It is apparent that self administered allocations present a greater risk than initially thought.  As litigation emerges and Mandatory Insurer Reporting becomes effective, the Insurance Industry has recognized the exposure future medical settlements represent to all parties involved, including defense and plaintiff attorneys.

If the plaintiff improperly disburses MSA funds, Medicare may deny/suspend benefits. Suspension of benefits has and will expose plaintiff attorneys to a private cause of action, pursuant to the Medicare Secondary Payer Act.  Suits may also be filed against carriers under the Unfair Claims Practices Act.

As the current population ages and the number of Medicare beneficiaries under the age of 65 increases, the Medicare program finds itself supporting more beneficiaries with fewer contributors to the program.  By 2020, the Medicare program will disburse over one trillion dollars annually. It is believed that Medicare will make all efforts to ensure that the program remains (somewhat) solvent.  As a result, The Center for Medicare & Medicaid  Services (CMS) will scrutinize allocations and focus on their Medicare Secondary Payer (MSP) rights.

Payments From Set-Aside Fund Must Follow Stringent Guidelines As Outlined In Claims Settlement Agreement

If payments from a set-aside fund are not properly distributed as outlined in the settlement agreement (i.e. MSA report; fee schedule, ICD9 codes and CPT codes), the injured party may lose their Medicare benefits.  In addition, the injured party is left without the financial resources necessary to obtain medical treatment related to the accident. The injured party is placed in a position of having to replenish and refund the misappropriated claim settlement funds.

Carriers, TPAs and Self Insured’s subject to Mandatory Insurer Reporting will provide Medicare with the necessary information to determine who is the primary payer or if a right of recovery on individual claims exists.

Self administration by unqualified individuals is prevalent and increases the risks associated with claim settlements involving Medicare eligible individuals.  Carriers, TPA’s and Self-Insureds recognize the risk and are adopting protocols to combat their exposure by providing post settlement allocation services.  Administration Support services provide all parties to the settlement with the assurance that set-aside funds are disbursed properly and give recourse to the injured party once those funds have been exhausted.  Given the cost of defending against civil court actions, the benefits of providing or funding these services is a best practice for risk adverse insurance entities.

Life Care Plan Essential to Identify Lifetime Care and Cost After Catastrophic Injury

Understanding and planning for the life long care of individuals who have sustained catastrophic injury presents many unique challenges for a Life Care Planner. Because these injuries impact all aspects of life, the Life Care Plan must be able to address all the contingencies necessary to maximize functional independence and promote quality of life.

Life care planning is a relatively new sub-specialty which has seen tremendous growth over the past 30 years.  The Life Care Plan represents a dynamic document individualized accurate and current but which also evolves to deal with age related changes encountered throughout the life cycle.  Periodic plan reevaluation and updating is appropriate to ensure that it remains relevant.  Whenever possible this document is developed as a collaborative effort among the various involved parties and should reflect proactive goals which are preventative and rehabilitative in nature.  A well-written Life Care Plan serves as a guide for life long-term care.

Although many professionals offer life care planning services not all are certified by the International Commission on Health Care Certification ICHCC.  Board certification by examination is available once certain strict criteria are met and establishes that a baseline level of knowledge and competency has been achieved.  Effective planners typically have many years of experience within their core profession and possess the ability to apply their knowledge and develop multidimensional life care plans which are reasonable appropriate and fiscally responsible.

A Life Care Plan Has Many Applications

Today life care plans are utilized in multiple settings. In the insurance industry, the life care plan is used to establish an accurate picture of the long-term needs and costs associated with the onset of a particular disability.   Complicated case issues are clarified and recommendations are presented in a structured and organized format.  Armed with information proactive decisions can be made with regards to ongoing claims management and/or resolution.

In litigation, the life care plan has proved to be a valuable tool for both plaintiff and defense attorneys.  Costs associated with the delivery of lifetime care are often used to establish and quantify the medical damages related to the case.  In addition, the life care planner also brings a unique perspective to the process educating the parties and assisting as council prepares for settlement or trial.  As experts life care planners provide testimony which is based on factual foundation as well as consistent valid and reliable methodologies.  When scrutinized and put to test properly developed life care plan stands on its own merits and can make a difference in the overall settlement and/or resolution of a complicated case.

In-house Team of Pharmacists Is Essential for Proper Projection of Part-D Costs in WCMSA

Two recent CMS policy memoranda have had a significant impact on the way Part-D costs are calculated in a Workers’ Compensation Medicare Set Aside (WCMSA) . The April 3, 2009, Centers for Medicare Medicaid Services  (CMS) policy memo dealing with the independent review of prescription medications in conjunction with the May 14, 2010 CMS procedure memorandum  concerning the exclusion of those identified as “off-label,” pharmacists are playing a bigger role in the WCMSA process and their importance to any MSA vendor is invaluable.

Pharmacy costs will continue to represent a large portion of a total MSA. Due to their high skill set and command of pharmacotherapy, pharmacists can identify therapeutic duplications, potential drug-drug interactions and contraindications that may result in other costs or expenses if continued without intervention.

Pharmacists Key in Identifying Off-label or Excluded Medications in WCMSA Allocation

Furthermore, some studies have shown that 85% of all prescription drugs may be written off-label and most come with some sort of risk when taken for long-term. Pharmacists are best able and most knowledgeable to identify medications that are appropriate for a claimants’ care and those that may be off-label and therefore excluded from a WCMSA allocation. Pharmacists have command of both drug language and literature retrieval, thereby ensuring that the most up-to-date information concerning prescription medications is reported and properly excluded from the WCMSA.

Pharmacists are highly trained and skilled healthcare professionals well versed in pharmacotherapy, drug information, and appropriateness of prescription medications through many years of didactic coursework and specialized training. Today, the profession of pharmacy is more than a “count, pour, lick, stick” operation of years past. Pharmacists are now an integral part of a healthcare team along with both doctors and nurses as the scope of clinical pharmacy has evolved. Pharmacist-Physician collaboration in a WCMSA to determine an appropriate long-term plan may be one way to contain costs ensuring a practical and beneficial medication regimen is established.

Pharmacists are the true “drug experts” and should work harmoniously and in concert with other members of your organization when preparing and possibly defending a WCMSA.

Pharmaceutical Team Essential in Workers’ Compensation Medicare Set Aside Allocation

If there is anything we can take away from the recent CMS policy memoranda is that having an in-house team of pharmacists are essential to the proper projection of Part-D costs. As prescription drug use will only continue in Worker Compensation Medicare Set Aside Allocation, utilizing a pharmacist may be one way to help contain costs while ensuring appropriate medical care for long-term is achieved.

Medicare Set Aside Allocation Capped at $150,000 

The Georgia Subsequent Injury Trust Fund (SITF) recently instituted a new policy pertaining to the settlement of workers’ compensation claims in cases requiring Medicare Set-Aside (MSA) trusts.

The SITF has now placed a cap on MSA allocation funds as part of a workers’ compensation structured settlement. If the annuity quote, including seed money, exceeds $150,000.00, the SITF will not reimburse any amount over $150,000.00 for the MSA allocation.

In fact, the SITF settlement manager suggests that in some cases the employer/insurer consider contributing the balance above the $150,000.00 threshold if the case is one that, based upon risk analysis, should be settled.  Otherwise, the SITF recommends considering bifurcating settlements, and settling the indemnity portion of the claim while reassessing the medical component of the claim at a later time.

Employer/Insurer Funding Overage Contrary to SITF Risk Mitigation Objective

Clearly, the suggestions of the settlement manager that the employer/insurer consider funding any overage runs contrary to the entire concept of the SITF itself which is designed to mitigate risk and exposure based upon a pre-existing injury that was not completely the responsibility of the subsequent employer/carrier. In crafting settlement policy in the face of the increasing uncertainty surrounding Centers for Medicare and Medicaid Services (CMS) and MSA approval, the settlement manger appears to defeat the purpose of the fund itself.

Based upon the SITF policy and the increasing instances of counter higher demands by CMS across the industry, it is not surprising to see MSA policy being shaped that discourages settlement of medical benefits and workers’ compensation cases in general. Whether an intended consequence of Medicare policy or not, insurers now clearly recognize that the current MSA review and approval process is a significant obstacle to both the delivery of benefits to injured workers and the ability to properly identify risk and exposure in any case.

I believe that similar policies will be offered in the coming months. However, there are alternatives to the CMS / Workers’ Compensation Review Contractor (WCRC) review and approval process that can be utilized in order to ensure both Medicare Compliance and receipt of needed settlement funds to injured workers. Please contact Gould & Lamb client services for any questions regarding MSA settlement strategies and products designed to accomplish these goals.

Gould and Lamb Sponsors Florida Workers’ Compensation Conference

The 65th Annual Florida Workers’ Compensation Educational Conference and 22nd Annual Safety and Health Conference will take place at the Orlando World Center Marriott August 15-18, 2010. Gould and Lamb, in addition to sponsoring and exhibiting at the event, will participate in two panel discussions on Wednesday, August 18.

Kip Daniels, Executive Vice President of Strategic Services, will be a part of a panel discussion on Mandatory Insurer Reporting (MIR) beginning at 9:00 am, and I will be a part of a panel discussing Medicare Set Asides and liability claims at 2:30 pm.

Join Us for Florida’s 65th Annual Workers’ Compensation Educational Conference in Orlando

The Mandatory Insurer Reporting panel will explore the current and projected MIR landscape, the realities of Section 111 Reporting and the State Children’s Health Insurance Program (SCHIP) requirements. Topics will include which entities are required to report, what information must be reported, penalties for non compliance and incomplete reporting and the effect of MIR on workers’ compensation and tort litigants.

The Liability MSA panel will focus on taking Medicare’s interest into account in liability cases, the current state of liability practice, potential MSA thresholds, CMS guidance on liability cases and practice tips for litigants and carriers.

Mandatory Insurer Reporting Experts

Both panels are comprised of the current experts in the field of Mandatory Insurer Reporting and Medicare Secondary Payer Compliance and include Roy Franco of Safeway, Inc. and the Medicare Advocacy Recovery Coalition as well as executives and attorneys well versed in Medicare intricacies and policies. We look forward to sharing our views and insights with the attendees and are pleased to participate at this informative event.

Download Gould and Lamb’s Medicare Secondary Payer Compliance and Protocols User Guide

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