Workers' Compensation, MSP Compliance, and Some Strategy
If you are like most Workers’ Compensation Claimant attorneys, your desk and files are crammed with cases that are left open for medical….and the main reason they are left open is the fear on the part of the attorney that something down the road might come back to haunt them. But leaving the medical open forces the attorney into becoming a maintenance firm, continuing to handle medical problems for a client that no longer has any fees attached. With the advent of the dreaded MSP, we now have a way to safely transition the client from Workers’ Compensation Insurance into the Medicare Insurance Program (and closing out the case in total), all the while being mindful not to be “shifting the burden” to Medicare. But in doing so, we all have to be doubly mindful of not “shifting the burden” or creating exposure for our clients.
Whether you are settling an active case, or looking at ways to settle the medical open cases, using a consistent, compliant process will ensure you consider Medicare’s interest, protect your client from future exposure, and limit the potential liability you face as attorneys. First, some basics:
Medicare is interested in both past payments (conditional payments) and future treatment. They have a record of past payments, but use a specialized cost projection to predict the future treatment, in this case called a Medicare Set Aside Allocation (MSA).
The MSA is an apportionment tool designed to protect Medicare’s exposure. It is never required, but if not provided then CMS will take the position that the full settlement is for future medical treatment.
The MSA covers only those medical treatments and services that are covered by Medicare. There are significant “uncovered” medical services/treatments, including certain medications, which are prescribed by the authorized treating physicians that are not covered at all by Medicare.
A Non-Covered Allocation report is a specialized cost projection outlining the scope and future costs of those items typically not covered by Medicare, and not discussed or itemized in the MSA. As you can imagine, the carrier/defense folks are not offering this information. If you are settling the medical portion of your cases based on the MSA alone, you are opening yourself to some very serious, future problems.
So what to do? How to handle this safely for you and your client? As soon as you know you have a client that will be eligible for Medicare within 30 months (either by age, SSDI eligibility) or is already a Medicare recipient, start asking the carrier for an MSA. Then determine what future treatment will be necessary---ask the doctor, get a life care planner to prepare a simplified cost projection. When the MSA comes in, get a Non Covered Allocation report. This will take care of the future costs.
Don’t forget about the past payments, the conditional payments. CMS can levy very heavy fines for not reporting and repaying these liens.
Lest all you Personal Injury attorneys think you are off the hook, start reading about what is going to happen come July, 2009. My next blog post will cover some of the reporting requirements and compliance issues that will help the PI attorney safely guide the client through this maize.
ProjectWorks, Inc. is a medical legal support company offering causation and settlement services to attorneys. We specialize in the Non Covered Allocation reports, life care planning, and cost projections.Contact us for a free handout describing the 12 factors Workers’ Compensation coverage provides the injured worker, which 3 are addressed by the MSA, and the 9 addressed by the Non Covered Allocation. Although it will vary from client to client, the NCA has shown to bring anywhere from an additional $80,000 to $2 million+ in some settled cases.
www.projectworksinc.com
