CMS Expands MSA Amended Reviews & Modifies Consents To Release In Updated Reference Guide

CMS recently released Version 3.0 of its WCMSA Reference Guide, what we informally call the “MSA bible.”  The reference guide provides most CMS policy and procedures relating to its review of Workers’ Compensation Medicare Set-Asides.

 

The updated guide can be found here.

 

Notable additions or changes to this version are detailed below with takeaways and comments.

 

 

Amended Review Criteria Expanded to Six Years

 

CMS has expanded the Amended Review MSA lookback from one to four years to one to six years post the prior MSA approval.  As a refresher, the Amended Review process in Section 16.2 allows a new MSA to be submitted following a prior approval if all of the following criteria are met:

 

  • CMS has issued a conditional approval/approved amount at least 12 but no more than 72 months prior,
  • The case has not yet settled as of the date of the request for re-review.
  • Projected care has changed so much that the submitter’s new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

 

Tower appreciates CMS expanding the lookback to six years as this should allow for more cases to be submitted through this process and potentially settle with an MSA that better reflects the claimant’s current and future course of treatment.  If your case may meet this criteria, please contact Tower to review and determine the feasibility of submitting an Amended Review MSA.

 

 

Claimant Authorization to Submit Added to Consent to Release Form

 

Longstanding policy requires any MSA submitted to CMS must include a Consent to Release form signed by the claimant.  The primary purpose of the document is to provide Medicare beneficiary authorization for CMS to communicate with the MSA submitter concerning the workers’ compensation claim.

 

Per the updated reference guide, effective 4/1/2020 a consent must include the following language:

 

Further, I have had the Workers’ Compensation Medicare Set-Aside Arrangement need and process explained to me, and I approve of the contents of the submission.

Beneficiary Initials: ____

 

As a result of the addition of this statement, CMS is effectively asking the claimant to approve the MSA along with supporting documents in the submission.  We anticipate two consequences as a result of this addition:

 

  • Claimants will sign the consent but forget to initial this section.
  • Claimants will not sign the consent until such time as they review the MSA and perhaps the supporting documentation, i.e. medical records, which are submitted with the MSA.

 

While we understand CMS wanting to ensure the claimant understands the purpose of the MSA, we would assert this is already effectively done, in most cases, as part of the settlement process.

 

At this time, Tower will continue to use the Consent to Release without the requirement that the claimant approve the MSA submission.  However, we will need to begin using the revised consent as we get closer to 4/1/2020.

 

 

Submission of Annual Attestations through the WCMSAP

 

As we previously discussed in CMS Adds Electronic Submission Option for MSA Attestations, CMS is now allowing MSA self and professional administrators to submit annual attestations through the Workers’ Compensation Medicare Set-Aside Portal (WCMSAP).  Section 11.1.1. of the guide was updated to reflect the addition of this feature and a new Section 17.6 “Electronic Attestations” was added which directs both MSA self and professional administrators to the WCMSAP User Guide for further information on submitting annual attestations electronically.

 

 

Policies Added to Address Opioid Epidemic

 

CMS has been very active in the past two years at addressing the opioid epidemic among its Medicare beneficiaries.  The exception to this has largely been the MSA program.

 

In an effort to address opioids in MSA CMS added the following statement to section 17.1 on MSA administrators:

 

CMS highly recommends professional administration where a claimant is taking controlled substances that CMS determines are “frequently abused drugs” according to CMS’ Part D Drug Utilization Review (DUR) policy. That policy and supporting information are available on the web at https://cms.gov/Medicare/Prescription-Drug-Coverage/PrescriptionDrugCovContra/RxUtilization.html.

 

CMS takes this further in Section 17.3 by stating:

 

CMS expects that WCMSA funds be competently administered in accordance with all Medicare coverage guidelines, including but not limited to CMS’ Part D Drug Utilization Review (DUR) policy. As a result, all WCMSA administration programs should institute Drug Management Programs (DMPs) (as described at https://www.gpo.gov/fdsys/pkg/FR-2018-04-16/pdf/2018-07179.pdf) for claimants at risk for abuse or misuse of “frequently abused drugs.”

 

While MSA professional administration is recommended for most MSAs, CMS is correct in asserting it is of special value for a claimant utilizing opioid medications.  MSA professional administrators like our partner, Ametros, can readily provide the type of drug management program expected by CMS.  We applaud CMS for implementing these guidelines addressing opioid use in MSAs.

 

If you have any questions regarding theses MSA updates, please contact Tower’s Chief Compliance Officer, Dan Anders, at (888) 331-4941 or daniel.anders@towermsa.com.

 

 

 

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance. Contact: ((888) 331-4941 or daniel.anders@towermsa.com

The Clear Indicator To Start Working on Settling a Workers’ Comp Claim

 

For more in-depth Settlement Training check out:

 

THE PROCESS TO SUCCESSFULLY SETTLE MORE WORKERS’ COMP CLAIMS

https://workerscomptraining.com/registration-settlement/

 

 

There is a point within the Thanksgiving dinner when you know you have had too much.

 

Hello, my name is Michael stack and I’m the CEO of AMAX and happy Thanksgiving to everyone. This Thanksgiving week as we celebrate this great holiday where we come together as a family, give thanks and also have a really great meal. But there is that point when you say, hey, I have had too much Turkey, too much stuffing, too much mashed potatoes and gravy, and your body gives you that very clear indicator that that’s enough and you need to do something else, some other course of action needs to happen.

 

 

Need to Have Clear Indicator to Start Settlement Process

 

Similar in workers’ compensation, we need to have these very clear indicators when we’re talking about settling a case. That’s the context of today’s training, settling a case. What does that clear indicator that we need to start thinking about it? So where’s that clear indicator we need to start thinking about, okay, boom, that’s enough Turkey. Okay, boom. That’s the indicator that my case is ready to be thought about going on this path towards settlement. And how many put some of those wheels in motion?

 

So I want to talk with you today about those very clear indicators of what they are so that you can start and have that very clear indication, that very clear trigger that now we need to start thinking about settling this case and the first one that I want to give you is that the individual is consistent and stable, so consistent and stable and this is in their medical treatment and in their prescriptions; and their pharmacy and how that treatment, that course of treatment is going. So, if there’s a surgery coming up or they just recovered from a surgery, not a great time to start thinking about settling. They’re still within this process. They’re still within what we have guaranteed in the work comp industry that we’re going to take care of these people to get them to this phase, to get them consistent, get them stable in their medical and in their pharmacy.

 

 

Consistent and Stable in Medical and Pharmacy

 

Indicator number one is that they’re consistent and stable and that is that same thing when you say, whew, that’s enough Turkey, that’s enough stuffing. It’s very clear for you. This should be very clear for your work comp cases as well that they’re consistent and they are stable within this bucket. I’m not even going to give you any more because I want to have this be such a very clear indication. This is also the time to start thinking about your Medicare Set Aside as well. Your MSA. This is the time when to reach out to your MSA vendor, have them start getting engaged in this process as well, and then as you start moving along this further process of settlement, you’re engaging your settlement advisors, you’re engaging your post settlement administrator, your professional administrator within this process.

 

There’s a lot more to this, this early identifier is just the tip of the iceberg in this four-step process to settlement, and I want to encourage you to check out this full-length training.

 

 

THE PROCESS TO SUCCESSFULLY SETTLE MORE WORKERS’ COMP CLAIMS

https://workerscomptraining.com/registration-settlement/

 

 

Successfully Settle More Cases

 

It’s very valuable to really get this consistent process cooking along called the process to successfully sell more cases. You’ll see a link below to order to check out that course. It’s a tremendous course dialing into this. This is the first step indicator that they’re consistent and that they’re stable. If you can have that clear indicator, then start the recipe and start that roadmap towards settlement.

 

You will drive more successful win-win outcomes for your work comp cases. My name is Michael Stack and I’m the CEO of AMAXX. Happy Thanksgiving to everyone. I hope you enjoy a great holiday this week!

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Look to Rated Ages For Realistic Settlement Amounts

rated agesA well-developed settlement plan can be a win-win for all parties to a workers’ compensation claim. The injured worker is assured of having enough money to meet his future medical – and possibly other – needs for a lifetime; the employer/insurer gets the long-term claim off the books with the knowledge that the employee will be financially set.

 

Several elements are imperative in designing a settlement that is fair to all parties involved, such as:

 

  • Structuring the Medicare Set Aside, to ensure Medicare’s interests are addressed
  • Properly projecting medical costs, to ensure the worker has enough money to pay for future care related to the injury while also making sure what is included is appropriate and not inflated
  • Pricing out future prescription drug costs
  • Providing a system of ongoing support after the settlement, such as professional administration

 

Another vital component to is make sure the injured worker has enough money while also avoiding unnecessarily high costs is the life expectancy of the injured worker. It’s a factor used to determine the settlement amount.

 

 

Life Expectancy and Age Ratings

 

Structured settlements are a component of a comprehensive settlement plan, and vehicles that provide periodic payments agreed to by the parties. They are money streams from annuities that guarantee future payments according to a determined schedule issued through life insurance companies.

 

As with life insurance, life expectancy is a prime consideration in determining a realistic amount. Imagine a 35-year-old person in good health who applies for a $50,000 life insurance policy, compared with a 50-year-old who applies for the same policy. Chances are the 35-year-old will live longer, and pay premiums, far longer than the 50-year-old. The insurance company, therefore, charges a higher premium to the 50-year old than the younger person. Annuities for structured settlements are figured in the same way.

 

But ‘life expectancy’ is not solely dependent on a person’s chronological age. It is an estimate of longevity that also includes such things as family history, the absence or presence of high-risk activities, and comorbid conditions. The 35-year-old who smokes, has diabetes, and heart disease may have a shorter life span than a 50-year-old who is physically fit and takes care of himself.

 

There are many actuarial tables and ways to determine life expectancy. It is not, however, an exact science. Therefore, a person’s life expectancy may have many different estimates from different actuaries.

 

A realistic settlement amount should include an appropriate estimate of a person’s life expectancy. If the payments need to cover a shorter life expectancy, the cost of the benefits will be less than for someone with a longer life expectancy.

 

Life insurance underwriters can calculate life expectancy using medical records, address, and comorbidities. Because the process is not exact, structure settlement companies typically reach out to multiple life insurance companies for rated ages.

 

Any workers’ compensation claim being considered for settlement should include rated age estimates. It’s important to note that comorbidities that may impact life expectancy need not have any association with the person’s workplace injury. It is simply a medical assessment of a person’s life span.

 

 

Examples:

 

Let’s say the life expectancy of an average male is 77. So a 50-year-old in good health would have a life expectancy of 27 years. However, if that person has hypertension, alcohol abuse, and other physical issues, he may have a life expectancy of just 15 years. That would eliminate 12 years from the expectation of future medical and indemnity costs in the settlement.

 

For another, more specific example, let’s take a 22-year-old male with a myriad of comorbidities. Where the ‘normal’ life expectancy would be 55 additional years, let’s say it is reduced to 30 additional years.  When calculating the reserves and future cost projections, 25 years are eliminated from the settlement value.

 

 

Using Rated Age Information

 

Armed with various rated-age estimates, the settlement can be figured in several ways:

 

  • Reduce the settlement amount. A settlement based on 34 years life expectancy would be much less than 57 years. So, a lower, more reasonable amount can be proposed to the injured worker.

 

  • Limit the exposure. This is a strategy payers can use to lower their risk. Rather than offering a lower amount, the proposed settlement says that if the injured worker passes away within a certain timeframe, an annuity will be refunded to the employer/insurer.

 

  • Don’t settle. If the rated age is significantly different from the normal life expectancy, it might make more financial sense for the payer to continue providing benefits for the injured worker’s lifetime.

 

 

Conclusion

 

Settling a workers’ compensation claim can be a complex process. It must be enough to give peace of mind to the injured worker and be affordable and realistic enough for the payer. Getting realistic estimates of a person’s life expectancy can result in a profound difference in the amount that is actually needed.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

How to Control the 5 Variables that Impact MSA Amounts and Approvals

How to Control the 5 Variables that Impact MSA Amounts and ApprovalsWhen is the right time to get a Medicare Set-Aside? What medical information is needed? And what can you do to expedite the CMS approval process?

 

These questions plague any organization trying to settle workers’ compensation claims with injured workers who are or soon will be eligible for Medicare. But understanding when, how and why MSAs are most appropriate allows payers to work proactively with an MSA vendor to reach settlements that are in the best interests of all parties involved.

 

Anne Alabach, the Workers’ Compensation Department Manager of CPC Logistics, joins Daniel Anders, Chief Compliance Officer at Tower MSA Partners to discuss Achieving Great Outcomes with Your MSA Vendor during the National Workers’ Compensation and Disability Conference® & Expo next month at Mandalay Bay Resort in Las Vegas.

 

The session will focus on the key indicators to determine success or need for improvement, ways to leverage partner relationships to drive down unneeded MSA costs, and variables that can significantly affect the amounts of MSAs as well as approval times from the Centers for Medicare and Medicare Services (CMS).

 

 

Prime Variables

 

There are a variety of factors that go into developing an MSA. There is not necessarily a ‘right’ or ‘wrong’ amount. What’s important is that the injured worker has enough money to pay for his injury-related medical expenses throughout his life, and the payer is not incurring irrelevant and/or unnecessary costs.

 

In addition to meeting the threshold for needing an MSA, injured workers should be at maximum medical improvement before one is even considered. An employee who’s about to undergo surgery or a change in medications is not at the point where an MSA should be developed.

 

Instead, it is most appropriate when the worker’s condition has stabilized.

 

The variables that should be considered to achieve the most suitable MSA include:

 

  1. Time
  2. Documentation
  3. Legal
  4. Medical
  5. CMS MSA Review

 

 

Timing of the MSA

 

Time is of the essence — unless it’s not the right time for an MSA. As described above, prior to MMI is the wrong time to establish an MSA. Changes in treatment or services will undoubtedly mean new medications or procedures will be needed, at least in the short term. The MSA should, instead, be developed when there is a reasonably strong chance the person’s medical requirements won’t vary much going forward. CMS’ MSA review program is actually designed for the injured worker who is already at MMI.

 

However, MMI does not necessarily indicate all medications and other medical needs are appropriate; far from it. For example, medical records for the injured worker may include a medication that was prescribed just one time, months or years ago. It is not uncommon to see medications included in the MSA that the injured worker doesn’t even remember taking.

 

Uncovering those types of issues is invaluable in reducing unnecessary costs from the MSA. Talking with the MSA vendor about the injured worker’s current situation may reveal clinical interventions that place the case in a more favorable position.

 

Also, there may be case-specific recommendations based on jurisdictional issues and opportunities that would change the MSA amount. Working with a qualified MSA vendor can lead to major changes in MSA costs.

 

 

The Right Documents

 

Workers’ compensation stakeholders are often frustrated by delays in the CMS approval process. While some of the blame may fall on the agency, it is often the result of insufficient or inconsistent information provided. “An MSA is only as good as the information it is based upon,” according to Anders. Failing to give accurate and complete information may result in letters from CMS and errors in the MSA amount.

 

“Put yourself in CMS’ shoes,” Anders advised. That means to obtain and provide recent treatment records, or an explanation as to why those documents do not exist. Also, contradictory recommendations need to be corrected. The MSA vendor can ensure the right documentation is provided and is properly filled out.

 

 

Legal & Medical Issues

 

There may be legal justification to exclude or limit medical care in the MSA. Working closely with the MSA vendor can identify those issues.

 

Physician peer review, clinical oversight, and physician follow-up are the types of interventions that are critical in creating MSAs. Every aspect of the injured worker’s future medical needs must be explored, by obtaining and analyzing his past medical care. Inappropriate care that may be huge cost drivers should be singled out and eliminated where possible, while still ensuring the injured worker’s care is optimized.

 

Date of injury, accepted and denied dates of injury and body parts, compensable injuries, & diagnosis codes are just a few of the many things that must be considered.

 

 

CMS Review

 

Gaining CMS approval for the MSA, while not required by law, is often a best practice. The outcomes of these reviews are largely predictable — once the process is well understood.

 

Correctly following the guidelines in the CMS WCMSA Reference Guide, using the correct pricing in fee schedules and recognizing statutory limitations are a few of the factors that can lead to CMS approval.

 

Certain metrics identified in the MSA preparation and submission process can allow reverse engineering to correctly allocate the MSA and identify obstacles to settlement. An experienced MSA vendor can help pinpoint and analyze metrics to get CMS approval as quickly as possible.

 

 

Conclusion

 

Creating an MSA can be tedious, painstaking work, especially for those whose jobs are not solely focused on them. Those MSAs that gain quicker approval from CMS and are properly funded are developed by payers working in conjunction with MSA vendor partners who have the skills to carefully look at a myriad of factors that impact the injured worker and his medical needs.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

5 Criteria to Choose the Right Professional Administrator

professional administratorIt’s not often you hear of the government endorsing a particular service in the private sector. That’s what made it so unusual when the Centers for Medicare and Medicaid Services in 2017 “highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

 

The 2017 statement spoke volumes about the need for injured workers and others to get help managing their money and lives post-settlement. The concept of professional administration is, unfortunately, highly misunderstood by many workers’ compensation professionals. But once stakeholders are exposed to the ins and outs of this unique benefit, they realize how it can easily be a win-win for all parties to a claim – and why CMS encourages the idea.

 

 

What is Professional Administration?

 

The vast majority of workers’ compensation stakeholders are keenly aware and focused on injury prevention and claim management. What few stakeholders address, however, is that life after a claim is settled. Employers, payers, and injured workers alike usually want claims settled as soon as possible. It gets these cases off the books and allows the injured party to move on with his life.

 

The problem is the logistics of actually getting to claim closure. The biggest question for everyone involved is often, how much money will it take? The employer/payer wants an amount that will cover the injured worker’s needs, but that is also fair and accurate. The injured worker, understandably, may be extremely fearful that he will run out of money too soon.

 

In many cases, the claim has been open for months, if not years. While the workers’ compensation system may be seen as adversarial to the injured worker, it at least provides a sense of security that his medical needs are being covered – even if he doesn’t necessarily like the providers and does not always get approval for treatments he believes he needs. Settling the claim means the injured party is on his own to manage whatever funds he has agreed to. Additionally, where there has been a claims adjuster and/or nurse case manager helping him locate and schedule medical appointments, they are now gone. Many injured workers become anxious when they realize they will have to manage their case on their own once they settle.

 

Professional administrators work on behalf of the injured worker post-settlement in multiple ways.

 

  • Clinical help. The professional administrator essentially takes over the role of adjuster/nurse case manager and provides the expertise, guidance, and logistical help so the injured party gets the medical care he needs. However, rather than having a specific group of physicians available and having to seek approval for treatments, the injured party is free to see any physician of her choosing and decide for herself whether to undergo certain medical treatments.

 

  • Money management. All too frequently people settle their claims, take the money in a lump sum, and exhaust the funds within a few years. That is why experts strongly recommend structured settlements for injured parties who settle their claims. Depending on the injured party’s desires, the professional administrator can establish a bank account and act as custodian – receiving bills and paying them on behalf of the injured party.

 

  • Savings. Well-established professional administrators can make a significant difference in an injured party’s life through medical discounts; for physicians, medications, treatments, and other medical-related items. The best ones have partnerships with many providers and can provide deep financial savings, helping to ensure the injured party’s money lasts longer.

 

  • Medicare reporting. One of the issues that is often problematic for injured workers is addressing all the rules and regulations associated with Medicare Set-Asides. Injured workers who have an MSA as part of their settlements must strictly adhere to CMS’ requirements or risk losing Medicare benefits in the future. Professional administrators handle all annual reporting for MSAs and ensure that the funds are not used for the wrong purposes.

 

 

The Right Professional Administrator

 

There are many professional administrators and finding one that is the ‘best’ for a particular injured worker is not a decision that should be made lightly. Along with the injured party and his advocates, stakeholders working on a claim should also research various companies to help make the best choice. Stakeholders want to know the injured party is taken care of and won’t call them six months after settlement with complaints and threats to sue.

 

There are certain questions that can differentiate the best professional administrators and how well they will meet the injured party’s needs:

 

  • Costs/savings. There is no free lunch, and just like any organization, professional administrators need to generate income. For those in the market, the price should balance against the savings to the injured party. One company may charge $1,000 while another charges $2,000. However, asking for the average savings in medical/pharmaceutical costs and savings on the MSA funds tells the real story of the ‘costs’ to the injured party over the long term. If a company does not track this information or won’t provide it upon request, that should serve as a red flag.

 

    • The vast amount of medical and other personal information provided to a professional administrator must be protected. Find out what, if any steps the company takes to protect members’ information, whether they undergo routine technology and financial audits, and if they are HIPAA compliant.

 

  • Customer service. The relationship between the injured party and the professional administrator is lifelong, so it’s important to know all questions and concerns will be taken seriously and addressed appropriately. Find out if and how the organization measures its customer service, such as through surveys of members. Talking with existing members is also a good way to determine the quality of a company’s customer service. The company should be willing to provide references and a look at a survey of members, if they exist.

 

  • Technological convenience. Many people want to be able to get information online. Some professional administrators provide easy-to-access information, such as funds spent/remaining, names/addresses of providers, medications prescribed, recent visits, analyses of spending and savings, etc. On the other hand, some people are not comfortable with doing everything via phone/tablet/computer and should have the option of a phone number to call with their questions.

 

  • Additional services. Professional administrators should have partnerships with many other experts that can help with post-settlement issues. The company should be able to provide lists of additional services, and experts offered.

 

 

Conclusion

 

A well-run professional administration company is an invaluable asset for an injured party who settles his claim. Those that have the most experience and expertise not only help these workers post-settlement, but their inclusion in the process often helps move claims to settlement more quickly.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Terminate ‘Ongoing Responsibility for Medicare’ (ORM) or Invite Big Problems

terminate ORMThe famed University of Alabama head coach, Paul “Bear” Bryant said, “when you make a mistake, there are only three things you should ever do about it: admit it, learn from it, and don’t repeat it.”  These wise words are particularly applicable to termination of Ongoing Responsibility for Medicals (ORM) in the Medicare Section 111 Mandatory Insurer Reporting process.  Failure to properly report ORM termination can yield unnecessary Medicare conditional payment demands, costing time and expense to resolve.  When such an error is made, admit it to CMS, correct it, and learn from the experience so it is not repeated.

 

 

Background on ORM Reporting

 

Since October 5, 2015, the CRC has had responsibility for the recovery of conditional payments where the insurer or employer (including self-insured entities) is the identified debtor, known in CMS terms as the “applicable plan.” The CRC learns of opportunities to recover through the Section 111 Mandatory Insurer Reporting process. In other words, the applicable plan’s reporting is the catalyst for Medicare conditional payment recovery.

 

The mandatory reporting provisions of the Medicare Secondary Payer Act require the applicable plan to report to Medicare in three instances – the acceptance of ORM, the termination of ORM and issuance of a Total Payment Obligation to the Claimant (TPOC), settlement judgment, award or other payment.

 

 

ORM Termination Key to Cutting Off Liability to Medicare

 

Once ORM is accepted, CMS claims the right to recover against the applicable plan through the date of ORM termination. That means CRC’s recovery efforts may happen years after the ORM was first reported. Further, if the applicable plan fails to terminate ORM when appropriate, then the plan may receive CRC repayment demands for time periods in which it has no liability to pay for medical treatment.

 

Accordingly, terminating ORM when appropriate is vital to cutting off liability to Medicare.  An applicable plan may terminate ORM through the Section 111 Reporting process under the following situations:

 

  • Settlement with a release of medicals
  • No-fault policy limit reached
  • Complete denial of the claim
  • Statute of limitations has run, or medical benefits have otherwise been exhausted pursuant to state law
  • Judicial determination after a hearing on the merits finds no liability
  • Signed statement from the injured individual’s treating physician that the injured party will require no further medical items or services associated with the claim related injuries.

 

Providing CMS with the ORM termination date gives a bookend to recovery by the CRC. If no termination date is provided, then CRC assumes the applicable plan remains liable for injury-related payments indefinitely.

 

Unfortunately, workers’ compensation claims systems do not always prompt the submitter when a settlement amount is entered to confirm whether ORM is also being terminated.  As a result, the TPOC amount and date are reported to CMS, ORM remains at a “Y,” and the ORM termination date is left blank.  This not treated as an error when CMS processes the submission as CMS allows for multiple TPOC amounts.

 

Consequently, unreported ORM termination dates can continue for years, and the RRE may only become aware of the oversight only when a conditional payment notice is received for the previously settled claim.

 

 

Case Study (provided by Tower MSA)

 

Tower’s client received a Medicare Conditional Payment Notice and then a demand from the CRC in the amount of $125,554.  A review of the demand revealed many of the charges related to the injury which would typically present a challenge to requesting their removal from the demand.  However, all the dates of service itemized in the demand were after the settlement date of 8/5/2014.

 

Upon further investigation it was learned that while a TPOC or settlement date of 8/5/2014 had been reported, ORM termination had not (Tower was not the Section 111 reporting agent for this client).  Consequently, the CRC assumed that the primary plan was still accepting medical on the claim and asserted a demand for recovery of conditional payments.

 

Our client updated their Section 111 report with the correct termination date, and Tower was able to obtain CRC’s agreement to withdraw the demand.

 

In the end, our client was fortunately not held liable for repayment of $125,554 to Medicare. Nonetheless, the error of not reporting ORM termination concurrently with TPOC took several months to resolve.

 

 

Key Takeaway: Training, quality assurance and a reliable reporting agent are critical to avoiding ORM reporting errors.

 

  • Train Adjusters on ORM Reporting: If an adjuster is responsible for inserting the data required for ORM reporting, then they require training as to when ORM acceptance and termination should be reported and how to determine the appropriate diagnosis codes to report.  Significantly, anytime a TPOC (settlement) is reported, the adjuster should determine if medicals are closed as part of the settlement and whether the ORM termination date should also be reported.
  • Effective Quality Assurance of ORM Reporting: Even with training, errors will occur. Additional resources placed into quality assurance of ORM reporting, such as double checking claims for proper ORM termination and appropriate diagnosis code choices avoids the expenditure of additional resources at a later date to correct errors in reporting and address unnecessary recovery demands from the CRC. If you are an employer or carrier relying upon a TPA to report, it is especially important to have a QA process in place to check the data entered by the TPA.
  • Ensure Reporting Platform is Accurately Reporting: Section 111 Reporting is electronically based and requires a data exchange with Medicare. Errors can and will occur in this data exchange. Ensure you have a trusted and reliable reporting agent, like Tower, who will not only identify CMS submission errors, but also capture issues like a missing ORM termination date, and work with you to have them corrected prior to reporting to Medicare.

 

For more information on Medicare Set Asides (MSAs) and conditional payments, check out the webinar “Everything you ever wanted to know about conditional payments but were afraid to ask” on Wednesday, October 23rd at 2:00 pm ET. 

 

 

Author Dan Anders, Chief Compliance Officer, Tower MSA Partners. Dan oversees the Medicare Secondary Payer (MSP) compliance program. In this position, he is responsible for ensuring the integrity and quality of the MSA program and other MSP compliance services and products. Based upon his more than a decade of experience in working with employers, insurers, TPAs, attorneys and claimants, Dan provides education and consultation to Tower MSA clients on all aspects of MSP compliance. Contact: (888) 331-4941 or daniel.anders@towermsa.com

 

Eliminate ‘MSA Fear’ In Upcoming WCI Session in Orlando

msa fearAmong 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 74th 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.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Mediation to Successfully Settle Workers’ Comp Claims

mediation to settle workers' comp casesMediation 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.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Bringing Understanding of MSA Complexities at WCI in Orlando

Understanding of MSA CompliexityMedicare 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 74th 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.

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

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

Employing Creative Strategies to Settle CasesSettling 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.

 

 

 

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

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

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