In Part I of this series, the benefits of professional administration were covered from the perspective of the claimant / injured Individual, their attorney and Medicare. In this installment, points of view will be addressed from payers and structured settlement entities / brokers.
Payers
Insurance carriers and self-insureds (payers) have significant responsibilities when resolving claims that include a component for post-settlement (future) medical expenses. There are a lot of factors for the payer to consider when settling these types of claims and professional administration can provide solutions to some of the most pressing issues.
Risk Mitigation
There is substantial risk to the payer when resolving a claim which includes future medicals. The inability for the payer to control how post-settlement medicals are spent and accounted for adds complexity and requires necessary considerations to be addressed relative to potential post-settlement risk and exposure. In the Medicare arena, when an MSA is incorporated in a settlement, the payer wants to ensure the funds are going to be appropriately expended on injury-related treatment covered by Medicare. In other realms of public benefits vis-à-vis settlements with future medicals, misspending of a medical fund may implicate important benefits for a claimant. Uncertainty around an individual’s potential mishandling of this fund could lead to possible exposure should the claimant look to the primary payer in the event that there are issues with administering their account. Professional administration adds a layer of certainty and protection for the primary payer by ensuring post-settlement medical funds will be spent appropriately.
Ensuring Funds Are Disbursed Properly
The parties to a settlement involving future medical expenses may decide how any remaining funds will be dispersed upon the death of a claimant. Also, since providers can submit bills up to 12 months after the date of service is furnished with respect to Medicare reimbursement, the MSA fund may need to be held open to ensure outstanding bills are paid. See Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements, v1.3, Sec. 10. A professional administrator will ensure that funds are held for an appropriate amount of time to account for any pending bills for treatment. They will also distribute any remaining proceeds pursuant to the settlement agreement and/or other applicable laws.
Structured Settlement Entity/Broker
A structured settlement involves the purchase of an annuity to fund a settlement and/or the component of a future medical fund. Structuring a post-settlement medical account provides the injured individual with a stable source of funding to meet their medical needs. In the case of an MSA, it can “be established as a structured arrangement, where payments are made to the account on a defined schedule to cover expenses projected for future years.” See WCMSA Reference Guide, v3.0, Sec. 5.2. The first two years of the annual amount are included along with the first surgery and related costs, then followed by annual deposits. Id. at Table 9-2, “Step 6.”
Professional administration and structured settlements complement each other. Some of the mutual benefits include:
- Preserving the integrity of the account
- Extending the life of the fund
- Lessening costs from a payer perspective versus funding via lump-sum
- Lessening injured individual’s out of pocket expenses
- Preserving needs-based benefits
Powerful Settlement Tool
Since a structured settlement broker and professional administrator’s goals are aligned, i.e. settling a claim and ensuring the maximum capability of the funds available to care for the injured individual, they often go together when resolving a claim. Typically, medical projections – whether they be MSAs or other types of medical cost allocations – are budgeted annually over an individual’s lifetime. Therefore, professional administration and structured settlements fit together integrally. In many instances, settling parties prefer them as a “package” when resolving their claim.
Ensuring Medicare Pays Primary if Temporary Depletion Occurs
One of the benefits of funding an MSA via structured annuity is that if in any given year the amount is temporarily exhausted, Medicare will pay for covered items or services related to the underlying injury. However, Medicare must be alerted of an exhaustion or depletion via the attestation process. See Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements, v1.3, Sec. 13, “Structured account attestation and expenditure letter: Temporary exhaustion.” Professional administration provides that the appropriate reporting of attestation relative to temporary exhaustion or depletion occurs to ensure that Medicare will provide reimbursement for medical expenses related to the injury until the annual re-funding of the MSA occurs.
Conclusion
Only certain stakeholders to a settlement were addressed in this series, but others can benefit from professional administration as well – including Third-Party Administrators (TPAs), Medicare Set Aside vendors, judges and mediators. Every stakeholder to a settlement involving a medical fund can reap the benefits of professional administration.
About Shawn Deane
Shawn is General Counsel and leads the legal team at Ametros. He has over a decade of experience practicing law and in Medicare Secondary Payer (MSP) compliance as an industry thought leader. He was previously Vice President of Medicare Compliance & Policy at ISO Claims Partners. Prior to that he practiced insurance defense litigation and healthcare law.
He has been heavily involved with the National Alliance of Medicare Set Aside Professionals (NAMSAP), having served as chair of the webinar and education committees, on the Board of Directors, and as President in 2017. He was also former executive committee member with the Medicare Advocacy Recovery Coalition (MARC). Shawn is faculty for the Certified Medicare Secondary Payer Professional Program (CMSP).
Shawn is a member of the Massachusetts Bar and is licensed in both state and federal courts in Massachusetts. His law degree is from the Massachusetts School of Law. He also holds a master’s in education from Cambridge College and undergraduate degree from Berklee College of Music. He resides north of Boston with his family and strives to live by the following: “Be Kind. Do Right. Serve Others. Work Hard. Have Fun.”
About Ametros
Ametros provides settlement solutions for the administration medical settlement funds. Over the past ten years, Ametros has built, from scratch, the nation’s largest technology-enabled administrator in the country. The innovation team at Ametros has had the honor of partnering with almost all the workers compensation industry’s largest payers, vendors and attorneys to find ways to new ideas to the claim settlement space.
Headquartered just north of Boston in Wilmington, Massachusetts, Ametros offers injured individuals patented medical administration tools and reporting, automated payment technology, and access to significant healthcare discounts for pharmaceuticals, provider visits, and medical equipment, in addition to live phone/email/chat support from its dedicated care advocates teams. Ametros’ core products, CareGuard and Amethyst, enable injured individuals to approach settlement with confidence and security. Ametros’ services are frequently useful for settlement recipients needing help administering a Medicare Set-Aside, but can be used to help administer any allocation of self-pay medical funds. Learn more at: ametros.com or by calling 877.275.7415.
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