Workers’ compensation cases as well as liability cases are often complex, and one of the most common challenges is reaching a settlement for the injured person’s future medical costs. Attorneys handling such cases have to deal with a number of medical records and often prefer to use the assistance of a medical review service to ease the process of medical records review. Most of these cases are settled because keeping them open could prove to be quite distressing, frustrating and long drawn out. Employers and insurers often limit the risk of facing an open-ended medical claim in the future by obtaining federal approval for their Medicare Set Aside (MSA) arrangements for workers’ compensation settlements.
Medicare Set Asides and Challenges Involved
Settling a workers’ compensation claim has its own share of challenges. When trying to settle a workers’ compensation claim, an employer, insurer or third party administrator that uses a traditional Medicare Secondary Payer (MSP) product will have to handle a large number of documents and communications with the CMS (Centers for Medicare & Medicaid Services) that could delay the settlement further. The entire process of ensuring that the latest updated medical records, payment histories, settlement terms, and pharmacy ledgers are submitted to Medicare for review and approval is time intensive. And, even after settlement, claimants are not given sufficient guidance regarding how to use the funds they receive.
Once a workers’ compensation claim is settled, a Medicare Set Aside (MSA) allocation has to be prepared according to CMS guidelines. This is for all future claim-related medical expenses that are covered and otherwise reimbursable by Medicare. When a proposed MSA amount is submitted to CMS for review and it is approved, that amount must be properly spent before Medicare will begin to pay for care related to the workers’ compensation claim. The MSA allocation is to estimate the total cost that will be incurred for medical expenses that are otherwise reimbursable by Medicare for claim-associated conditions during the course of the claimant’s life and to set aside sufficient funds from the settlement, judgment, or award to cover those costs.
When an MSA allocation is prepared and submitted according to the guidelines of CMS, Medicare may suggest an unreasonable or large amount. This could prove too expensive for the defendant or insurer and often result in non-consummation of settlement.
How a Professional Administrator Helps
This is where MSA programs or products provided by MSP compliance organizations or professional administrators of MSA become useful. When you utilize such a service, they do not submit the MSA amount for Medicare’s review and approval. Incidentally, it is not mandatory to submit a workers’ compensation MSA amount for review. The MSP compliance organization would use its team of medical professionals, claims professionals and attorneys to project future Medicare medical needs using evidence-based medicine, standards of care and treatment regimes for claimants. Their expert approach would ensure a more accurate projection of the claimant’s needs.
Though MSA review by CMS is not mandatory, workers’ compensation claimants must necessarily protect Medicare’s interests. The only mandatory MSP obligations involve avoiding a cost shift of injury-related expenses to Medicare when closing out future medical treatment in a settlement, reimbursing conditional payments and reporting under Section 111.
- A tie-up with an MSP compliance service is advantageous because it will help the claimants move forward with the settlement, avoiding the delay that comes with CMS’ review process.
- The objective of an MSA is to avoid a cost shift of injury related Medicare covered expenses to Medicare in the future, and an MSP compliance organization can ensure this by projecting the future care that is likely to occur in the future instead of all the remotely possible care that CMS would add into their estimate.
- This MSA program can be self administered or professionally administered by the service provider.
- Another advantage the professional administrator offers is that if unfortunately the funds are exhausted and the claimant’s injury related medical bills are submitted to Medicare, the administrator will defend any challenges CMS may project regarding the reasonableness of the MSA that was funded at the time of settlement.
- Claims can be settled faster and the process is not as taxing as with CMS because the MSP compliance organization does not require as many documents or information as required by Medicare. They only need a fair picture of the claimant’s injury and how it is being treated.
- They offer defense and indemnification for all parties involved in a settlement.
- They help claimants determine how to distribute the settlement funds.
- They will help claimants access the medical services required and pay providers at a rate that is more along the lines of how they were originally funded. (This is in contrast to the traditional approach wherein claimants would pay for those services at a retail rate and funds would be exhausted too soon.)
- The professional administrator will ensure that the injured individual receives the medical treatment he/she needs after settlement, and also that their future medical care requirements are handled smoothly.
- When a professional administrator manages the settlement funds, they will have a clear perspective regarding the medical treatment costs. This information will be used as a basis for negotiations on and understanding the cost of future medical expenses.
Attorneys handling workers’ compensation cases utilize the service of professional administrators on their settlements. This ensures that the injured claimant is taken care of after settlement and also that he/she will receive the most out of the medical funds. Just as solutions such as medical record review provided by a reliable medical review company lightens the workload of attorneys and allows them to focus on what they do best, a professional MSP compliance organization can save attorneys valuable time and provide the best options for their clients. Professional administration automates all of the MSA reporting that is mandatory and ensures that the treatments received by the claimant are all MSA eligible. If a new drug or treatment not originally listed in the MSA is recommended, the professional administrator would make sure that the claimant gets a letter of medical necessity from his or her doctor to document the expense appropriately. Professional administration of MSA and other funds will minimize the chances of confusion or liability in the long term.