To illustrate this point, we decided to highlight a file we recently reviewed which resulted in the client saving $160,034. In this case, the employer/insurer planned to settle below the $25,000 CMS review threshold. The treating physician had provided written confirmation that the claimant, a Medicare beneficiary, would "not need future medical care related to [the] work injury or illness based on a reasonable degree of medical certainty." However, uncertain of how CMS would view the case, the employer/insurer referred the file to another vendor for advice.
Unfortunately, that vendor lacked experience and understanding of CMS guidelines. They didn't recognize that an MSA was completely unnecessary in the case! The client should have been told that CMS had clearly stated in a memorandum issued on April 22, 2003, which was incorporated into the WCMSA Reference Guide, that an MSA is not necessary when the following conditions are met:
• The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement);
• There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare’s detriment; and
• The individual’s treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.
Instead of advising the client that an MSA allocation was completely unnecessary, the vendor prepared and charged the client for a $160,034 MSA. The allocation included medications that were no longer prescribed, treatment for an unrelated condition, a surgery that the treating physician clearly noted was not recommended and treatment that was not even covered by Medicare. Relying on our advice and the WCMSA Reference Guide, the client was able to settle the claim as originally planned, well below the CMS review threshold.
We describe scenarios like this in terms of buying a car. If you go to a dealership and offer to purchase a car for $10,000 above sticker price, of course your offer will be accepted and you'll get a new car. You'll also have made the salesperson and dealership very happy! However, most of us use better judgment and don't conduct business like that. We try to save as much of our money as possible while getting a good quality, reliable vehicle. We firmly believe that our clients are much better served by our knowledge, experience and aggressive advocacy skills when it comes to Medicare Compliance issues. We help ensure that Medicare is protected while also conserving our client's resources as much as possible. Though we may lose money on individual cases when we advise clients not to pay us to prepare MSA allocations that aren't necessary, we prefer to build trusted relationships with them that last for years.
If you have an MSA allocation you feel is unnecessarily high or that has priced you out of settlement range, let us know. We would be happy to prepare a second-opinion review to see if we can save you money while ensuring that you are in complete compliance with Medicare Secondary Payer laws, regulations and guidelines.
