Contributed by Ametros
In the course of settling a worker’s compensation or liability case, there are many obstacles to overcome. One of the most frequent challenges is reaching a settlement for the injured party’s future medical costs.
While settling may be a scary thought for the injured party, the truth is that keeping the case open can also prove to be a huge hassle for them. Subjecting their medical care to the insurance carrier’s Utilization Review guidelines and continuously having treatment and medications denied can often make an already difficult situation worse, typically resulting in more tension and frustration for both parties. In addition, sometimes the adjuster assigned to the injured individual will change, leading to a lot of confusion and no sense of security about their medical care. In many cases, the insurance carrier or payer will want to settle out a claim and eliminate responsibility for having to pay for ongoing medical care. Similarly, the injured party will wish to settle their case to have freedom to manage their injury and the related medical treatment the way they want and to no longer have to work with an adjuster.
A professional administrator is an independent party that can help both sides bridge the gaps to settling the future medical claim. Let’s take a look at the basics of professional administration and how a professional administrator can assist in the process of settling a claim.
What is a professional administrator?
At its core, a professional administrator is a company that makes sure the injured individual gets the medical treatment they need after settlement with personal attention to ensure their future medical care needs are handled smoothly.
The professional administrator establishes a dedicated bank account for the individual’s medical funds from settlement. Then, most administrators provide the claimant with a unique card that works just like a health insurance card. When the claimant shows the card at their pharmacy or doctor, the administrator receives the bill, applies group purchasing discounts, and then pays the bill automatically. The injured individual never touches the bill, but receives a record of every transaction, the savings and their account balance information.
In addition to handling all of the injured individual’s medical concerns, a professional administrator also automatically files all reporting for Medicare Set Aside (MSA) accounts thereby protecting the claimant’s Medicare benefits as well as the statute to take Medicare’s interests into consideration. The service can be used for any medical allocation (MSA or non-MSA medical funds) as the many benefits of the service extend beyond MSA reporting.
Ametros and its flagship product CareGuard is the largest pure-play professional administration provider in the country and the only company that offers online portals and access to preferred provider organizations (PPO) medical networks to the injured individuals to manage their account.
How can involving a professional administrator help determine an adequate settlement amount to cover future medical expenses?
Professional administrators currently manage the settlement funds of injured individuals who settled their cases, so they have a current and accurate perspective of how much medical treatment will cost. This information is extremely valuable to use as a basis for negotiations on and understanding the cost of future medical expenses.
For liability claims, allocating a portion of the settlement for future medical expenses can sometimes be more of an art than a science. Attorneys are frequently hunting for policy limits of the carriers and may assemble a life care plan for the injured party, but they are concurrently asking for pain and suffering damages as well. On large settlements, extensive life care plans and Medicare Set Asides (to be discussed further below) will be created to detail out the specific costs the injured party will need to cover after they settle.
For large claims, it is essential to consult a professional administrator to find out the pricing the administrator will offer when the injured individual is on their platform after settlement. This helps both parties have perspective on the true expected costs the injured party will face after settlement. Often times, due to volume discounts, the administrator can show deep discounts to the projected costs and can therefore help give the injured party comfort to settle the claim knowing they will have enough funds to cover their future medical costs.
When an individual is significantly injured at work, often times a Medicare Set Aside is created. The Omnibus Reconciliation Act of 1980. 42 U.S.C. Section 1395y established the Medicare Secondary Payer (MSP) Statute which asserts that The Center for Medicare and Medicaid Service’s (CMS) will be the “secondary payer” for medical costs when a primary payer, like an insurance carrier, exists. This Act applies to all worker’s compensation, no fault and liability settlements, but was largely ignored until CMS circulated the subsequent “Patel Memorandum” on July 23, 2001 which put the industry on notice that CMS would be demanding compliance with the MSP guidelines specifically for worker’s compensation claims and settlements.
(It’s important to note that in the Patel Memo no specific mentions were made of MSP compliance with no-fault and liability insurance claims. Up until now, many insurance carriers only insist on creating a MSA and involving a professional administrator for their larger claims to show they were in compliance with CMS’ statutes.)
The Patel Memorandum established the building blocks for today’s Medicare Set Asides which are the projections used to determine the adequate amount to settle future medical for on worker’s compensation claims. The Patel memo says that if the injured party is already on Medicare or will be applying for social security disability insurance (SSDI) and thereby becoming Medicare-eligible within 30 months, “Medicare’s interests” should be considered as part of the settlement. A Medicare Set Aside (MSA)MSA projection seeks to satisfy this requirement; it is a report created by a nurse or vendor that specializes in MSA reports. Medicare Set Asides are useful for establishing the value of future medical expenses that CMS would otherwise pay, however, they often do not cover all of the expected expenses the injured party may have because some costs that would not be Medicare-eligible expenses are left out of the projection.
It is useful to involve a professional administrator to consult their pricing for both MSAs and these non-Medicare items. While a professional administrator cannot change the value reached for an MSA, their current pricing can show if the pricing in the MSA is close to reality. The professional administrator can provide a real look at what the future costs would be because the administrator is currently paying bills for existing injured individuals. In many cases, the professional administrators pricing will be far below the pricing in the MSA. This allows parties to discuss if the MSA seems fair and if they feel comfortable moving toward settlement. When it comes to the non-Medicare covered projections, some attorneys and carriers will insist on using the professional administrator’s pricing to settle that piece of the claim. Some professional administrators, like Ametros, provide these pricing analyses for MSAs and medical projections for free.