Disability Cost Projection
Settlement demands and final settlements hinge on medical costs: past, present, and future. This is not always easy to figure out. Medicaid Liens have to be repaid.
Other settlement considerations include Annuities, special needs trust funds, rated age, Medicare Conditional payments have to be repaid. The Client typically has out-of-pocket expenses that need to be reimbursed. Private health insurance carriers post liens against settlements early in the game. And now the Federal Government says future costs covered by Medicare have to be reasonably considered, and set aside in a special account, as well. Beginning in 2006, prescription medications are also included, which has greatly complicated this process. Has anyone tried to figure out the “donut hole” yet?
As a Medical Case Developer for Worker’s Compensation cases, I am often involved in the money aspects of a case. I first determine if the client is eligible for Medicare considerations. Has he/she applied for Social Security benefits? Is he/she already receiving SSDI/Medicare benefits due to disability or age? Is the settlement over $250,000? Actually these questions should be asked at the beginning, in the middle, and at the end of each and every case you have. There should be no surprises when settlement day comes.
Then I prepare a Disability Cost Projection, which can be described as a mini-life care plan. This calculation considers only the current treatment, including physician visits, diagnostics typical for injury diagnoses, medications, and probable surgeries coming up. Yearly costs are multiplied over the normal life expectancy. The total cost can be quite surprising. Even if the client is only on a couple of prescription medications, they add up significantly. For an exercise in this, find www.drugstore.com and type in Celebrex, which is a common medication prescribed for orthopedic injuries. Taken 4 times a day, the cost quickly adds up to over $500 per month, which is $6000 yearly, and $180,000 over a 30 year life expectancy.
Next, we look at the Medicare Set Aside Allocation prepared by Defense. Most often, the Allocation is based on old medical information resulting in allocations that are too high for current needs. I have learned that most Allocators will prepare one adjustment allocation free of charge if current medicals are supplied to them. In order to ensure that my client has to “set aside” the minimal amount of money, I will meet with the current treating physicians and get statements from each accurately describing current treatment and medications. Very often, the allocation can be minimized or eliminated entirely when prepared correctly.
