One Powerful Way to Dissolve Claim-Settlement Resistance and Protect Injured Workers

Payers have a smart tool at their disposal to encourage settlement acceptance, reduce the risk of liability, and do the right thing by injured workers.
By: | December 13, 2018 • 6 min read

While employers and payers are eager to settle long-tail claims, they may find that some injured workers refuse to settle.

Advertisement




Some may resist a claim settlement offer out of fear that the money will run out too soon. Some may not understand how the offer has been calculated and assume it’s a lowball offer. Others may simply be uncomfortable with all of the unknowns of leaving the workers’ comp system.

Payers motivated to settle claims must have a thorough understanding of the fears an injured worker may have before settlement, and the challenges they may face afterward. Educating workers about what the transition will look like, and giving them the tools they need to protect their interests can help them feel more comfortable about accepting a settlement offer.

An increasing number of payers are opting to meet all of those needs by offering claimants the services of professional administrators (PAs), which offer a range of services to help injured workers achieve a smooth transition to a post-settlement life. Professional administration companies preserve and protect the settlement funds and prevent “dissipation risk.”

Melissa Wright, marketing manager, Ametros Financial

“Whether you’re a plaintiff attorney, defense attorney, adjuster, risk manager, employer, carrier, TPA, settlement broker … all parties should be working together to make sure that the worker is protected,” said Melissa Wright, marketing manager for Ametros Financial based in Burlington, Mass.

Many see it as simply doing the right thing — an extension of their duty to care for workers injured in the course of employment. But for many stakeholders, including payers and attorneys, it’s also a smart measure of risk reduction.

Not taking Medicare’s interest into consideration, as required by the Medicare Secondary Payer (MSP) Statute, could be a basis for a claimant’s potential claim against a payer or an attorney.

Also, the Centers for Medicare & Medicaid Services (CMS) has the right to audit the injured person’s settlement, and the MSP Statute gives strong recovery rights against the defendant (double damages incurred by Medicare plus interest).

It’s notable that CMS has begun scrutinizing misspent funds more closely than ever before, said Wright. “If the funds aren’t spent appropriately — especially for the attorney on the case or the carrier — CMS can come back and say, ‘You let this person go out into the world with no resources, a very limited amount of money, and now we have to step in to pay for the remainder of their treatment.’

“There is some obligation on everyone that’s involved in the settlement to make sure that the person has the resources available, especially in cases where CMS and Medicare eventually have to foot the bill,” Wright said. Earlier this year, Wright, together with Ametros’  settlement advisors manager, Johnny Meyer, led a webinar called Life After Settlement: What You May Not Know.

Risks of Self-Administration

For an injured worker, there are plenty of up sides to accepting a claim settlement. No longer bound by the workers’ comp system, they’ll have the freedom to choose their own doctors. They won’t have to worry about utilization review, independent medical exams, treatment denials, litigation or appeals. They won’t have limits on physician choice and won’t have to obtain approvals for treatment.

But there are potential down sides too. All of the responsibility that once fell to a team of experienced people then falls in the lap of the injured worker. The worker will have to coordinate their own medical care and treatment. There’s no one to call if they have questions, no attorney, no adjuster, no nurse case manager to offer advice.

“98 percent of cases decide to self administer. And don’t know what they’re getting themselves into.” — Melissa Wright, marketing manager, Ametros Financial

And then there are the bills. Discovering the retail prices for medication is often a shock to those who’ve been in the system for a while. Many have no idea what it actually costs for their prescriptions or physical therapy, or how much it might cost to replace a medical device like a spinal stimulator.

Trickiest by far are the cases that involve a Medicare set-aside (MSA). Workers who choose to self-administer their settlements will need to abide by strict rules established by CMS. If injured workers don’t dot every “i” and cross every “t,” Medicare can opt to suspend benefits.

CMS requires that parties with an MSA:

  • Deposit the funds into an interest-bearing account.
  • Use the funds only for treatments related to the injury.
  • Use the funds only for Medicare-covered expenses.
  • Pay according to the appropriate fee schedule.
  • Prepare and submit annual accounting report to CMS.
  • Maintain line item detail for the duration of eligibility.

That means tracking every single receipt and filling out complicated forms. It also means negotiating with providers to match the state fee schedule — around 55 percent below what doctors actually bill. Patients who don’t negotiate will likely pay full retail, draining the settlement fund too quickly.

Those outside of the system also aren’t likely to understand the quirks of Medicare-covered expenses. A shower bar, for instance, is a non-covered expense. But it will be covered if it’s coded as a “grab bar” instead.

“If you’re an injured worker and you’re trying to figure out what’s covered and what’s not, it’s not black and white,” said Wright. “There really is kind of a gray area, and trying to figure out what you can actually spend your money on is a pretty complicated process.”

Due to this complexity, CMS updated its Reference Guide for Workers’ Compensation Medicare Set-Aside Arrangements in July 2017 to say that “Although beneficiaries may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

And yet, around “98 percent of cases decide to self administer,” said Wright. “And don’t know what they’re getting themselves into.”

There are some resources available from CMS for those who choose to self-administer, including the WCMSA toolkit, which runs through the self-administration process all the way from setting up the bank account through the exhaustion of funds.

“It is definitely an intense read for the average person,” said Wright. “It’s very long and still there’s no one to call and ask questions if you’re confused.”

Advertisement




Professional administrators can provide guidance and also communicate with providers to ensure that workers are receiving maximum savings on treatments and medications in order to protect the viability of the settlement fund.

If funds are exhausted, the PA will be able to provide the necessary documentation that prove that it was spent properly, ensuring that Medicare will accept responsibility for further treatment.

Working with a PA, the injured worker “never has to touch a bill or worry about running out of funds or being prepared for any unexpected treatments or potential surgeries, which is a big concern that a lot of injured workers have,” said Wright.

Being able to pick up the phone and talk to someone and get answers is a significant piece of the settlement puzzle for injured workers.

“Obviously this is a complicated process and having someone they can reach out to you is really important to them,” she said. …  “[It gives them] the resources to make the most informed decisions, while focusing on getting better.” &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

Advertisement




That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

Advertisement




Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]