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.

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:

1. 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)
2. may result in the loss of FDIC insurance of $250,000
3. 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.

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.

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

Some leading US companies offer a unique perk for injured workers who settle their claims with limited or no health insurance. They offer a service that gives these employees discounts on their medical care, support to navigate the health care system, and administration of their medical bills. It’s a way to give an injured worker an extension of their employee benefits while still maintaining control of their money after they’ve settled.

While this service is especially valuable for injured workers, it is not restricted only to them. Anyone can take advantage of these benefits to get a break on retail prices for prescriptions and other medical services along with support and advocacy. It’s a way to leverage the benefits of a post-settlement professional administrator without a formal agreement. Employers who can’t provide top-notch health insurance for their workers can direct them to these services as an alternative way to provide healthcare assistance.

The Benefits

Professional administrators offer significant price reductions for medications and medical treatments, as well as step-by-step guidance through the healthcare system — often via a 24-hour/7-day-a-week assistance to discuss healthcare issues. Injured workers with longstanding claims can find the comfort and peace of mind they need to finally settle their claims.

Injured parties with complex medical issues can sometimes be hesitant to end their relationship with the workers’ compensation system for fear of having to manage their money and health care needs on their own, as well as pay full retail price for prescriptions, doctor visits, and medical treatments. Working with a professional administrator after settlement can often be the answer for these employees.

Here’s how it works:

• An injured worker or independent individual who signs up for the service is given a benefit card which can be used to pay for pharmaceuticals and other medical needs.
• There is no obligation to use the card at any time, and the company cannot dictate when or how often the card is used, if ever.
• Discounts off retail prices are available when the card is used.

The professional administrator does not have control over any specific amount of money. Instead, the user allows access to his bank account for only those services paid with the card from the professional administrator. The company simply processes payments made on the card through the person’s bank account. The better companies also provide the user with a report that tracks all payments made through the card in a given time period, which can be particularly helpful for those who trace Medicare payments.

Who Benefits Most

In addition to injured workers who have settled their claims, those who can gain the most through the services of a professional administrator include:

• The uninsured. Those with no health insurance typically pay full price for their doctor visits, treatments, and medications; using a professional administrator results in significant savings to them. Additionally, they may want or need assistance locating providers and pharmacies as well as setting up appointments. Professional administrators provide these and other services.

• Those with high deductibles. People who have health insurance with deductibles in the thousands often must pay full price for their medical services and/or Payments made through the card are not credited to the deductible. However, the discounts offered through a professional administrator can result in substantial savings.

• Insureds with non-covered meds or treatments. Some insurance plans don’t include certain medications, or the discounts provided are insignificant. The discounts offered through the professional administrator may be greater.

• Those looking for alternatives to high co-payments. Depending on the insurance plan, there may be high co-payments for visiting certain specialists or purchasing some medications. The professional administrator’s discounts may be lower than the out-of-pocket co-pay.

The services of a professional administrator are not appropriate for everyone, but for many, it is an alternative to paying high prices and trying to navigate the system alone.

Conclusion

Only a small percentage of injured workers who settle their cases are using professional administrators. But that is changing, especially since CMS’s recommendation last year that injured parties seek third-party assistance/professional administration after settling their claims.

Now, some of these companies have expanded their services to allow anyone to tap into some of the benefits of a professional administration without a formal commitment.

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

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.

As much as some injured workers’ complain about workers’ compensation, the system has some perks like a nurse case manager and adjuster to help coordinate appointments, deal with the administrative burden, and check in to ensure everything is going smoothly on the claim. Giving up this support can be a paralyzing fear and prevent a claim settlement.  This challenge is particularly true in complex catastrophic cases.

The good news is professional administrators are becoming increasingly popular — even Medicare “highly recommends” using them. Some of these organizations are going the extra mile to provide true one-on-one help for injured workers with complicated needs.

Professional Administrators

Professional administrators handle many of the administrative tasks on behalf of the injured worker once they’ve settled their Workers’ Compensation claim.

Managing the settlement money, paying medical bills, and complying with government regulations such as Medicare reporting requirements can be a nightmare. The professional administrator acts as an advocate for the injured worker to ensure they successfully navigate the health care system post-settlement.

Additional tasks include:

• Finding and setting appointments with appropriate physicians and specialists
• Taking care of all durable medical equipment needs
• Ensuring that, at the very least, any payments for medical care don’t exceed the state’s medical fee schedule
• Deciding whether recommended medical procedures should be undertaken

The role of the professional is to guide the injured worker through this process, by

1. Coordinating medical care
2. Processing medical payments
3. Applying discounts to medical office visits, medications, and procedures
4. Performing annual prescription reviews to assess medications that are prescribed
5. Complying with government requirements
6. Answering any questions of the injured worker

Post Settlement Help for Catastrophic Cases

While the services of professional administration are a tremendous benefit and offer peace of mind for the majority of injured workers who settle their claims, some need additional help and support. For them, a new service is appropriate.

Some professional administrators have developed teams of nurse care partners that specifically focus on injured workers with particularly complex medical situations; those who are brain injured, wheelchair bound, suffering from limb loss and depression and have difficulty with activities of daily living. Despite the shortcomings of the workers’ comp system, many in this situation are hesitant to settle their workers’ compensation claim for fear of losing the system’s support.

This innovative solution of providing nurse care partners provides a holistic focus on the injured worker. These partners will engage in conversations with injured workers, providing guidance and support about their treatment plan, medications, upcoming surgeries and any other concerns they have. This discussion allows the injured worker to make informed decisions about their healthcare, empowering them to take control of their lives. Additional benefits they provide include:

1. Ensure monthly supplies of medications are provided on time
2. Discuss potential post-surgical complications and recovery
3. Provide insights into the long-term effects of medications and treatments related to the injured worker’s condition
4. Assist injured worker in understanding their health care options, empowering them to make their own healthcare decisions
5. Coordinate treatments for any unexpected complications that may arise
6. Finding solutions to durable medical equipment needs
7. Identify and discuss potential savings opportunities with the injured worker so they can make their own informed decisions
8. Provide one-on-one support

Case Study: Henry* (case study provided by Ametros)

Henry* had lost both legs after a severe motor vehicle injury over two decades ago. In addition to his medical issues, he also suffers from depression, anxiety, and Post-Traumatic Stress Disorder.

Roadblock to Settlement

• The only thing stronger than Henry’s desire to settle his claim was his concern over losing the support of the nurse case manager with whom he had developed a close relationship throughout the years.
• He learned of the post-settlement assistance he could receive through a professional administrator and was encouraged to settle, though not fully convinced.
• He knew he required an extra level of support.

Catalyst to Settlement

• What ultimately changed Henry’s mind was learning about Ametros’ Health Navigator service and how its post-settlement care could impact his life.

Post-Settlement Care

• As promised, Ametros sent a nurse, Melody, to meet Henry and conduct a wellness assessment in-person to understand all of his wants and needs. She established a direct line with Henry, built a rapport and let him know she would be available to help him navigate the complex healthcare system.
• Before Henry settled his claim, Melody gathered all the medical information needed to make sure the transition would be smooth.
• Henry settled his claim last December and Melody continued to act as Henry’s dedicated Care Partner.
• Since then, Melody has been working with Henry closely. Initially, Henry contacted Melody multiple times each day with questions and concerns she could help address. His contacts are less frequent now, but he has come to trust and rely on her to be his advocate.

*name changed for privacy

Conclusion

Knowing that someone will be available to help navigate the complicated healthcare system leads many injured workers with long-standing claims to agree to settle. Now there is an extra layer of advocacy to help the most seriously injured take charge of their lives.

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

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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 combination of professional administration with a structured settlement (annuity) is often the best way to protect an injured party’s settlement dollars in the event of an unexpectedly very costly year due to higher-than-anticipated medical needs after settlement. The combination of these services in a costly scenario allows the injured party to access more coverage from Medicare and pay less out of their own pocket.

What Is Professional Administration?

Professional administration involves the use of a professional third party to help manage the injured party’s medical settlement funds or Medicare Set Aside (MSA) after settlement.

“Professional administration achieves two important goals,” says Marques Torbert, CEO of Ametros. “It saves the injured party significant money on their medical expenses by providing them with access to discounted medical network prices, and it ensures that all their reporting to Medicare for a Medicare Set Aside account is done properly.”

When an MSA account runs out of funds and reaches a zero-dollar account balance, as long as it is administered properly Medicare agrees to step in as the secondary payer covering the continuing and needed medical expenses. Medicare “highly recommends” the use of professional administration to make sure that funds are extended as long as possible through discounts, used appropriately for medical care and ultimately reported properly so that Medicare will know when to step in as the payer.

What Is a Structured Settlement?

A structured settlement is a stream of periodic payments paid to an injured party by the defendant primarily through the purchase of annuity (fixed and determinable) issued directly by highly rated life insurance companies. In the case of an MSA, the annuity will enable the issuance of annual payments that cover the entire MSA amount.

As Eric Vaughn, executive director of the National Structured Settlements Trade Association, explains, “Structured settlements provide an injured party with a reliable, stable source of income which can be critical to cover their ongoing medical costs. A structured settlement removes the variability of the markets and guesswork out of funding their future expenses.”

The Centers for Medicare and Medicaid Services (“CMS” or “Medicare”) is accustomed to the use of annuities with MSAs. Medicare has provided clear guidelines for how the MSA should be set up when annuities are involved, with two years of costs funded upfront and the rest of the cost broken out annually over the injured person’s lifetime. When an MSA is sent to Medicare for approval, Medicare will review and approve MSAs with structures.

When assessing future medical costs in an MSA, it’s important to take a very conservative approach.

Using a structured settlement and professional administration for the MSA can provide valuable protection to an injured party should they have a costly year. The combination of these services will allow the injured party to properly get coverage from Medicare in the event their MSA funds run out. That Medicare coverage can, in many cases, ensure that the injured person pays less out of their own pocket.

As Vaughn points out, “Annuities are a natural fit with MSAs, given the annual medical expenses are already budgeted over the individual’s lifetime.” Torbert adds, “Attorneys and adjusters alike are recognizing the power of combining the annuity with administration not only to assist the injured party in saving money, but also to provide them with support for their medical care over the long run.”

It’s important to keep in mind, not all professional administrators and annuities are the same. Choose an administrator that provides the best service and saves the injured party most on medical expenses. When choosing annuities, it’s important to work with a trusted broker and to select a reliable, highly rated life insurance company. Speak with experts in both administration and structures to make sure you and your client make the right selection to ensure you have the most financial protection.

Case Study

Let’s take a look at an example of how an injured party, Joe, can leverage these two important services to protect his settlement dollars in the MSA.

Let’s assume that Joe accepted a settlement with an MSA and has a life expectancy of 10 years.

Scenario #1

In the first, good scenario, Joe is doing well and is using professional administration to receive discounts so he has relatively low spending of a few thousand dollars a year on MSA medical items.

Both a lump sum and structured account would have the same amount spent at the end of Joe’s life expectancy.

Scenario #2

Let’s take a look at the unique protection that professional administration and a structured settlement together can offer Joe in the scenario where he undergoes a costly surgery or other adverse outcomes.

Let’s assume that Joe is offered the exact same MSA settlement amount and starts out on the same pace. Unfortunately, three years after settlement, Joe needs to pay for a complex surgery.

With a lump sum account, Joe ends up having to pay for the remaining cost of the surgery after using what funds he currently has in his MSA account. Unfortunately, with a lump sum settlement, he will never receive MSA funds again. If he is Medicare-eligible, Medicare will cover about 80% of the remaining balance, and Joe will have to pay 20% out of pocket for all future treatment costs for the rest of his life (such as Medicare premiums and his regular treatments).

If Joe has a structured account managed by a professional administrator, his funds will take a large hit at the time of his surgery, but the administrator will have ensured the funds were spent appropriately so Medicare will step in as the primary payor. Medicare will pay for 80%, and he will take care of 20% out of pocket for the remaining balance of the surgery only for that year. After that year, his account will continue to replenish annually, and he can use his MSA funds to pay for future treatment.

Summary

In summary, the outcomes for Joe can be strikingly different. With the lump sum settlement, he is losing personal funds, and he never again has the chance to build value in his MSA account. With the structured settlement, Joe is better off over time. The way Joe settles his case has a very powerful impact on his finances, and the combination of a structured settlement and professional administration protects the injured party more effectively.

Author Porter Leslie, President of Ametros. He 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, he worked in investment banking, private equity, and corporate development. Leslie 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. He is fluent in Spanish and Portuguese.

Injured workers with long-standing claims and ongoing medical concerns are often hesitant to settle their case because they fear running out of money too soon and potentially having no one to turn to for help. Increasingly, injured workers and their advocates are finding they can alleviate both concerns — by working with a professional administrator.

Professional Administration

Professional administrators are not new to the workers’ compensation system; however, few injured workers know or understand what they do and how they can help. Meanwhile, a growing number of claim settlements now involve a professional administrator.

Recent advancements in pricing and capabilities have made administration a more cost-effective and elegant solution. Those who go with a professional administrator find they have more freedom of choice than under the workers’ compensation system, but can still take advantage of expert assistance and discounted prices for their medical needs.

Companies that excel in professional administration have large medical networks to offer discounts — for medical office visits, medications and durable medical equipment. The individuals that settle their cases, also known as “members,” save an estimated 20-30% on their annual medical care. These organizations also offer personal expertise to help navigate the complex healthcare system. Members can reap these benefits, without giving up precious dollars.

What members do give up are the restrictions of the workers’ compensation system; such as

• Utilization review
• Being required to see providers in inconvenient locations
• Difficulty contacting someone who understands their case and needs

Professional administrators also handle government regulations for Medicare, Medicaid, and other government benefit programs. They take care of all reporting requirements.

Control of Funds

Some professional administrators are now using technology to simplify and assist members to get the benefit of expert oversight while maintaining full control over their money. Here’s how it works:

The professional administrator provides the member with a healthcare savings card that is used to pay for all medical care. The injured party or “member” receives their settlement money and deposits it in their own personal bank. Then, the member places the debit card for that account on file with the administrator for use for medical expenses. All subsequent medical bills go directly to the professional administrator, which applies its discounts and pays the bills from the debit card on file. There are no co-pays or out-of-pocket expenses involved.

However, the member has complete control over the account at all times. He or she can deposit and withdraw funds at any time. Activity on the account can be tracked by the professional administrator and available for viewing at any time by the member — including the discounts generated by using the card.

This newer online system can be easily accessed through smartphones and other electronic devices to see activity on the account. They also provide notifications, about advanced trending, for example, to monitor the account spending over a specific time period.

The platform functions similar to a clearinghouse by managing transactions and ensuring money is available to support any charges. Support personnel is available to answer any questions.

Some of the country’s largest companies offer the service at settlement to give their employees a better experience and to show goodwill. The healthcare savings card is just the latest service to simplify the injured worker’s post-settlement experience.

What to Look For

As with any industry, some professional administrators are better able to assist members than others. When looking at these companies, here are some of the issues to consider:

1. Experience. The professional administrator should be comprised of people with solid backgrounds in all aspects of insurance, finance, and healthcare.
2. Large networks. The more robust the medical networks, the better the savings for the injured party. The company should be contracted with multiple providers, pharmacies, and durable medical equipment companies throughout the country.
3. Price comparisons. Ideally, the company should be able to provide a comparison report showing the retail prices for the injured worker’s specific medications and the discounts currently offered through the professional administrator.
4. Medicare expertise. Since a majority of workers’ compensation settlements involve Medicare Set-Asides, the professional administrator should be able to competently handle all reporting aspects required by the Centers for Medicare and Medicaid Services.
5. 24-Hour Help. The company should provide easy access to support personnel who can help coordinate medical care and recommend qualified providers.
6. Expansive Resource Outreach. Each injured worker has different needs, and the professional administrator should have access to a wide network of people and organizations that can assist.

Summary

Injured workers seeking to settle their claims now have an option to get the support they need to manage their funds and comply with various regulations. A competent professional administrator can ensure these injured workers move forward with their lives.

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

Contact: mstack@reduceyourworkerscomp.com.

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

©2018 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.

A new research brief on MSAs and Workers’ Compensation by the National Council on Compensation Insurance (NCCI) reveals significant opportunities to help injured parties, especially through use of support systems like a professional administrator.

The brief updates a previous report published in 2014. That document considered data on MSA submissions to the Centers for Medicare and Medicaid Services (CMS) between September 2009 and November 2013. The latest version also includes information from 2014 and 2015 submissions, based on 11,500 MSA submissions.

As Medicare is a secondary payer for work-related injuries, insurance carriers must protect Medicare’s interests when settling claims. Many insurers create MSA funds to help pay for injury-related costs that Medicare might otherwise pay. There is no legal requirement to submit a proposed MSA to CMS; however many insurers choose to do so. Once the CMS-approved set-aside amount is spent and properly accounted for to CMS, Medicare will pay for future covered expenses.

Findings and Discussion

• “The largest share of MSAs are submitted about four years after the injury. The number of submissions gradually decreases after that, but it is not uncommon to have a submission 20 or 25 years from the accident.”

The amount of the MSA increases with each passing year. As NCCI’s report notes, in the first year, the average amount of an approved MSA is $53,213; by year 5, that has increased to $105,430; and by year 20, it is $168,469.  Clearly, it makes sense for payers to settle claims as soon as possible. It also benefits the injured party, who is in a better position to move on with his life and not dwell in a disability mindset.

• “Almost 95% of submissions are for claimants who are Medicare-eligible.”

• “Almost all MSA settlements are self-administered. Larger MSAs are more likely to be professionally administered than smaller MSAs.”

In fact, only 2 percent of MSAs are handled by professional administrators. This is discouraging, as that means 98 percent of injured parties with MSAs are themselves responsible for complying with all the Medicare requirements, including:­

1. Maintain line item detail for the duration of eligibility
2. Use the fund only for Medicare covered expenses
3. Pay according to the appropriate fee schedule
4. Prepare and submit annual accounting report to CMS
5. Deposit the fund into an interest-bearing account
6. Use the fund only for treatments related to the injury

Failing to comply with all six requirements puts the injured party at risk of being denied benefits by Medicare.

In addition to compliance, having a professional administrator involved can also extend the life of the MSA fund. Savings on provider bills, durable medical equipment, medical treatment, and prescriptions are only available to injured parties who have a professional administrator involved with their post-settlement scenario.

• “While many MSAs have been approved by CMS as submitted, CMS often requires that the MSA be increased.” In fact, the gap between the average amount submitted for an MSA and the amount approved by CMS increased slightly from 2013 to 2015.
• 2013 — Submitted amount: $101,260; approved amount: $111,793 – a difference of $10, 533.
• 2015 — Submitted amount: $88,911; approved amount: $103,288 – a difference of $14,377.

Much of the increase in this gap is due to prescription medications.

• “Overall, drugs are about half of MSA amounts, but for more than one-third of MSAs, drugs are less than 10 percent of the MSA value.”

Working with a professional administrator can entitle injured parties to significant discounts on medical costs. Injured parties who are shown the cost differences through a professional administrator compared to the retail prices they would otherwise pay are often pleasantly surprised to see how much they can save.

• “More than half of MSA claimants seek claimant attorney assistance when establishing MSA arrangements”

54 percent of MSAs involve an attorney, while the remaining 46 percent do not.

Injured parties leery of settling their claims often feel overwhelmed by the various requirements for compliance, as well as the fear of managing their money so they don’t run out too soon. Professional administrators can help guide injured parties (and all involved parties) through the settlement maze, and stay with them after settlement.

Author Leah Fusco, Chief of Staff, Ametros. Leah manages all of Ametros’ clients and partners, manages and supports the sales team, analyzes trends, and provides reporting and analytics. She brings over a decade of claims, settlement consultation and account management experience to Ametros. Prior to joining Ametros, Leah was a manager within the Medicare Compliance Department at Sedgwick, a leading third-party claims administrator. Before working with Sedgwick, she worked in Claims Management at PRM Claim Services, and Triad Group. Leah obtained her A.A. in Humanities and Social Sciences from Schenectady County College, and her B.S in Business Management from The Sage Colleges. She is CMSP certified, and is also a licensed New York Independent Adjuster, and a licensed life broker. Leah is an officer of the Albany Claims Association. She currently resides in Albany, New York with her husband and son.

1.  “What is my risk if my client makes mistakes with their MSA?”

2. “What’s the chance that Medicare denies my client’s care because they misused or misreported their Medicare Set Aside funds?

3. “Why can’t my client just find coverage through another private insurance plan?”

Determining the best approach to address MSAs with their client in the settlement process can be a challenge for many plaintiff attorneys. The questions above are common amongst plaintiff attorneys who struggle to provide comprehensive advice to their clients regarding the regulations and ramifications of the Medicare Secondary Payer statute (“MSP”).

There are still quite a few attorneys in the workers’ compensation and liability industries that try to find ways to avoid the need for a Medicare Set-Aside (“MSA”) altogether when their clients settle their claims. It is understandable; the MSP regulations are complex, and the guidelines from the Centers for Medicare and Medicaid Services (“CMS” or “Medicare”) restrict how their clients can use the settlement funds – which their clients do not like at all. In addition, most jurisdictions preclude attorneys from taking contingency fees on medical funds allocated for Medicare purposes.

These factors, among others, can lead attorneys to shy away from addressing MSP issues head-on with their clients and instead, consider risky approaches that may put them in danger of committing a malpractice claim. This article, in consultation with a number of the nation’s prominent plaintiff attorneys, addresses the less obvious aspects of MSP compliance and the common questions attorneys have, as well as how attorneys can best protect themselves and their clients as they address these issues.

Protect Your Client’s Benefits

4. “Will Medicare really deny my client’s benefits?”

5. “Show me a case where Medicare benefits were ever denied, or Medicare came after the client or attorney for misappropriated MSA funds?”

Denials of treatment from CMS after settlement occur daily. The Medicare Administrative Contractors in charge of approving all Medicare claims have systems in place to automatically deny injury-related treatments for individuals that have MSAs accounts with remaining funds. The Contractors are closely monitoring MSA account recipients using the Mandatory Insurance Reporting Section 111 data they receive from insurance carriers for every single settlement that involves a Medicare beneficiary. They match this data with the injured party’s MSA reporting to verify if the MSA has funding to pay, or if Medicare should accept payment.

Generally, very few of the MSA accounts managed by professional administration exhaust, when that occurs, the administrator should automatically notify Medicare of the account’s exhaustion. We are often contacted by Medicare to review the treatments that were paid and to determine exactly when the funds were exhausted. In most cases, Medicare requires receipt of this information before they begin providing coverage for any injury-related bills. There can be a number of unique issues that arise after settlement, such as conditional payments, denials, etc., that require specialized attention to be resolved.

There are no known litigated cases against Medicare for cutting off benefits due to misuse of MSA funds; however, that does not mean that denials of care are not routinely taking place. The ability to deny care and remain the secondary payer is the fundamental right that Medicare established in the federal MSP statute. Most industry experts have seen Medicare increase its commitment to monitoring MSA accounts over the past several years and expect that will continue into the future. In addition to workers compensation cases, Medicare has indicated that it plans to also institute a review process for liability cases as well; it’s a clear sign that, if anything, Medicare is paying closer attention to all settlements.

Facts about MSAs:

• There is a Federal Statute on MSP under Section XVIII of the Social Security Act 
• There are hundreds of pages of information and reference guides from the Centers for Medicare & Medicaid Services (CMS)
• There are also hundreds of pages of CMS memos with guidance on how to abide by the statute
• The Federal Government has made it very clear that it takes MSP compliance seriously. (search the substantial documentation Medicare has put out regarding MSP compliance and administration.)

The reference guides and memos provided by CMS have some authority, but the authority is not statutory. An attorney could follow all the guidance provided by CMS, yet still, run some minimal risk of failing to address the regulations under the law. Nonetheless, the safest approach is to recognize and consider MSP laws in settlement proceedings which requires providing thorough client guidance and a qualified advocate, to help the client abide by the guidelines. By doing this, the attorney can show that they did everything possible to protect the client’s Medicare benefits thus avoiding any successful claim of malpractice.

Insurance Coverage Misconceptions

6. “ But can’t my clients find coverage through another private insurance plan after they settle?”

7. “What about the Affordable Care Act?”

There is a frequent misconception by attorneys that their clients can get insurance coverage elsewhere and thereby not have to worry about an MSA. Although sometimes the injured party may initially be able to get another entity to cover their injury, most of the time insurance carriers are including exemptions for care relating to settled claims. Using another plan may be a good near-term way to save some of the MSA funds, but it may result in confusion over the long-term and the client spending MSA funds to pay for the premiums and deductibles of these new plans which will put them out of compliance with Medicare’s guidelines.

Private insurance plans, whether they be Medicare Advantage, Affordable Care Act plans, or provided through an employer, only last for one year at a time. MSA funds are meant to be used properly for the client’s lifetime. If the injured party believes they can rely on a private plan to cover their injury costs, they may be more incentivized to use their MSA funds to pay for that plan or for other non-injury related costs. If the private plan they rely upon ceases to exist, increases premiums drastically, or starts to deny their injury-related claims, the client will have put themselves in a very compromised position. At that point, they will likely not have a record of what they did with their MSA funds which will result in Medicare denials if they exhaust their funds. At the heart of the matter, it is risky to assume that a private insurance plan will be in place and available to the injured party for 10, 15 or 20+ years after settlement.

Over the past several years, private insurance plans have become much more vigilant on MSP matters. Other insurance entities are becoming increasingly savvy regarding the fact that they should not be the primary payer for these work-related or personal injuries and are finding ways to avoid paying. Medicare is the ultimate backstop for an individual’s healthcare, so if the injured party has misused their MSA funds and can’t get coverage, there really is nothing left to assist them with their care. When the client has exhausted their funds and cannot find private coverage, they will likely make two calls: The first is to their attorney, the second is to a malpractice attorney.

What is My Responsibility?

8. “I advised them of the risks, what else am I supposed to do?”

For attorneys that recognize the importance of having their clients thoroughly advised and aware of MSP guidelines, they are off to a good start. Many attorneys give their client an overview of the MSA’s purpose, but struggle to determine how they can truly protect themselves and their client once they hand their client what can be a sizable amount of money.

Medicare does allow for self-administration of MSA’s, but there’s good reason that Medicare recently came out and “highly recommended” professional administration (See Section 17 of Medicare’s updated reference guide).

Going through self-administration alone has often proven to be too much of a burden and challenge for the injured party. Medicare seems to have realized that its 31-page Self-Administration Toolkit is just too complicated for the average individual to follow. Attorneys need to consider whether their client understands what is happening and must determine whether they can realistically handle what is being asked of them for the rest of their lives. Or as Medicare puts it: will they be a “competent administrator?” Providing a professional administrator to help the client with administration of the MSA funds not only shows good faith to abide by Medicare’s recommendation, but it also helps the injured party save money on their medical care, remain compliant and have a resource to rely upon so that they are not continually reaching out to the attorney after settlement.

Get Professional Administration Involved

As with all decisions, attorneys should consider what approach sets both their clients and themselves up for success and the most defensible case if there are complications down the road. Taking a little extra time to get a professional administrator involved to explain what the MSA is and to set up administration will save the attorney potential exposure on a number of issues. Also, one should not forget, typically carriers are offering to pay for the administration service, so it is no extra cost to the attorney or the injured party.

Plaintiff attorneys take enough risks managing and growing their businesses and fighting for their client’s rights; there is no need to add to those challenges by risking any potential issues with Medicare.

If you have questions about MSA compliance and administration, don’t hesitate to reach out to our team of experts.

Porter Leslie is the President of Ametros. Porter has a passion for directing the growth strategy of Ametros and working 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. Contact: https://www.ametroscards.com/porter-leslie/

An injured worker with an open claim for 15 years finally agreed to settle, and it all came down to an extra $2,000 – $3,000 for a much wanted trip to Alaska. This real claim is very common in our industry and points to a glaring deficiency: a total lack of empathy for the injured worker.

Companies often have many cases that have been on the books for months or even years. Adjusters may have approached the injured workers to see if they’d like to settle and learned, as much as the claimant doesn’t like the workers’ compensation system, he has no interest in closing the case.

There are myriad reasons for not settling a claim, but there is no way to know the real reason unless someone asks. That’s where a professional administrator can make a huge impact.

Reasons Claims Stay Open

Workers’ compensation claims are not like fine wine; they don’t improve with age. So keeping a claim open indefinitely doesn’t make good business sense, and it’s often not in the best interest of the injured worker, either.

The many reasons injured workers don’t want to settle their claims include:

• Disagreement on total value.
• Advice from attorneys, family members or friends not to settle.
• Concern they will run out of money.
• Fearful of going it on their own — even if they don’t like having to deal with a claims adjuster or having medical treatment denied.
• Don’t know how to ensure they are complying with various laws and regulations, such as Medicare.

And perhaps the biggest reason — they are afraid of change. Much as they may abhor dealing with the workers’ compensation system, the alternative seems worse. As the saying goes, ‘better the devil you know than the devil you don’t.’

So how can companies best address these legacy claims? Possibly with a neutral third party.

Professional Administrators

The claim noted above settled when a professional administrator became involved and, more importantly, spent some time getting to know the injured worker. He met with the worker and learned that he and his wife had dreamed of going to Alaska but were never able to because of his injuries and the fear they would not have enough money in the future. He then went to the carrier to see if additional monies could be added to the most recently proposed settlement. When he told the couple that the insurer had agreed to an additional $2,000 to $3,000, the injured worker and his wife broke down in tears and agreed to the settlement.

Showing empathy for an injured worker is key to getting an agreement. Injured workers need to be heard and understood. Those with long-term claims have had their lives turned upside down. Someone willing to listen and grasp their needs can have a major impact on moving the claim toward closure.

The presence of the professional administrator added several other positive elements to the scenario.

• Advocacy. He explained exactly how the settlement would address the injured worker’s future needs. A professional administrator acts as an advocate for the employee throughout his life, helping to direct him to medical providers and dealing with the settlement money. That addresses one of the main concerns of employees reluctant to settle — the idea that someone will still be there to guide them through the process.

• Neutral party. Professional administrators secure substantial discounts through their medical networks, which is also how they are paid. The fact that it is a neutral party adds another element of comfort for the injured worker.

• No more denials. Also, he explained to the injured worker that he would no longer face denials for requested medical treatment, once the settlement was completed.

Experienced professional administrators are able to think outside the box.

Summary

Injured workers are in a situation they did not seek nor expect, and are typically fearful of having no money for future medical issues, and to take care of their families.

Having an advocate who is a neutral party can understand their needs and coordinate a successful settlement to help them get on with their lives and get their claims closed.

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

Contact: mstack@reduceyourworkerscomp.com.

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

©2017 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.