settle Cases

Properly Prepare A Confidential Mediation Statement

Medicare is Issuing Denials

Ensure Closed Settlement Agreements Are Not Reopened

Workers’ Comp Mediation – Getting to “YES”

Case Study: More than $1.5 Million in Savings Through Generic Substitutes

Case Study: Double the Ongoing Medical Treatment From Injury Settlement

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