6 Key Questions to Ask Yourself to Feel Confident Settling
In most states an injured worker can decide if they would like to settle the medical component of their workers compensation claim. Settling the future medical portion of the case is a big decision and sometimes it can be challenging to weigh the pros and cons of moving forward with a settlement or keeping the claim open.
Judge Howard Scheiner (RET.)
Former Judge of FL Compensation Claims | Founding Member of The Mediation Group
“Reaching a settlement for future medical requires that both the defense and plaintiff side show up to the negotiation prepared and with a realistic view of the future. One of the major stumbling blocks we see as mediators is that often the focus is on the overall settlement amount without spending adequate time determining how those monies will be used on medical needs over time. An honest assessment of the medical needs helps both sides feel confident they are setting up the injured worker for success.”
Every settlement is unique, however, there are certain factors that are important to consider in almost all cases if considering settling your future medical. Let’s look at some of the questions to ask yourself to determine if settlement is a good option or if further research may be needed.
1. What will be the costs of my future medical treatment?
Settle
You may feel more confident to settle if your answer is:
- “My future treatment regimen is predictable. I understand how often I will seek care and how much it will cost.”
- “I’m confident my treatment regimen will remain the same and do not expect new treatments will be introduced.”
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “I’m unsure of what I will need medically going forward or how much my treatment will cost.
- I’m still assessing various treatment options and might be changing doctors or medications.”
Takeaway
To get a good sense of your future medical costs, consider the following three variables:
- Consistency and frequency of your Treatment
- Type of Treatment
- Cost of the Treatment
Consistency
When your treatment schedule is predictable, it’s easier to understand exactly how the settlement will fund your ongoing needs. Knowing how frequently you will be taking medications or seeing the doctor allows you to more accurately budget your future expenses. Check to see if funding in the settlement proposal matches or exceeds your current and expected ongoing treatment schedule (for example, if you get physical therapy monthly, the settlement should provide funds sufficient to cover monthly visits).
Remember, if you seek more frequent treatment, then you will spend your funds more quickly; on the other hand, if you decrease the number of times you are getting treatment, you will save significant money that can be used later to pay for other treatment or may be left over.
Type
When you are consistently getting the same treatment it is easier to budget what items will cost. If a variety of treatment options are being explored, it’s important to know if the settlement will have funding to potentially cover the cost of the various treatments you are considering. Many cases can be settled with adequate funding for post-settlement treatments that the injured individual may not be sure they’ll receive – like a potential surgery or new medical device. It’s good to keep this in mind when approaching settlement conversations. If this future desired treatment is not factored in, remember you can no longer go to the insurer and ask that they cover it, so it’s helpful to consider all scenarios in advance of settlement. Sometimes new types of treatments are less expensive and may allow you to save money while other times the opposite is true.
Cost
It’s helpful to understand the costs of treatment options to see what will be affordable. Most likely, you have not seen the cost of the items that are in your settlement because the insurer has been paying for them. It’s helpful to have an idea of how much the main items in the settlement cost. Asking the insurer, the professional administrator, or researching online can help you get a grasp on what costs may be.
If your costs are in-line with the settlement offer and are believed to be stable, you’ll be able to gauge the impact of your medical expenses on your settlement funds over time. If costs appear to be higher than allotted for you or are rising due to medical inflation, it is worth considering how that will impact the amount of treatment you can get with limited funds. On the other hand, if your current treatments are less expensive than estimated in the settlement offer or you expect they may be lower in price in the future (for instance, a drug may be going from brand to generic or technology may be improving equipment you are using to make it less costly) those reductions may make the settlement offer more attractive.
Annemarie Pantazis
Partner | Wilder at Pantazis Law Group
“Protecting the health and well-being of my clients is always first and foremost. I sit down with them to understand how their treatment is going and what may be on the horizon. It’s important for both of us to know what the future may hold and how settlement funds can be used to their benefit. When there are significant future medical needs, I always advocate that a professional administrator be covered as part of the settlement to help them on an ongoing basis.”
2. How will I manage paying my medical bills?
Settle
You may feel more confident to settle if your answer is:
- “I’m confident I understand medical billing; I can track all bills and pay them timely as well as negotiate them down to the state workers compensation fee schedule
- A professional administrator will help me handle all bill payments”
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “I’m not sure I can keep up with the complexity of medical billing and making sure I pay everything properly and on time”
Takeaway
After settlement, you are responsible for paying all your medical bills related to the injury. This means you’ll need to confirm the bills are properly coded for the treatments you receive, make sure the pricing is accurate and ensure you pay on time. If you have a high attention to detail and the time to manage the process, you may be able to handle it. On the other hand, if you know you may struggle keeping up with your bills and are worried about overpaying and taking time to figure things out, then you may want to consider other options like professional administration.
Failing to take care of your medical bills can result in paying too much for procedures or providers deciding to no longer see you for treatment.
Fortunately, if you are not sure you can manage the burden, a professional administrator can assist with these activities and takes care of all bill tracking, payment and validation on your behalf.
Paul Sighinolfi
Senior Managing Director | Ametros
"Over the course of my career I settled hundreds of cases. Some were as easy as a walk in the park, while others required patience, perseverance and some thoughtful re-assurance. Settling a claim is a major life event for an injured worker, all parties should approach settlement with that in mind."
3. Who will support me with my medical decisions?
Settle
You may feel more confident to settle if your answer is:
- “I’d like to make decisions about my care on my own, with minimal input from others
- I will rely on a professional administrator to help me navigate my care
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “I don’t have a resource or I rely heavily on my current claims adjuster and/or nurse case manager to help me with my treatment plan and setup appointments.
Takeaway
The relationship each injured party has with their claims handling team can vary. Some are collaborative while others may be contentious. If you rely heavily on your claim’s adjuster, you will want to consider how you will make decisions as your care plan evolves after settlement. A professional administrator can offer support and resources to help you with these decisions after the case is closed.
In certain instances, if the relationship is contentious, settlement is an ideal way to take control of your care plan. Once your case is settled, you will not have to seek permission for treatment from the insurer.
4. How do I protect my Medicare benefits?
Settle
You may feel more confident to settle if your answer is:
- “My case does not involve the Medicare Secondary Payer statute.
- My case involves Medicare, but I understand my responsibilities to protect Medicare’s interests with my settlement funds for the rest of my life and will keep up with Medicare guidelines, reporting requirements and updates with the law.
- I’m confident my professional administrator will protect my Medicare benefits.”
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “Part of my case is to be used to protect Medicare’s interest, perhaps with the use of a Medicare Set Aside allocation. I do not understand how to properly spend this money, track it and report it to Medicare.
- I am concerned I may lose access to some of my Medicare benefits.”
Takeaway
Medicare covers 17.2 % of Americans[1], either through traditional Medicare plans or private Advantage plans. Most of us will end up on Medicare at some point; the typical reason is due to age. Americans over 65 years old can enroll in Medicare and most do. If you suffered a critical injury and are on Social Security Disability Insurance (SSDI) or are filling for SSDI, then you too may become entitled to Medicare.
Ensuring your Medicare benefits are intact is very important. If you feel confident you understand Medicare Set Aside obligations, and are informed on Medicare’s guidelines according to the WCMSA reference guide and WCMSA self-administration toolkit, you may be equipped to ensure proper self-administration. However, Medicare “highly recommends” the use of a professional administrator to help you with your Medicare Set Aside reporting. (link)
If you are concerned about making mistakes and potentially jeopardizing your benefits, contact a professional administrator who specializes in automatically taking care of all these requirements so your benefits are protected.
David Moskowitz
Attorney | David H. Moskowitz
“I tell my clients – ‘if you settle with an approved Medicare Set Aside, you are getting funds designated for your future care and you are no longer under the control of the carrier. It’s worth it, and, it’s the best of all worlds if you get the MSA professionally administered – for Medicare, for my client, and even for the insurer.”
5. Do I understand the risk of running out of money?
Settle
You may feel more confident to settle if your answer is:
- “I understand there is some risk of my funds exhausting and I think I can make accommodations to still receive the baseline of care I need
- I know what my backup plan is if my funds get low by accessing other insurance coverage or funds for out-of-pocket expenses, etc.”
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “I have no idea what I will do if I run out of money for my medical needs”
Takeaway
Settling your claim can allow for new freedoms in treatment and potentially funds to be left in the account for your benefit. On the other hand, settling your future medical comes with the risk that the settlement funds are a finite amount and could potentially run out.
The good news is there are some tools to consider to ensure your funds last. One option is using your settlement funds to purchase a structured settlement annuity. Instead of receiving all your settlement funds as once in a lump sum, you instead receive an annual payment via an annuity. This provides some protection, particularly if you have a Medicare Set Aside, in case you have a very costly year. In a costly year, your MSA funds would exhaust and, with proper reporting, Medicare would provide coverage for your extra costs. Then, you would still receive an annuity check and have your account replenished in the future.
Another popular concept is to use a professional administrator to help you save money on your medical expenses. A professional administrator can often save over 60% on doctor bills. This means if your doctor bills you $100 for a visit, the administrator may reduce the bill to $40 or less. That $60 you save remains in your account and you could fit in another $40 visit so that you get more treatment for your money and have less of a chance of running out of funds.
6. Who is the beneficiary of my account?
Settle
You may feel more confident to settle if your answer is:
- “I know exactly how the funds in my medical account will be distributed when I pass away”
Research Further Before Moving Forward
You may want to take more time to understand your medical plans if your answer is:
- “I have no idea what will happen with any leftover money.”
Takeaway
One of the potential benefits of settling is that there may be leftover funds in your account when you pass away that could be passed along to the beneficiary(ies) of your choosing. It’s important to understand where those funds will go and to keep in mind this is often a part of the settlement that may be negotiated.
Frequently, a provision in the settlement agreement controls the person or entity that will receive what remains of the medical settlement funds in your account when you pass away. It’s important to understand these provisions. The settlement agreement may say nothing about a beneficiary of the funds upon your death, in which case the leftover money in your account will pass to your estate or according to a beneficiary of your choosing. On the other hand, there may be specific language detailing how the funds will be disbursed by upon death. Some insurance carriers and employers request that leftover medical funds revert back to them.
If you choose to manage the medical funds on your own, your estate or family will have to determine the disbursements and who may have claims to the funds. On the other hand, a professional administrator can assist with this process regardless of who is selected to be the beneficiary(ies) on the account.
This list of questions and takeaways does not cover everything involved in settling a workers’ compensation future medical claim. Before settling your case, it is important to conduct research and speak with experts to fully understand all the options. This goes for both the injured person as well as the insurance carriers, employers and attorneys.
“When settling a serious injury case, I recommend negotiators turn to experts on medical costs, public benefits, professional administration, and other topics to make sure they understand all elements of the injured worker’s future medical care. The better informed everyone is, the more likely we are to reach a resolution,” notes former Judge Scheiner.
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Notes
[1] Barnett, Jessica C.; Berchick, Edward R.; Hood, Emily; Health Insurance Coverage in the United States: 2017; United States Census Bureau, September 12, 2018; https://www.census.gov/library/publications/2018/demo/p60-264.html
