The Best Tidbits of News From The Workers Comp Community


While there have been no formal updates to the CMS website, the WCRC recently provided an update to Gould & Lamb that it will have all remaining cases that were not part of the previous streamlined process resolved by February 28, 2013, or will provide the specific information that is necessary for the approval process to be completed. Read more…
From skiing injuries to sniffles, there’s no season like winter for thinking fond thoughts of the American health care system. And there’s no time like exactly one billing period later for screaming curses at the American health care system.
With the Affordable Care Act here to stay and its changes already in motion, we present this week’s Cavalcade of Risk: articles on health insurance and its impact on our lives and economy.  Read more…
Lexis Nexis News:
"Larson's May Help Interpret Law, But Can't Supplant Text of Statute, by Thomas A. Robinson. Larson's Workers' Compensation Law is often used by federal and state courts to explain and interpret a workers' compensation statute, particularly when that statute is ambiguous. In a recent decision, the Kansas Supreme Court indicated that although consulting the Larson treatise is in order when the statute is unclear, it may not serve to supplant or alter the actual text of a statute. Read more about this case and other cases on Credit for Pension Benefits, Intentional Tort, and Substantially Certain Rule."
"Strong Association Exists Between AMA Guides Impairment Ratings and Earnings Losses, But Losses Vary Significantly Across Body Regions, by  Robert G. Rassp, Esq. & Robin E. Kobayashi, J.D. A new major study funded by CHSWC focuses on the AMA Guides Fifth Edition in California but has implications for the AMA Guides Fourth and Sixth Editions used in other states. The study purports to quell the main criticism that the AMA Guides can only measure severity of impairmentand not disability. The study examines whether there is a strong association between AMA-based impairment ratings and earnings losses for workers' comp claimants with permanent disabilities, thereby indicating that impairment ratings accurately reflect the effect of impairments on the ability to work. The study also examines…Read more"
Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  Contact:
©2013 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Five Practical Ways to Reduce Medicare Set Asides (MSA)

There is always a bit of sticker-shock when receiving the amount of the MSA back from the company that provides the numbers. Depending on the age of the claimant, the younger the age of the person the MSA is being settled for, the more astronomical the amount can be. But the same can be said for older claimants as well, due to personal health issues and other conditions, both work related and not. The purpose of the MSA is to have the carrier pay the actual cost of needed treatment, until the Medicare coverage kicks in to pay. But the number received for the MSA may not be the actual costs the carrier has an obligation to cover. Frequently, there are errors that may be included in the costs, and those errors can be costly. So how can that cost be decreased and also the MSA be approved by CMS?  How should these MSA cases be handled in general?


  1.  Check the prescriptions and if they are related
    If it is preferable to settle the claimand an MSA is needed, it will include the cost of medications that are applicable to the claim. But when Medicare sees a person that has Medicare coverage and also a comp claim, they can lump everything together, instead of separating work related conditions from the non-work related ones. Older employees may be taking several medications for various conditions, and it is possible that few, if any, are related to the injury.CMS does not necessarily take the time to sift through the file and sort it; they expect that to be done. Be sure to pay attention to all of the listed diagnoses, and if the costs included that do not pertain to the claim are seen then state the dispute in writing and get it to the MSA provider and CMS to modify the numbers. Since the majority of older patients do not get intense invasive treatment, most treat with medications to alleviate the conditions. This is where medications that do not pertain to your claim are seen. Prescription medications can amount to the largest cost of the MSA, so if correct figures of what is required to be covered can be assessed, there can be a significant decrease in the MSA cost. [WCx]


  1.  Settle the claim before the need for the MSA
    The best way to save costswhen dealing with CMS is to not deal with them at all. If legally the claim can be settled without having to report it to Medicare, that is much easier to resolve the exposure without the need for an MSA. When factoring in the costs of having to continue to pay wage and medical coverage for the injured worker while still working on negotiating the MSA, it could result in having to pay any decreased MSA cost in the form of coverage of wages and ongoing prescription/doctor costs. To avoid this break even scenario, just settle the claim! Big deal if there is $10,000 apart in the settlement negotiations! Think about these other costs and continued coverage, and in the end saving more money than if fighting for the MSA amount tooth and nail.


  1.  Try using an annuity to fund the settlement
    If the carrier and claimant are still way off in what they think the value of the case is, consider using an annuity to increase incentive to the claimant. In an annuity setting, you will fund the annuity with a certain amount, and by the time the annuity has run its course the claimant may net more money than settling up front. Usually the claimant is only interested in a lump sum of money that is readily accessible, but every now and then there is someone that is interested in the annuity option and it can be beneficial to both parties.

There are a ton of vendors to choose from when figuring out how an annuity works, and it certainly can be worth the time and effort to check it out, especially if it means being able to settle a case on a full and final basis. Plus if this does intrigue the claimant,  the claim may not have to be open forever. And every year that goes by is another year they are closer to possibly needing an MSA if wanting to settle on that full and final basis. Settling earlier may avoid the need for having an MSA.


  1.  Check the condition payment log for errors and duplicate charges
    As mentioned earlier, CMS does not really go through every claim with a fine tooth comb. They expect the carrier to do a lot of the legwork in sifting out what is related, and what is not. There is no more exact proof of this than in the conditional payments log. CMS expects the carrier to reimburse them for any charges Medicare covered that were actually related to the comp claim. The problem with this is that instead of billing the carrier just for those occupational injury charges, CMS seems to bill the carrier for every charge they have had in the recent past. So the lesson here is to review that conditional payment log very closely, and find charges that are unrelated to the comp claim and pull those out to advise CMS in writing that those charges are not related.  In this case, they can recalculate the payment log and resubmit it to the carrier for further review. This process can take months, if not years, and remember while this is going on ongoing wage loss and medical coverage still has to be provided. Time is of the essence so do not delay when receiving the payment log. If needing help decoding the paperwork ask a nurse case manager for assistance or use an outside vendor to help go through it.


  1.  Use an outside vendor or internal department to submit the MSA. 
    As just mentioned, the use of an outside vendoror internal department to help with the details of the MSA can be very cost effective. Adjusters have enough to do day in and day out, and these MSA issues themselves are a full time job to work on. They also carry very stiff legal fines if there are errors, and they need to be reviewed by people specially trained in MSA and CMS matters. Be thankful down the road that this is not an issue to tackle, and in the end it will save money on the claim as well. A professional MSA firm can help posture the claim to reduce MSA exposure.  [WCx]



Medicare involvement in claims is becoming more and more prevalent, prompting the need for the adjuster to have to multitask even more. But there are ways to work with CMS and handle those outrageous MSA costs by using the advice we discussed above. Just because an MSA and CMS have to be dealt with does not mean that the claim cannot be settled. Use the resources available and delegate as needed.



Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact:








Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.


©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at:


Medical Fraud in Workers Comp: You Might be Part of the Problem

Doctors and other providers who defraud the system for their own financial benefit are few, amounting to less than 4 percent. Yet, these few account for millions of dollars spent unnecessarily and without improved outcomes. Moreover, you could be helping these doctors defraud the system.
Fraudulent providers use tactics such as increasing the frequency and duration of medical services, billing at the highest levels regardless of state fee schedules, and billing repeatedly hoping to generate duplicate payments. Even more subversive are those who add multiple diagnoses to their exaggerated billing to avoid exposure by bill review systems. Such perpetrators also shrewdly submit bills using slightly altered names and addresses so their excesses are not easily noticed by electronic systems.
Modifying names and addresses is an easy and effective way to obfuscate data. Computer systems are literal, meaning they accept the data as it is. Consequently, adding a comma, reversing first and last names as they appear in one field, and adding or omitting a suite number, and abbreviating are all common ways to cause the system to create multiple records. Each iteration of the information is treated as unique by most computer systems so each becomes a separate record representing the same person or entity. While providers are sometimes dedicated perpetrators of these data deceptions, payers often contribute to the problem.
1.      Data quality is a people problem
Data quality in the provider demographic record in a computer system is critical to analyzing provider performance. How can individual provider performance be evaluated using analytics when multiple records representing the same person are present in the data? How can individual providers be identified when several hide behind the same TaxID number? Some providers use different names for the same office location or claim different specialties. Differentiating the good and bad is challenging.
Accurate data entry is critical to data quality, yet little attention is paid to this basic operational process. Good and bad doctors, as well as payers, are all guilty. A policy requiring names and addresses be pulled from a drop-down list of providers would prevent creating multiple entries caused by name reversals, misspellings, and key entry errors. This is basic software design. For those unable to create a hard-coded list from which the data entry person can select, a copy and paste policy should be established and enforced.
Manually typing information for each bill guarantees errors, record duplication, and confusion. Aggressive process management will significantly reduce the data entry problem.
Developing software interpretive rules to automatically correct and combine multiple records is fraught with uncertainties. For instance, a software rule might be written to interpret name reversals by looking for a comma indicating the last name is first. However, a comma is often not present, so even more confusion is created. Commas and periods, present or not, in names and address are a common issue of data quality and impossible to correct programmatically. It is a people problem.
2.      Unique identifier
Still, the best way to resolve the problem, whether it results from provider billing practices or data entry at the payer level, is to require unique provider identifiers such as NPI or state license numbers. NPI (National Provider Identifier) is a system required by CMS (Centers for Medicare and Medicaid Services). Individual providers must have an NPI number to be reimbursed by Medicare. Workers compensation payers should require the number on bills, a simple way to clarify provider identity. Of course, the same data entry rules must apply — either choose providers from drop down lists displaying NPI numbers or use the copy paste method to avoid inaccurate NPI number entry.
Most medical providers currently have NPI numbers because they want to be reimbursed by CMS for non-workers comp services. NPI numbers in the bill and in payers computer systems would eliminate the disguise offered by deliberate or unintended data duplication.
3.      Fighting medical fraud
Fighting medical fraud is more than challenging. But it is not only providers who contribute to the problem. Clean and complete provider records where the data are entered exactly the same way for every bill received from a provider will go a long way to correcting the problem. Duplicate records would be avoided and individual performance more accurately and fairly analyzed.
Evaluating provider performance and rating providers analytically depends on correct individual identification. Multiple records in the data for the same provider generated by sloppy data entry practices simply perpetuate and exaggerate the problem.

Author Karen Wolfe, BSN, MA, MBA, President/CEO, MedMetrics®, LLC.   Karen is founder and president of MedMetrics® LLC, an Internet-based Workers Compensation medical analytics company. She applies her medical knowledge to gathering, understanding and applying Workers Compensation data to the operational process. MedMetrics imports, integrates, and analyzes its clients’ medical billing and claims level data. MedMetrics uses several tools such as Predictive Intelligence Profiling and Medical Provider Performance Assessment to gather and analyze data. Contact: Phone: 541-390-1680;;

Our Workers Compensation Reduction Book:
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Beware of The Medicare Secondary Payer Act When Paying Workers Comp Claims

Fast changing and complicated laws relating to self-insured employers’ responsibilities under the Medicare Secondary Payer Act make it difficult for employers to keep up with the latest changes and regulations. There is one thing that is easy to understand – the Centers for Medicare and Medicaid Services (CMS) are aggressively pursuing recovery of payments they have made from any viable source including self-insured employers.
Employers need to be aware of the risk involved when an injured employee is also a Medicare or Medicaid beneficiary. Any expense paid by CMS for workers compensation-related medical care can be recovered from the self-insured employer, even if the workers compensation claim has been settled and closed. Therefore, if the injured employee is collecting Medicare benefits for non-work-related medical expenses, the self-insured employer should verify that CMS has been paid for any medical cost they have incurred due to work-related medical care.(WCxKit)
In routine workers compensation claims, the employee treats with the medical provider and the medical provider submits the medical bills to the claims office or medical fee schedule reviewer where they are processed and paid. The workers compensation claims where the self-insured employer gets into trouble are long-term claims where the employee is treated by more than one medical provider and often for both a work-related injury and non-work related medical issues. It is almost a certainty that sooner or later the employee gives his/her Medicare or Medicaid card to the workers compensation medical provider, resulting in CMS paying for the medical care.
It is not enough to accept the employee's statement they have not used their Medicare benefits or they have reimbursed Medicare or will reimburse Medicare. All known workers compensation medical bills should be paid directly to the medical provider. When settling the claim with an employee who has Medicare or Medicaid benefits, as a part of your pre-settlement procedure, run a query with CMS. Guidelines on how to submit a query are a part of the CMS Secondary Payer Act guidelines published on the CMS website:
It will not do the self-insured employer any good to include wording in the Compromise and Release, or Release and Settlement Agreement that the claimant will be responsible for the repayment to CMS for any medical expenses they have paid as a result of the workers compensation claim. The agreement is between you and the employee. CMS is not a part of the agreement. They can still enforce their recovery rights and will do so. It is also much easier for CMS to go after the deep pockets of the employer than the employee who has already spent the money that was supposed to cover any medical bills that were not previously paid by the workers compensation insurance.
CMS must be protected or you are not protecting your self-insured workers compensation program from paying the cost twice. Intentional misrepresentation by the employee or an honest mistake on your part will not prevent you from having to reimburse CMS for the medical care for which they have paid. CMS takes the position that it is your responsibility to know the requirements of the Secondary Payer Act and to comply with them. 
While the CMS manual is difficult and takes some time to read, learn, and understand, if you are going to be involved in processing workers compensation, you must read the manual. Become acquainted with the CMS guidelines. Most importantly, this is a very specialized area of workers compensation, so it's best to work with a firm that has expertise in this area. Let's the experts do what they do best – making sure all of the bases are covered.

Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See for more information. Contact:


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

5 Things Employers Must Know About Medicare Set-Aside Custodial Administration Arrangements interviewed Christie Luke, vice president of operations at Gould & Lamb, in Bradenton, FL about custodial administration arrangements for Medicare Set-Asides (MSAs). She started off  with the basics.
Define Medicare Set Aside
The Centers for Medicare/Medicaid Services (CMS) require their interests be protected prior to any settlement of the medical portion of a claim for qualified individuals. Medicare secondary payer laws are intended to prevent the shift of financial responsibility from primary payers to Medicare. The Medicare Set-Aside Agreement (MSA) allocates a portion of claims settlement for future medical expense, placed into custodial administration.
What is Custodial Administration?
Once a case is settled MSA funds are placed into custodial administration, or “handling,” into either the hands of the claimant (self administration) or with a custodian (professional administration) on the claimant’s behalf. This can include cases sent to CMS for approval, wherein the CMS approval indicates the intent of administration; or in cases where the client chose not to send to CMS but wants the case properly administered.(WCxKit)
Self Administration involves claimants’ handling their own money, with the intent to follow CMS’ guidelines.
Professional Administration involves a pre-designated custodian hired to administer MSA funds on the claimant's behalf. This usually occurs in larger settlements and/or those with severe injuries (e.g. traumatic brain injuries, paraplegics/quadriplegics).
Are there exceptions to those who need custodial arrangements?
There are no formal rules or regulations in most cases to those needing post-settlement administration. The exceptions are cases in which a court has deemed a person incompetent. In those cases the claimant is required to assign a custodian . In other cases, it is up to the settling parties how to proceed — this is driven by the risk of adversity to the carrier or self-insured employer.
What impact does it have on insured clients? Whom does it affect?
Post settlement administration programs can provide insured clients with comfort knowing they are providing claimants with post-settlement support. This ensures they are able to manage their Medicare Set Aside funds. In many of these cases, the parties are overwhelmed and, at times it may discourage them from entering into a settlement. Knowing these tools and resources are provided, reducing the potential negative actions by CMS and ensuring post-settlement compliance and risk mitigation is a benefit to all parties to settlement.
How should employers proceed when becoming aware of their obligations? How do they then set up an arrangement with a custodial administrator?
Once a carrier or self-insured employer has set standards with regard to their comfort level on post settlement administration, they can decide how to set processes and procedures. Generally, they should begin including information on the topic as soon as possible with the parties, at least during settlement discussions. This way, all of those involved are aware of available resources and costs, as well as the potential implications of non-compliance and the benefits of available programs.
During these discussions they can include administration companies. In order to ensure the administrator’s notifications to Medicare and to the claimant and their medical providers is seamless before and after settlement, they can check to be sure all information is accurate and the program is administered in a timely manner.(WCxKit)
Why is it better, more cost effective, etc., to use a formal administration company?
The administration of an MSA is quite challenging. It requires in-depth knowledge of Medicare policy, individual state fee schedules, and an understanding of Medicare coverage application and claim related care. Without this detailed knowledge, it is very easy to improperly disperse funds from an MSA or pay amounts above fee schedules, risking future Medicare benefits and entitlement.

Thank you, Christie for your time filling us in on this very important topic that all employers need to be aware of.
Author Christie Luke of Gould and Lamb has worked for nearly a decade in claims management, followed by over five years in all aspects of MSP compliance. She has an undergraduate degree in business and an MBA focusing in Healthcare Administration, Quality Management, and Economics. She is MSCC certified and is currently earning her Green Belt certification in Six Sigma. She is also a member of NAMSAP. Contact Christie at 941-798-2098, Ext.1314; or email:   GOULD And LAMB BLOG
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Proposal to Make Medicare Set-Aside Approval by CMS Optional

While proposed amendments to Maryland workers compensation regulations represent an improvement from the emergency rule adopted Jan. 4, 2010, the Property Casualty Insurers Association of America (PCI) reports it still has concerns regarding their impact.
The regulation, COMAR, would establish guidelines for reviewing and approving proposed workers comp settlement agreements in compliance with the review thresholds established by the federal Centers for Medicare and Medicaid Services (CMS) and spell out the data elements that must be part of all settlement agreements. (WCxKit)
According to PCI, the regulations will make settlement of Maryland workers comp claims more cumbersome and force injured or disabled workers to hire expensive legal assistance to navigate the complex language of those claims. That could mean higher costs not just for individuals, but also the state.
There are administrative fees and expenses associated with the administration of a Workers Compensation Medicare Set-Aside Arrangement (WCMSA) and potentially extra attorney fees for setting up a WCMSA,” said Richard Stokes, PCIs Maryland counsel. “This can add thousands of dollars to the cost of settling a Maryland workers compensation claim. In addition, the requirement that all formal set-aside allocations comply with Medicare guidelines adds extraordinary complexity to settlement submission and approval. This adds to the costs of carriers to handle workers compensation claims in Maryland and adds to the administrative costs of the Maryland Workers Compensation Commission to review and approve settlements.”
Additionally, the added complexity could mean that workers could have to wait 3-6 months for CMS approval of a settlement, creating an additional and unnecessary hardship. PCI proposes changing the regulation to make it optional, but not mandatory, for settlements to be submitted to CMS for approval. (WCxKit)
Injured or disabled workers in need should not have to face months of additional waiting for settlements that more bureaucratic red tape could cause,” Stokes added. “We recommend that this regulation be amended. We appreciate the opportunity to submit comments and be heard on this important issue.”
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See for more information. Contact:
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

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