Tag Archives: plaintiff attorney

8 Questions on Medicare Set Aside

1. “What is my risk if my client makes mistakes with his Medicare Set Aside (MSA)?”

2. “What’s the chance that Medicare denies my client’s care because the client misused or misreported 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 a client in the settlement process can be a challenge for many plaintiff attorneys. The questions above are common among 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 who 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 malpractice. This article, in consultation with a number of the nation’s prominent plaintiff attorneys, addresses the less clear 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?”

As Ametros assists attorneys and their clients all the time with Medicare and MSA issues, these questions are posed to us frequently. We see denials of treatment from CMS after settlement daily. The Medicare administrative contractors in charge of approving all Medicare claims have systems in place to automatically deny injury-related treatments for individuals who 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 responsibility for payment.

While very few of the MSA accounts managed by Ametros exhaust, when that occurs, Ametros automatically notifies 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 it begins 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.

See also: Medicare Set Asides: 10 Mistakes to Avoid  

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; it’s a clear sign that, if anything, Medicare is paying closer attention to all settlements.

Here are the 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 and 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. See Ametros’ reference area to review and be able to easily 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 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, like Ametros, to help the client abide by the guidelines. By doing this, attorneys 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 an 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 will put them out of compliance with Medicare’s guidelines.

Private insurance plans, whether they be Medicare Advantage, Affordable Care Act plans or plans 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 injured parties believe they can rely on a private plan to cover their injury costs, they have more incentives 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 be in a very compromised position. At that point, clients 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-plus years after settlement.

See also: Get a Grip on Non-Medicare Costs  

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 MSA funds and can’t get coverage, there really is nothing left to assist them with their care. When the client has exhausted funds and cannot find private coverage, he will likely make two calls: The first is to his attorney, the second is to a malpractice attorney.

What Is My Responsibility?

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

For attorneys who 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 determining 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 MSAs, 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 the client can realistically handle what is being asked of him for the rest of his life. Or as Medicare puts it: Will the client 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 medical care, remain compliant and have a resource to rely on so that he is not continually reaching out to the attorney after settlement.

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 set up professional 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 clients’ rights; there is no need to add to those challenges by risking any potential issues with Medicare.

Things Not Mentioned in ProPublica

By now, most of you have read the series of articles published by ProPublica on “The Demolition of the Workers’ Comp.” These well-written articles touched on some very important issues faced by our industry. For example, caps to the wage-replacement benefits provided under workers’ compensation can devastate employees earning higher wages. In addition, there is wide variation in the total-loss-of-use benefits provided under the various state systems. Legislators around the nation and people in the workers’ compensation industry would do well to carefully consider some of the issues raised by ProPublica.

As someone who has been in the workers’ compensation industry for more than 25 years, I also found there were several shortcomings in the ProPublica stories. For example, ProPublica failed to touch on what is often the biggest reason behind an injured workers’ poor recovery, and that is the secondary-gain motivation of unscrupulous medical providers and attorneys. I remember years ago, when I first started handling claims, Texas had the worst workers’ compensation system in the nation. Plaintiff attorneys would refer injured workers to physicians who had been sued so many times that they had lost privileges at every hospital in the state. But that didn’t discourage these physicians, who had set up operating rooms in their offices and continued ruining the lives of so many injured workers. Many of the injured workers who were treated by these physicians were left in ruin both physically and financially. But this harm to injured workers was not being done by insurance companies or employers or the state systems. This harm to injured workers was being done by the attorneys those injured workers trusted and the doctors who worked with those attorneys. These attorneys and doctors were not motivated by what was best for the injured worker. They simply wanted a payday.

Today, Texas has one of the best workers’ compensation systems in the nation. What changed? The legislators and regulators realized that they had to stop those who put their self-interests ahead of injured workers. Legislators instituted treatment guidelines, mandatory second opinions, attorney fee caps and approved physician panels. Over time, those doctors who put their financial interests ahead of the health of injured workers were removed from the system. Texas is a remarkable success story that illustrates how the workers’ compensation system can be improved to provide better outcomes for both injured workers and employers.

ProPublica also noted that insurance premium rates are at a 25-year low. While this may be true, it is an extremely misleading statistic. Over time, there have been significant advances in loss prevention and safety. Workplaces are safer than they were 25 years ago. Lower “rates” reflect both safer workplaces and more competition among carriers. However, lower “rates” do NOT mean employers are paying lower premiums than they were 25 years ago. I would challenge you to find any employer that is paying lower premiums than 25 years ago. For most employers, premiums have increased steadily over time, and they continue to increase. Rate is but a single element in the calculation of premiums, so looking at rate alone as a performance measurement does not provide an accurate reflection of the true picture. Also, based on National Council on Compensation Insurance (NCCI) data, claims costs have risen pretty steadily over the last 20 years, as well. So, premiums and claim costs are significantly higher than 25 years ago. Those data elements are a better reflection on the actual state of the workers’ compensation industry than rate.

Many choose to use the ProPublica articles as an indictment on the entire workers’ compensation system. While I agree the system is far from perfect, the system functions quite well most of the time. The vast majority of injured workers receive medical treatment and return to work in their pre-injury job without any conflict or complications. Those workers do not retain attorneys, suffer financial hardship or have significant lasting physical effects from their work injury. For these workers, the system does exactly what it is intended to do.

There will always be examples of injured workers for whom the workers’ compensation system produced an undesired result. It is impossible to design a perfect system. However, for every example that can be provided where the system didn’t work, I can provide you examples where it worked very well. In the workers’ compensation industry, we are in the business of helping people recover from injury and resume their place as a productive member of our society. For the most part, this is something the industry does very well.

My company deals with catastrophic injuries and other high-dollar claims. Our caseloads are literally the “worst of the worst” in the workers’ compensation industry. We see horrible, life-changing, devastating injuries every day. Yet, in spite of this, I can provide countless examples of how the efforts of our staff, the employers we insure and the claims adjusters and service providers we work with went above and beyond what was required under the workers’ compensation statutes. For example:

  • A paraplegic worker lived with his family in a dilapidated mobile home that was insufficient for his wheelchair. We were obligated to provide him with comparable housing, which would have been a new mobile home. Instead, we purchased a house that was large enough for him and his family, complete with all the necessary modifications needed to make the home handicap-accessible.
  • A paraplegic worker used to enjoy hunting with his family. We purchased an all-terrain wheelchair in addition to his regular wheelchair so he could continue to enjoy this activity with his family.
  • We recently purchased experimental motorized leg braces for a paraplegic worker. Because of these braces, he is able to walk again.
  • I have seen numerous injured workers whom we have assisted in recovering from an addiction to opioid pain medications. When these injured workers are free of this addiction, their quality of life and their relationship with their families is significantly improved. We have had both injured workers and their family members thank us for helping them overcome this addiction.

I’m sure every workers’ compensation carrier or third-party administrator has similar examples they could share. My point is, for everything wrong that people can identify about the workers’ compensation system, there are also a lot of good things about it. There are also many good people in this industry who work very hard to assist injured workers in their recovery. At the end of the day, claims adjusting is about helping people. Perhaps we, as an industry, need to do a better job sharing the positive stories of what we do every day to make the lives of injured workers better.

Do You Know Who Your Best Doctors Are?

In workers’ compensation, the medical provider network philosophy has been in place for years. Most networks were developed using the logic that all doctors are essentially the same. Rather than evaluate performance, the focus was on obtaining discounts on bills, thereby saving money.

Physician selection by adjusters and others has frequently been based on subjective criteria. Those include familiarity, repetition, proximity and sometimes just assumption or habit. Often the criteria is something as flimsy as, “We always use this doctor,” or “The staff returns my calls.” The question is, which doctors really are best, and why?

The first assumption that must be debunked is that discounts save money. Doctors are smart—no argument there. So to make up the lost revenue for discounted bills, they increase the number of visits or services to the injured worker or extend the duration of claims by prolonging treatment. To uncover these behaviors, examine the data.

Amazingly, even doctors do not always make the best choices about other doctors. They may recommend doctors they know socially, professionally or by informal reputation, but they may not know how the doctors actually practice. They may not know a physician upcodes bills, dispenses medications or over-prescribes Schedule II drugs. The data will reveal that information.

Doctors may be unaware they are adding to claim complexity by referring to certain specialists. Again, familiarity and habit are often the drivers. On the other hand, duplicity among providers is fraudulent behavior, and it can be uncovered by examining the data.

Analysis of data can expose clustering of poorly performing, abusive or fraudulent providers referring to one another. The analysis may also divulge patterns of some providers associated with certain plaintiff attorneys.

Treating doctors influence claims and their outcomes in other ways. Management indicators unique to workers’ compensation such as return to work, indemnity costs and disability ratings can be analyzed in the data to spotlight both good and poor medical performance. These outcome indicators are either directed by or influenced by the physician, and they can be uncovered through data analysis.

Claims adjusters and other non-medical persons simply cannot evaluate the clinical capability of medical providers, especially doctors. Performance analysis must take place at a higher level. Evaluations for specific ICD-9 diagnoses and clinical procedures such as surgery must be made. Frequency, timing and outcome can be examined in the data in context with diagnoses and procedural codes, thereby disclosing the excellence or incompetency of physicians.

Negative clinical outcomes that can be analyzed include hospital readmissions, repeated surgery or infection. Physicians associated with negative medical outcomes should be avoided.

When analyzing clinical indicators for performance, care should be taken to compare only similar conditions and procedures. Without such discrimination, the results are dubious. Specificity is critical.

When using data analysis to find the best doctors and other medical providers, fairness is also important. Provider performance should be compared only with similar specialty providers for similar diagnoses and procedures. Results will not be accurate or reliable if performance analysis is not apples-to-apples.

Medical providers may question data analysis to evaluate performance, claiming they treat the more difficult cases. The data can be analyzed to determine diagnostic severity, as well. Diagnostic codes in claims can be measured and scored, thereby disclosing medical severity.

Now is the time to step up to a much more dignified and sophisticated approach to selecting medical providers. Decisions about treating physicians must be based on fact, not assumption or habit. Fortunately, the data can be analyzed to locate the best-in-class and expose the others.

An Old Trick That Reduces Workers' Comp Claim Costs

Let me assure you from the outset that this article has nothing to do with losing belly fat, curing diabetes with cinnamon or buying real estate with no money down. And, unlike other enticing articles that make you wade through 30 minutes before they tell you about that “one trick,” I’ll get right to it. The trick is: communicate with injured workers.

This is something that most workers' comp professionals have known for a long time: Generally speaking, injured workers don't call the TV plaintiff attorneys because they want more money — they call plaintiff attorneys to file a claim because the employer/carrier has not communicated about benefits claimants can expect to receive or how the workers' compensation process works.

I know this to be true because of what plaintiff attorneys tell me. When I have my first conversation with opposing counsel on a new claim, she will often say something along the following lines: “Brad, if your employer/carrier had just explained to my client what was going on, the claimant wouldn't have hired me to file a claim.”

Once the plaintiff attorney tells the claimant about his workers' compensation rights, the claimant then believes that he has “secret” information, and that creates a lack of trust toward the employer.

Listen, you can buy a kidney and find the schematics for a nuclear reactor online these days — and employers think that claimants can't find out about their workers' comp rights? I have one word for you: Google.

So, why do many employers and carriers insist on giving claimants the “mushroom treatment” (kept in the dark and covered with….fertilizer)?  I can think of three reasons.

First, many employers wrongly believe that communicating with the claimant about the workers' comp process will encourage more claimants to hire attorneys and file claims. While this may seem intuitively correct, it is empirically false. Claimants hire attorneys because of too little information, not too much.

Employers think: “If I have a safety meeting on what benefits injured workers receive when they file a comp claim, aren’t I just teaching them how to get more money out of the process?” Legitimate concern. But once an employer understands that the motive to hire an attorney and file a claim is more often driven by uncertainty rather than greed, this concern tends to diminish.

Second, workers' comp professionals (HR directors, safety directors, adjusters, defense attorneys, nurse case managers, etc.) know the process inside and out. We know all of the acronyms, the sequence of events and even a lot of great big medical terms that sound really cool at parties. (“Epicondylectomy” and “acromioclavicular” are two of my favorites.)

It is easy to forget that a claimant experiencing his first work-related injury has NO IDEA about how doctors are chosen, how TTD benefits are calculated or what MMI even means. Because we often fail to discuss comp rights and benefits with claimants without using the legalese and comp terminology that we throw around on a daily basis, the claimant becomes more confused than a dad reading a bicycle assembly guide translated from Chinese. 

Third, I’ve been told by plaintiff attorneys that many claimants are treated from the outset as if their claim is fraudulent. Don’t misunderstand me: I’ve seen my fair share of fraudulent claims – – most workers' comp professionals have. But not every claim is fraudulent. The challenge is spotting the fraudulent claims that are hidden within the legitimate claims. If employers or carriers treat every claimant as a fraud even before there is evidence of fraud, we’re giving free advertising to plaintiff attorneys. 

I say: Bypass the cloak-and-dagger approach, tell the employees up-front about what to expect and watch the volume of litigated claims go down. 

Now, if I could only find that “one trick” to regrow hair!