Claims Resolution and Settlement Archives

Properly Prepare A Confidential Mediation Statement

June 6, 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 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: 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

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.

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

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.

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: 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.

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

5 Key Terms That Define Professional Administration Contracts

April 17, 2019 by Porter Leslie

Setting up support with professional administration of medical funds after settlement is a clear choice. It helps the injured person save money on their healthcare expenses and provides support in navigating ongoing care. The service is especially helpful for Medicare Set Asides because the administrator helps ensure the injured person’s Medicare benefits remain intact while protecting the injured worker, their attorney, as well as the payor from any potential mishaps. In fact, Medicare “highly recommends” that injured individuals use a professional administrator after settlement. (What is professional administration? Learn more)

When it comes to administration, all involved should have a thorough understanding of the administrator’s role and how it benefits the injured person. What can sometimes be less obvious is how to set up the administered account with an agreement that adequately governs it and how administration fits into and facilitates settlements. The following concepts are essential to understand these agreements.

1. Who is involved? Parties to the Agreement

Ideally, the agreement is between the injured person (also known as the “member”) and the administrator. It’s useful to get to know the administrator involved and to see if it is independent and truly has the best interests of the injured individual at heart. Conducting some background research, contacting the administrator directly, and asking for references are good starting points.

Tip: Be aware of administrators that operate other lines of related business. This could create a conflict; for instance, if they work for the carrier/employer to provide low estimates of future medical allocation amounts, it does not make sense that they are also offering to work for the injured person to help them maximize their medical settlement funds.

The cleanest arrangement is a bilateral agreement between the administrator and the injured person where the administrator is focused on its duty to protect the injured person.

2. The Purpose of the Agreement / Responsibilities of the Administrator

The administration agreement should outline the benefits and services the administrator will provide. These often include:

Placing the settlement funds in a separate, interest-bearing bank account under the member’s name
Securing discounts on medical bills where possible and paying medical bills on the member’s behalf
Tracking and providing complete reporting on all expenses
Filing any required government reports, such as Medicare Set Aside reporting

The responsibilities of the administrator should be clearly outlined. If it is determined that the administrator is going to do something extra or different for the member, this should be included in the agreement.

3. The Bank Account

The administration agreement should provide detail on how the member account will be established. For utmost security, it should be a separate, individual bank account established in the name of the member. In unique situations where the settlement is funded into a special needs trust, then the account may be required to be setup in the name and Tax ID number of the trust to ensure government benefits are protected.

Often times, included in the administration agreement is the standard information the bank requires. With complete security, the administrator is the custodian of the account and must authorize any disbursement.

Tip: The safest account is a separate checking or savings account. Be careful of any pooling of the injured person’s funds with money from other clients. This can have significant consequences because it:

may result in their funds being invested in less liquid assets or that are at risk of losing value. (Investment losses are not an appropriate use of MSA funds)
may result in the loss of FDIC insurance of $250,000
means their money and will likely be tracked manually by the administrator instead of the bank which could potentially lead to mistakes

It’s important to know the member’s money is deposited at a reputable bank in a separate and secure account managed by a top-notch administrator. It is also important to choose an administrator that has multiple banking partners to ensure that large accounts that may be in excess of FDIC limits can be set up in the most protective way.

4. Beneficiary Designation

An important provision of the administration agreement is the beneficiary designation language. Similar to the setting up of a trust or estate plan, it’s important for the member and all parties involved to know where the administrator should send the remaining funds in the account when the member passes away.

Typically, the administration agreement follows the guidance provided in the master settlement documents. If there is no designation of a beneficiary in the settlement documents or if the account is established after settlement, the administrator will defer to the member for whom they wish to designate.

Tip: this provision, like many others, can be negotiated as part of the overall settlement discussion, separate from the administration service. The beneficiary of the administered account can be the member or their estate; it can also be a corporate entity like the carrier/employer/payor involved in the claim (frequently referred to as a “reversionary” party), or a non-profit or charity, etc. During settlement negotiations, the defense and plaintiff parties can negotiate the terms of this part of the agreement to determine who or what entities benefit from the remaining funds; sometimes the designation of the funds or a portion of them can be subject to certain terms and conditions, just as they can apply to other aspects of the settlement.

Upon death, the administrator will typically require a grace period to make sure all outstanding bills are gathered and payments are made; then, the administrator will close the account and cut the check to the designated party or parties.

5. Rights of the Injured Person

Finally, it’s important the member fully understands their rights when their account is being established. They should have a number of common rights and protections and should also be aware of any restrictions. Here are a few common items to consider:

Review of performance: the member should be able to review the work of the administrator and report any inaccuracy to have it addressed
Protection: The member should be held harmless for any mistakes made by the administrator due to negligence
Savings: the member should receive the benefit of discounts secured on their behalf by the administrator. If the administrator benefits in any way from discounts negotiated, they should be transparent to the member.
Open Network: the member should be able to seek treatment with any provider or pharmacy. While a network may be in place to help the member save money, administrators should not restrict the member’s access to care with any provider, pharmacy or facility.
Termination: it should be clearly stated whether termination of the agreement or a withdrawal of the funds is allowed. This can be negotiated as part of the overall settlement. Typically, if the member is the sole beneficiary, they can choose to terminate the administration agreement and receive all their reporting and a check for their funds. However, if there are other designated beneficiaries, language in the settlement agreement may restrict their ability in order to protect all beneficiaries’ interests.

Fitting It All Together

Along the way, if you or the injured person have any questions, the administrator will be a valued resource to clarify the terms of the agreement or explain how the service works. Not all settlements are alike, so sometimes it’s beneficial to request edits and tweak terms of the agreement to your liking.

Once all parties are confident in the terms of the administration agreement, most often, the administration agreement will be added as an addendum to the settlement documents. This way, it is part of the overall settlement package and can be approved at settlement; in workers compensation cases, the judge often wishes to sign off on all aspects of the settlement, including administration.

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

Case Study: $270,917 in MSA Savings Through Physician Follow-up

March 27, 2019 by Michael B. Stack

Developing a Medicare Set-Aside is not only a time-consuming and arduous process, but can also be unnecessarily expensive. There are many instances where tremendous sums of money are included in an MSA just because stakeholders were not diligent in analyzing what was included.

A case in point was a recent situation in which a medication the injured worker had taken only one time was set to be part of his lifetime medications in the MSA. Had this seemingly simple oversight not been flagged, it would have driven up the cost of the MSA by hundreds of thousands of dollars!

We hear all too often about injured workers who, unfortunately, fall through the cracks in the workers’ compensation system and are not appropriately cared for. While these represent only a small minority of cases, they generate headlines. Equally disturbing are stories of injured workers who’ve settled their cases and soon after find themselves out of money with no hope of paying for their future medical expenses, let alone moving on with their lives.

The goal of developing an MSA is to identify as accurately as possible the total cost that will be incurred during the injured worker’s life. The amount needs to include all expenses related only to the specific injury, as well as other treatments that may be needed later on.

Either party – injured worker or employer/payer – can wind up on the losing end of a settlement if it is not done correctly. This is why it is so important for all parties to carefully review the medications, procedures, and costs involved before signing off on an MSA.

Case Study (Provided by Tower MSA Partners): $270,917 in Savings from Physician Follow-up

An injured worker had been diagnosed with a variety of conditions stemming from a workplace injury, including depression, anxiety, complex regional pain syndrome and bilateral hand/arm pain with radiation to his right shoulder and neck. He was ready to settle his claim and leave the workers’ compensation system.

Among the six RXs included in the MSA projection was Nucynta 50mg. This opioid is meant to be a short-term treatment for moderate to severe pain. Not only is it highly addictive, but also extremely expensive. It comprised $245,721 of the MSA amount.

The worker had, understandably been treated by several physicians in the year before he agreed to settle. But the medical records were less than complete.

Total MSA Exposure — $326,925.

Solution:

With so many physicians involved, Tower’s physician follow-up team first obtained statements from each of the six providers involved in the worker’s treatment. They confirmed the last dates of services and whether medications had been continued or not. If they were, the name of the drug, dosage, and frequency for each was requested.

The physician who had prescribed Nucynta confirmed it was a one-time fill that was subsequently discontinued. The team identified several additional discrepancies in the statements from the physicians and had the physicians document the medical records with a revised medication list that reflected what the injured worker was actually taking and expected to need going forward.

Results:

Removing Nucynta from the medication list reduced the projected amount of the MSA by more than $245,000. An additional $81, 204 was also eliminated, based on the physicians’ statements

The MSA went from $326,925 to $56,008 — a savings of $270,917 and, with no negative impact on the injured worker!

Conclusion:

While the particular medication involved in this case was on the high-end of errors, the situation is all too familiar. Stakeholders often take information about current and future medications and treatments at face value, without delving into what is behind the numbers.

This case is typical in that a variety of physicians were involved, their records in many cases were incomplete, and there were medications included that had no bearing on the injured worker’s current, let alone future status.

Creating accurate MSAs takes time and skill. Those who undertake them need to ask questions and obtain all relevant information in order to come up with an amount that is fair to all sides.

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)

You’re Fired! Using Employment Release and Resignations in Work Comp Cases

March 5, 2019 by Michael B. Stack

Running an effective workers’ compensation program revolves around managing risk and reducing it when necessary. In some workers’ compensation cases, this includes the demand the employee voluntarily resigns their employment from the employer and agree to never work for them again, also known as an employment release and resignation. Before making such demands, it is important to understand the numerous pitfalls associated with an employment release and resignation and how to use it in an effective manner.

Understanding an Employment Release

A voluntary resignation and release of any and all employment claims by the employee are outside the scope of the workers’ compensation insurance policy. It is important for all defense interests to coordinate via their defense counsel. The Release must be found in a document separate from the settlement of the workers’ compensation claim and the consideration (money paid to the employee) must be paid by the employer.

An effective Employment Release should be written with the interests of the employee and their employer in mind. Given the numerous legal issues, attorneys representing the employer/insurer are often hesitant to draft such a document as it is outside the scope of their representation. Retaining separate counsel who understands employment law issues may be something to consider.

It is also important that the employee understands what they are giving up under the terms of an Employment Release. Points of contention include:

The inability of the employee to make a claim against the employer for future unemployment compensation benefits;

The inability of the employee to make an application for employment with the employer at any point in the future; and

The inability of the employee to make any employment claims against the employer such as age, gender, and race discrimination, along with claims for interference with and/or retaliation for making a workers’ compensation claim.

Essential Terms to Include in an Employment Release

Any Employment Release that is included in a workers’ compensation claim should be either drafted by and/or reviewed by an attorney specializing in employment law matters. They should also know and understand all applicable state-specific and federal laws governing employment law matters.

Common terms found in such an Employment Release include the following:

Discrimination: Prominent federal laws in the area of employment prohibit employers from discriminating against employees on the basis of race, color, religion, sex, or national origin. These provisions are found under Title VII of the Civil Rights Act of 1964. Other important federal laws include the Americans with Disabilities Act and equal pay laws. State laws typically mirror federal standards, but can also exceed the minimum thresholds or include other classes (g. – sexual orientation, marital status, economic status/receipt of public assistance) of employees.

Retaliation: Most states have anti-retaliation provisions in their workers’ compensation laws that create a civil cause of action against employers who harass or intimate employees who file claims. Case law in many states has extended legal protections to all employees, including those not legally authorized to work inside the United States.

Sexual Harassment and Emotional Distress: The #MeToo Movement has given rise to a renewed national consciousness regarding sexual harassment and assault in the workplace. Claims can include the intentional or negligent infliction of emotional distress under tort law.

Contract Claims and Breach of Contract: Employees can also allege their employers violated the terms of a workplace contract. This is often the case in dealing with employee’s subject to a collective bargaining agreement. While employees are generally considered “at will,” claims can be made for implied or express contracts.

Payment of Wages: Wage disputes are common for employee’s subject to overtime pay. The non-payment of a bonus can also be an issue when an employee is subject to termination at the end of a quarter or year-end.

It is important to avoid using forms. Failure to fully understand the law may prove catastrophic for all defense interests involved in a workers’ compensation claim.

Conclusions

Members of the claim management team need to seek opportunities to reduce risk and maximize the effectiveness of a workers’ compensation settlement. One such option is to seek a global settlement where the employee agrees to voluntarily resign their employment from the employer. It is important that the claim management team, employer and defense counsel discuss these issues and coordinate in an effective manner.

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

Paul H. Sighinolfi Joins Ametros as Senior Managing Director

February 27, 2019 by Senior Editor

Wilmington, Mass. (February 19, 2019) – Paul H. Sighinolfi has joined the Ametros Senior Leadership team as Senior Managing Director. Bringing with him a wealth of knowledge and experience, he will provide thought leadership and lead regulatory and policy initiatives, while providing meaningful strategic direction and insight.

“Paul and I have known each other for several years. He brings years of experience and a unique perspective,” says Marques Torbert, CEO of Ametros. “We are happy to have him on board to help Ametros continue to innovate and provide thought leadership in our industry.”

Ametros strives to enhance the lives of injured parties with innovative and affordable settlement solutions. Ametros focuses heavily on improving the health and well-being of injured workers ensuring that they live happier, healthier, and more productive lives post-settlement.

Sighinolfi is an attorney who brings over 30 years of experience in the workers’ compensation industry, most recently as executive director and chair of the Maine Workers’ Compensation Board. Previously, he was a partner at Rudman-Winchell, LLC., directing the workers’ compensation practice group. He also coauthored Maine Employment Guide: Workers’ Compensation and has been a frequent speaker throughout the country on various workers’ compensation topics.

“Paul’s experience as the head of the workers’ compensation system in Maine, in addition to previously serving as both a plaintiff and defense attorney gives him a complete view of all sides of our workers’ compensation system and makes him a wonderful fit for our company,” Torbert says.

The International Association of Industrial Accident Boards and Commissions (IAIABC) elected Sighinolfi to its Board of Directors in 2014, and he served as its Board Vice President until earlier this year. He is a fellow of the American Bar Association, College of Workers’ Compensation Lawyers, and was formerly on the Executive Committee of the Southern Association of Workers’ Compensation Administrators.

Additionally, Sighinolfi has served as a director on the boards of several non-profit organizations, including Ronald McDonald House Charities of Maine, the Bangor YMCA, and the Girl Scouts of Pioneer Valley.

Sighinolfi earned his master’s degree at Trinity College in Hartford, Connecticut and his law degree at the Columbus School of Law at Catholic University of America, in Washington, D. C.

“I’ve worked in many aspects of workers’ compensation, and I truly believe what Ametros is doing is on the cutting edge of the industry,” says Sighinolfi. “I’m thrilled to be joining the Ametros team.”

ABOUT AMETROS

Ametros is the industry leader in post-settlement medical administration and a trusted partner for thousands of members receiving funds from workers’ compensation and liability settlements. Founded in 2010, Ametros provides post-settlement medical management services with significant medical and pharmacy discounts along with automated payment technology and Medicare reporting tools. Headquartered just north of Boston in Wilmington, Massachusetts, Ametros may be reached at 877.275.7415 or via www.ametroscards.com

CONTACTS

Ametros
Melissa Wright, 978-381-4329
mwright@ametroscards.com

Filed Under: Professional Administration

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