Advocacy-based care has become important to many workers’ compensation stakeholders. Employers and payers that embrace the concept find not only is it in the best interest of their injured workers, but it also saves money through reduced litigation rates, expedited return-to-work, and happier, more productive workers.
But what about after an injured worker reaches a settlement and cannot return to work? What happens to them, and what can employers/payers do to ensure they are taken care of for the rest of their life? Those who have a professional administrator working with them have a vastly different experience from those who go it alone. This story outlines the lives of two injured workers and their experiences post-settlement.
In our hypothetical story are Bob and Sarah, truck drivers who sustained fairly serious injuries in motor vehicle accidents. Both are 62 years old, have been receiving benefits through the workers’ compensation system for two years, and have reached maximum medical improvement.
Both Bob and Sarah do not like being in the workers’ compensation system. Access to medical care is much slower than they would like, with some recommended procedures being outright denied. Neither particularly likes their physician, especially since the drive to get to the office is more than 45 miles each way.
Both would like to get out from under the control of the workers’ compensation system but are not sure how to go about it. They are also worried they won’t receive enough money in settlement to cover all their future medical care.
As it happens, the insurance companies for both reach out with offers of $200,000 to settle their claims. Both are encouraged, as it sounds like a substantial amount of money and in three years they will have Medicare to cover their medical treatment — or so they think.
As each is mulling what to do, Sarah’s attorney suggests she speak with a representative from a professional administrator. The representative contacts Sarah and she agrees to meet with her.
Both Bob and Sarah ultimately agree to the settlement offer and are extremely happy to regain control over their lives. But one year later, their stories have changed drastically.
The meeting Sarah and her husband Paul had with the professional administrator one year earlier was eye-opening.
They were shown different costs for the same treatment and medications with savings available through the professional administrator’s discounts. The representative explained that Sarah would be able to go to any physician and pharmacy she desired, and that, much like a general healthcare plan, she would pay less by going to those in-network.
The professional administrator also talked about the need for a Medicare Set-Aside, something Sarah had heard about in passing but did not understand. The representative explained that without an MSA, Sarah could be putting her eligibility for Medicare benefits at risk, depending on how the settlement money was spent. She explained the many stringent requirements necessary to stay in compliance.
Perhaps most importantly, the professional administrator explained that they would not be on their own. Much like the adjuster who worked with Sarah, there would be someone to help her every step of the way through the settlement and beyond. In fact, she would have easier access to the professional administrator’s support system than she ever had to the adjuster.
The couple opted for a structured settlement rather than a lump sum, after the professional administrator showed them how the money flow could be set up to their specifications and would grow because of the interest rate from the annuity in which it would be housed.
The settlement process went smoothly. The professional administrator and structured settlement broker had brought in various people to work with them to ensure the money would be enough to cover Sarah’s medical expenses, keep her in compliance with the Center for Medicare and Medicaid’s (CMS’) requirements, and have money for the couple’s future needs.
Like many people given the choice, Bob took the money in a lump sum and without the support of a professional administrator. One year later he found his money was dissipating more quickly than he had expected.
He was hit with sticker shock when he realized the costs involved in his medical treatment. Because he was paying retail, there were no discounts to be had on his prescriptions.
Part of Bob’s settlement involved a Medicare Set-Aside. His attorney explained this was necessary, as he was nearing the age of eligibility and Medicare needed to be the secondary payer to his workers’ compensation funds. Despite his confusion, Bob figured he could handle whatever requirements were involved.
Unfortunately, Bob did not quite follow CMS’ requirements to the letter. He did not put the money in a separate account and has used funds for treatments beyond those associated with the injury. Bob was unfamiliar with the medical fee schedule that he was required to use, and the ICD-10 codes. He also did not keep accurate records and receipts for the annual reporting CMS requires.
Bob is now receiving ominous letters from CMS. His attorney will not return his calls for help. Bob is on his own, running out of money quickly, and scared he won’t be entitled to Medicare benefits when he turns 65.
While these stories are hypothetical, they are very typical of what we hear day in and day out. In fact, increasingly many people who’ve opted to go it on their own later seek professional administration services to assist them post-settlement.
The recent CMS recommendation to utilize professional administrators to help injured workers who are settling their claims has gone a long way to increase the understanding of this service.
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