charleston county bar february 14, 2014. medicare insurance worker’s compensation insurance ...
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A Practical Approach to MSP
Charleston County BarFebruary 14, 2014
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Medicare Insurance Worker’s Compensation Insurance Medicare Secondary Payer Regulations Cost Projections Affordable Care Act Preparing for Settlement Settlement Language Roadblocks to Successful Settlements Post Settlement Issues
Overview
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Registered Nurse Certified Nurse Life Care Planner Medicare Specialist Certified Consultant Legal Nurse Consultant Certified Disability Management Specialist Certified Case Manager Certified Insurance Rehabilitation Specialist
Who Am I?
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15 years clinical and community health
nursing 15 years medical case management nursing 15 years legal nurse consulting and life care
planning 5 years Medicare compliance
Experience
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Jenny Glasgow
Medical Case Manager ProjectWorks Shawn Davis
Paralegal Joye Law Firm
Team
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Ask/answer questions of me Ask/answer questions of each other Offer comments Bring your own experiences to this seminar A lot of information today
Your Class
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How many represent plaintiff clients How many represent carrier/defense How many work only cases in SC How many work cases outside SC
Who are you?
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Define and explain:
MSP LOR SMART COB CHIP MSPRC ANPRM R&R WCMSA LR LMSA CMS ACA HELP
Pop Quiz
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If can answer less than 5, need to stay for full
class If can answer 5-10, can use texting while in
class If can answer 10-13, will be called upon to
help teach If can answer all 14, provide contact
information
Scoring
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MEDICARE INSURANCE
Part 1
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Eligibility
Age Disability Certain medical conditions
Premiums Part A Part B Part D Medigap
Medicare Insurance
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Hospital, with per occurrence and daily co-
pays Skilled nursing facility, with co-pays after 20
days Home health, skilled services only Medical office visits, with 80/20 co-pays Physical & occupational therapy, with 80/20
co-pays Durable medical equipment, with 80/20 co-
pays Diagnostics, with 80/20 co-pays Counseling, with 65/35 co-pays
General Coverage
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Significant co-pays Significant deductibles Significant exclusions
Medications
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Medicare fee schedule Some physicians not accepting Medicare rates Billed rate, then adjustments on paid rate 80% of Medicare rate
Fee Schedule
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TNS unit and supplies Bathroom equipment Home attendant care Transportation Some wheelchair equipment Dental services Vision and hearing services and equipment Podiatry visits
Not covered
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Chart on Medicare coverage
Handout #1
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WORKERS COMPENSATIONINSURANCE
Part 2
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Payment of all inpatient treatment Payment of all outpatient treatment Payment of prescription drugs Payment of durable medical equipment
WC Insurance
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Payment of all required premiums
Employers buy insurance from WC carriers Employers are self insured State Accident Fund
WC
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No co-pays No deductibles No exclusions
WC
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Claim’s administration
Pays bills Schedules appointments Reports to CMS Negotiates rates Authorizes treatment Case management
WC
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Each state has its own WC fee schedule Differs from Medicare fee schedule Differs from group health insurance fee
schedule SC WC fee schedule updates about every 5
years Providers offer additional discounts to WC
carriers
WC
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Medical mileage reimbursement Transportation to/from medical appointments Pays for out of pocket expenses
WC
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Medicare covers whole body but has co-pays
and deductibles
Workers Compensation has no co-pays and deductibles but covers injury related parts only
Summary
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MEDICARE SECONDARY PAYER
Part 3
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MSP regulations, 1980
Medicare Secondary Payer SMART Act, January 2013
Strengthening Medicare and Repaying Taxpayers
ANPRM, October 2013 Advanced Notice of Proposed Rule Making
cms.gov
MSP
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Says Medicare is secondary to all other
insurances and medical funding, including settlements Group health insurance VA benefits Workers Compensation Auto liability insurance Any liability coverage Settlements
MSP
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…for past medical payments …for current treatment …for future medical care
Secondary
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Who is impacted
Class 1: already a Medicare beneficiary Class 2: going to be a Medicare beneficiary
within 30 months
MSP
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CMS will do a pre-settlement review:
Already a Medicare beneficiary and settlement $25,000 or more (Class 1)
Going to be a Medicare beneficiary within 30 months and settlement $250,000 or more (Class 2)
MSP
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Post-settlement review for all cases CMS very often wants more than MSA
allocation How to handle this Who is responsible for additional monies Settlement language
MSP
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Impacts Worker’s Compensation cases Impacts Liability cases
MSP
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Affects all parties
Insurance carriers Defense attorneys Plaintiff attorneys Claimants Physicians and providers
MSP
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4 questions to ask each and every client
Handout #2
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Consider each case as being impacted until
proven not to be Categorize each case as:
Not impacted Class 1 Class 2
Universal Precautions
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Add 4 questions to intake sheet Add 4 questions to settlement checklist Be mindful of age and hitting the 62.5 mark
Do
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Continuously update records with information
Insurance coverage Application to SSDI Application to SSI Medicaid eligibility Medicare eligibility Social Security Administration correspondence
Do
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Obtain copies of all insurance cards
Do
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Sign in-house medical authorization Sign CMS authorization
Do
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Look at internal file management systems Look at daily work flow Look at computer management programs
Do
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Look at contract language Do you need to add anything to clarify
Additional expenses for experts Reporting requirements Other case costs specific to MSP Outsourcing to experts
Do
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Start educating client from day 1 on
settlement impact of MSP
Do
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Plaintiff and defense work together to obtain
all necessary reporting information for CMS
Do
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Questions Comments Discussion
This was the easy stuff
Break
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Regulations require reasonable consideration
for future medical treatment Regulations require reasonable consideration
for future prescriptions Pay back of any/all conditional payments
made
More MSP
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Paralegal with Joye Law Firm Conditional payments her “specialty”
Contact:Joye Law Firm: 843.725.4279
Shawn Davis
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Set up claim with Medicare Coordination of
Benefits (COB) and provide a copy of letter to MSPRC. These are two different offices.
Include as attachments the signed Consent to Release and Proof of Representation forms (available on Medicare’s website).
Conditional Payments
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Be sure the R&R letter includes the correct
claim and/or policy number
Will also provide you with a Case ID Number
Rights and Responsibilities
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Case ID Number is the “key” to the claim All treatment-related claims are filed under
this Case ID Number All correspondence to Medicare should
reference this Case ID Number Contact Medicare if receive correspondence
with more than one Case ID Number to get all claims moved to the correct case
Make sure other cases are closed
Case ID Number
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Notify Medicare of all treatment-related claims
by provider, date of service, and total charge amount
Request specifically a “conditional lien amount” to avoid getting a final demand amount
Be sure to review all claims outlined in the conditional lien letter from Medicare to ensure related to injury
Send a Notice of Dispute to Medicare for any unrelated claims
Requesting Conditional Lien
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Send notice of settlement letter to Medicare
and request “final demand” Include injury summary, itemization of
treatment-related claims, and settlement information
This amount is the total paid to Medicare Be sure to request Release of Claim from
Medicare when payment is sent Interest will run if not paid within 60 days of
receipt of the letter
Requesting Final Demand
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Must have an account set up in order to
access Must have Case ID Number in order to pull
case information Upload Consent to Release and Proof of
Representation forms if not noted on the portal as having been received
Medicare Portal
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Allows access to check status of Conditional
Lien and/or Final Demand quicker instead of waiting on actual letter
Portal still “under construction” phase, so be sure to always check the letter sent by mail
Does not allow access to review claims paid
Access to Portal
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Letter of Representation Conditional Lien Notice of Dispute Notice of Settlement
Letters to Medicare
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send at the time of sign up or when notified
Medicare has an interest for treatment-related claims
Letter of Representation
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At end of treatment or within 3 months of date
of initial treatment Request updated conditional lien amount
every 3 months
Conditional Lien
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At the time listing of unrelated claims is
received
Notice of Dispute
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On the date of the settlement if certain will be
able to pay within the next 60 days Interest starts to accrue on day 61
Notice of Settlement
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Here are some, you might have others
FAQ
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Insurance carrier insists on putting Medicare
on check or issuing payment directly to Medicare
#1
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Medicare sends final demand amount after
receiving notice of settlement from insurance carrier
#2
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Medicare sends lien notice on third-party case
when treatment is approved by WC carrier
#3
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Medicare opens more than one case for a
specific date of injury
#4
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Notice of Representation to Medicare COB Rights and Responsibilities letter from
Medicare Request for Conditional Lien Amount Notice of Dispute of Claim Notice of Medpay coverage Notice of Settlement, Request for Final
Demand Payment of Medicare lien and Request for
Release
Handout #3: Packet
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Carrier
At time of claim if WC case At settlement if liability case Every 3 months until medicals closed out (WC)
Reporting to CMS
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Claimant
If WC: After settlement, if MSA set up, annual reporting
If liability: no reporting guidelines in place
Reporting to CMS
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Not all clients impacted by MSP are
represented How do carriers handle MSP with non-litigated
cases
Question
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Questions Comments Discussion
Session break
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COST PROJECTIONS
Part 4
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Is this a Work Comp case Is this a Liability Case Is this a third party case Is claimant impacted by MSP Do you have an MSA or requested one Are there discovery deadlines Is there a mediation date
My own questions
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Worker’s Compensation MSA Non Covered Allocation Disability Cost Projection Liability MSA Life Care Plan
Cost Projections
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An apportionment tool Not required Whole settlement subject to spend down if no
MSA Prepared prior to settlement Retrospective analysis
WC MSA
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Written to protect Medicare’s interest Not a cost projection or a life care plan Typically prepared at request of carrier Based on last 2 years of medical/pharmacy
records Payout history required Uses standard of care projection models No updated information from claimant or
physician
WC MSA
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CMS requires certain fields in the MSA:
Medical treatment Prescriptions If annuitized, seed money and annual payments WC fee schedule
WC MSA
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Rated age CDC life expectancy charts Off label drug review Pharmacy review AWP of drugs Limited standard of care scheduling
Discounting factors
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Separate, interest bearing account Annual reporting to CMS Early approved withdrawal Inappropriate withdrawals Seed money to establish account Annual payments Death benefits Using MSA prior to becoming a beneficiary
MSA Account
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MSA reporting paperwork
Handout #4
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Self Professional
Required if brain injury or incompetent Full administration Limited administration
Administration
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How do you educate your clients with MSA Who educates the docs on using the MSA Has anyone had feedback from clients using
an MSA
Questions
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Both defense and plaintiff usually agree to
MSA recommendations and amounts Knowing CMS will eventually review the MSA
(if not done prior to settlement), important to include language in settlement documents regarding WHO will be responsible for additional amounts to fund the MSA
Practice tips
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CMS guideline on MSA administration
Handout #5
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Medical Case Manager ProjectWorks Non-covered allocations Post settlement apportionments Cost Projections
Contact:843.813.7375
Jenny Glasgow
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Medicare says “thou shalt not shift the burden
to Medicare” MSA protects Medicare’s interests but only
addresses the treatment and costs of Medicare covered items
Non Covered Allocation
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In essence, then, when medicals are closed
out using a MSA, the carrier is shifting a portion of the burden to the claimant UNLESS the non-covered treatment and costs are also considered, along with all the other administrative costs typically paid for by WC insurance
Burden Shift
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New trend Negotiation tool Informed decision
Protects claimant Protects attorney
NCA
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Companion report to WC MSA Prepared before settlement, part of
negotiations Plaintiff requests report Written to protect claimant’s exposure Current medical/prescription information No discounting factors or reduced life
expectancy
NCA
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Administrative costs Cost of required premiums Cost of co-pays/deductibles for covered
prescriptions Cost of non-covered prescriptions Cost of non-covered medical treatment Cost of transportation
Costs not covered
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Self Administration Professional Administration
Administrative Costs
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Part A—required by CMS Part B—required by CMS Part D—optional, but no drug coverage
without it Medigap—optional, covers co-pays and
deductibles
Penalties if not purchased when first eligible Open enrollment period Qualifying event
Required Premiums
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Annual deductible 25% co-pay until reach donut hole, standard
level 50% co-pay while in donut hole 5% co-pay after donut, catastrophic level
If no Part D insurance, or drug plan, then claimant pays 100% of all drug costs
Prescription co-pays
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Benzodiazepines Barbiturates Weight loss Erectile dysfunction No over the counter preparations or drugs
NC Prescriptions
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Home attendant care Any bathroom equipment TNS unit Wheelchair accessible vans Home modifications
NC Medical treatment
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Multiply $18 by 8 by 365 by 25
Exercise
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$1,314,000.00
Answer
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Mileage reimbursement for medical
appointments
Transportation
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Comparison chart for MSA and NCA
Handout #6
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Some actual figures
Handout #7
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Typically prepared for WC cases only Based on standard of care or specific medical
recommendations Uses WC fee schedule Not reduced to present day value or factored
for inflation Informational tool only, not used as basis for
expert testimony
Disability Cost Projection
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Addresses:
Surgery Diagnostics Physician visits Therapy Equipment Injections Other
DCP
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Prepared after:
Interview with client Review of medical records Review of depositions Review of 14B Standard of care protocol Research costs
DCP
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Sample disability cost projection, MSA, and
non-covered allocation
Handout #8
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Comments Questions Discussion
Before we get to the really hard stuff
Break
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Warning: enter at your own risk Content may be harmful to your mental health Management not responsible for damages Expletives allowed
Liability MSA
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Liability MSA is truly a plaintiff problem and a plaintiff attorney responsibility
Personal commentary
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Not required Voluntary basis No review process in place Minimal guidelines from CMS An apportionment tool to avoid 100% spend
down Prepared post-settlement Documents claimant’s consideration of
Medicare’s interest
Liability MSA
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Settlements below $300 have no obligation Settlements between $300 and $5,000 can set
aside 25% to satisfy MSP/CMS If physician provides a letter stating no future
treatment needed, can project a zero allocation….but still need the document packet
CMS guidelines
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Carrier reports case at time of settlement Plaintiff responsibility to consider Medicare’s
interest for conditional payments and future medical treatment
Plaintiff determines need for apportionment tool, the voluntary MSA
Liability MSA
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Steps to take when considering MSA for
liability cases We are going to spend a lot of time on this
topic If need additional information, call me, or call
someone with knowledge and experience
Special Section
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If Medicare lien (conditional payment) exceeds
amount of settlement, negotiate with CMS for waiver or reduced repayment amount
Pay back the money…………………..or else
Conditional Payments
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Does the settlement include money for future
medical care? General or implicit language
Release to “any and all future claims” Specific or explicit language
A specific dollar value
Settlement Language
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If yes to either implicit or explicit language,
best course is to consider if MSA needed
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Is Medicare going to be primary payer at time
of settlement or shortly (30 months) thereafter Future medical care must be recommended Settlement monies must be available for
future medical care
Do you need MSA
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If not going to be a Medicare beneficiary at
time of settlement or shortly thereafter, document file showing how you arrived at this and retain documents forever
If “no”
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If no future treatment going to be needed, get
medical documentation, document file showing how you came to this conclusion and retain all correspondence and documents forever
If “no”
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Even if claimant will be eligible for Medicare at time of settlement or shortly thereafter, and even if there will be future medical care needed, there might not be enough money left over to set aside for anything……………….
Enough money?
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Start with settlement amount Subtract:
Attorneys fees Case costs Conditional payment lien Any other liens, such as Medicaid, VA, group
health Lost wages and lost earning capacity Pain and suffering
Calculating available funds
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Out of pocket expenses for future treatment
Home attendant care Transportation Home modifications Non-covered equipment Non-covered prescriptions OTC drugs Co-pays and deductibles Insurance premiums
Then subtract
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If net recovery is close to gross damages, then
use reasonableness standard to determine if MSA needed
If net recovery not close to gross damages, then can calculate percentage of monies available Need attorney to help you with this
Net recovery
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Need to calculate value of future medical
treatment Cost projection or life care plan Eliminate all non-covered treatment Use discounting factors allowed by CMS
Determine dollar amount of available money MSA should be the lower amount of the
amount of future treatment or the net recovery
If money available
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To have MSA prepared by someone who can
meet CMS guidelines, while minimizing the impact to the claimant
Prospective analysis, not retrospective work that is done for WC MSA
Be cost effective for the claimant Be consistent and reliable
Critical
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Setting up MSA account Administration of MSA monies Funding the MSA account Attestation language, letters, documents
Educate client
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Retain for your file forever:
Questionnaires on eligibility Medical records pertaining to future medical
care Questionnaires to physicians for zero allocation MSA determination packet Client attestation letters
Documentation
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Do you do all this yourself Do you outsource Where to get help
Outsourcing
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Sample questionnaire to physician
Handout #9
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CMS memo of 9-30-11 regarding exposure
claims
Handout #10
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Sample attestation language Sample letter to client
Handout #11
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Questions Comments Discussion
Session break
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Used in catastrophic liability cases Follows standard methodology Build a strong medical foundation Usual and customary fee schedule Collateral source rule Economic analysis Basis for deposition and trial testimony
Life Care Plan
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If costing surgical procedures, then use
disability cost projection
If this, then that
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If a WC case not impacted by MSP, then use
disability cost projection
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If a WC case impacted by MSP, then need MSA
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If a WCMSA prepared, then need non covered
allocation
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Liability case:
Pre-settlement: full life care plan for damages Post-settlement, if impacted by MSP:
Cost projection or life care plan broken down into covered vs. non-covered expenses
Voluntary MSA
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Compliance tips
Handout #13
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SMART act summary
Handout #14
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Questions Comments Discussion
By now, eyes are glazed, brains are numb
Session Break
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AFFORDABLE CARE ACT
Part 5
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As we go through the next set of slides, think
through each of the points and consider how each will impact/affect either a worker’s compensation case or a liability situation…..
…..and especially if have any bearing on settlements
Affordable Care Act
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Essential benefits Mandatory coverage No pre-existing exclusions No lifetime maximum Tiered level of co-pay Qualifying event Provides treatment for injury or disability Provides treatment for rehabilitation
Affordable Care Act
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All policies, through either the state exchange or through
federal program have to include: Ambulatory patient services Emergency services Hospitalization Laboratory services Maternity and newborn care Mental health services and addiction treatment Rehabilitation services and devices Pediatric services Prescription drugs Preventive wellness services and chronic disease treatment
Essential Benefits
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Can stay on parent’s policy until age 26 Can be on employer provided policy Can purchase own policy through state
program Can become eligible for Medicare either by
age or through SSDI program Can qualify for Medicaid
SC did not expand Medicaid eligibility criteria as some states did
Mandatory Coverage
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No pre-existing condition exclusion No lifetime maximums Has own network of providers Fee schedule for payment
ACA policy
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Can purchase varying levels of co-pay options
from 60/40 to 80/20 ACA says there is a 90/10 premium tier level
available, but not commonly available yet Maximum out-of-pocket amounts determined
to be $6350 for individuals Need to make sure policy has dual coverage
for medical and prescriptions, or there will be a dual out-of-pocket amount of $6350 for medical and another $6350 for prescriptions
Tiered level of co-pay
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Can purchase individual and family insurance
coverage through state exchanges during open period
Can purchase a policy if there is a qualifying event, but have a 60-90 day window
Can purchase a policy for short periods of time. An example being to fund coverage while waiting for Medicare eligibility.
Enrollment
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Loss of coverage due to injury Loss of coverage due to termination of
benefits Loss of coverage due to inability to work
Qualifying Event
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Prior to ACA, injury and other medical
conditions often were classified as pre-existing and excluded from insurance coverage
With ACA, injury/disability and all medical conditions are now fully covered without waiting periods, higher premiums, or excluded completely
Injury/Disability
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ACA covers rehabilitation treatment for
injuries, including hospitalization, medical treatment, medications, counseling, physical therapy, and equipment
Rehabilitation
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All folks All conditions Medical treatment Prescriptions
Coverage
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Need discussion on what is non-covered and
importance of being able to identify and calculate for this
Non-Covered
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Discussion
Impact on WC Cases
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Discussion
Impact on Liability Cases
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Questions Comments Discussion
Session Break
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PREPARING FOR SETTLEMENT
Part 6
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Determine Medicare and Medicaid liens Determine group health liens Determine public benefits protection Determine MSP impact future treatment
Preparing for Settlement
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Determine group health liens
Preparing for Settlement
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Determine public benefits funding and
protection
Preparing for Settlement
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Determine MSP future treatment impact
Preparing for Settlement
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Have cost projection Have MSA Have non-covered allocation Have life care plan
Preparing for Settlement
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Have annuity figures
Preparing for Settlement
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SETTLEMENT LANGUAGE
Part 7
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WC, not impacted by MSP WC, impacted by MSP Liability, not impacted by MSP Liability, impacted by MSP
Settlement Language
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Sample settlement language for WC case not
impacted by MSP Sample settlement language for WC impacted
by MSP
Handout #12
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Intake sheets Contracts Pre-settlement conferences Settlement discussions At disbursement Follow-up letters Attestation documents Packets of information
Client Education
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ROADBLOCKS TOSUCCESSFUL SETTLEMENTS
Part 8
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POST SETTLEMENT ISSUES
Part 9
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Final thoughts