Like the slow camera pan down a dark hallway toward an opening door in a horror film, we don’t yet know what lies in store for us all if CMS makes liability MSAs (or “LMSA”) a reality. But…it’s probably not going to be good…or easy…or even clear.
While LMSAs have been mostly a sketchy possibility for the last decade, we thought it might be good to review 3 rules that may be critical to “survival” if CMS brings them to life with a vengeance. Just like any other horror flick, we think there are predictable survival techniques as important analogies to 1) “always turn around…it’s definitely behind you”, 2) “he’s actually still alive”, and 3) “always keep your pants on”.
Watching the plotlines from the opening scene, these 3 rules should get you safely to the final credits:
1) Full Legal & Medical Analysis Will Be Critical to Cost Containment & Success.
While workers’ compensation MSAs (or “WCMSA”s) have become more formulaic over time, the likely multitude of variables for LMSAs will require more advocacy than ever before. Nuances will abound. Policy limits, statutory caps, contributory and comparative negligence rules, coverage issues, nuisance value, and allocation of the settlement funds—and more—will be up for debate. LMSAs may threaten to exacerbate an already adversarial settlement process. The silver lining is that an increase in calculation variables also creates an increase in opportunities for advocacy. Well-reasoned creativity will be at a premium and difficult for CMS to contest. (i.e. 2011’s Stalcup Memo for Region VI) LMSA practice could operate more like corporate tax law combined with nurse case advocacy. In fact, the federal judges have often leaned on expert testimony informed by caselaw to resolve the issues on the record in court. See generally Chronovo Big Foot II Article
With that in mind, it’s critical to choose an LMSA partner that is an experienced, creative, and resilient advocate—both legal and clinical—on the scariest of MSAs. Here are some qualifications that will likely be critical with your LMSA provider:
- Are they struggling with the capacity to turnaround simpler WCMSAs in less than a week? If so, how will they do with the greater complexity inherent in LMSAs?
- Do they identify, mitigate and eliminate unnecessary or unrelated prescription drugs, surgical charges, and medical benefits already with your WCMSAs?
- Do they have the critical multi-disciplinary expertise of attorneys who can leverage jurisdictional case law, insurance policies, and individual claim dynamics?
- Do they have certified life care planners, PharmD, and medical experts that can navigate the complexities of larger, multi-dimensional medical challenges?
- Can they provide someone a state or federal judge would recognize as an expert at trial—and effectively handle cross-examination—over these questions?
2) Conditional Payment Lien & Section 111 Enforcement Will Likely Increase in Importance.
If the WCMSA process is any indication, the walk down the LMSA hallway will be a long, cluttered, and complicated one. Advocacy on submissions will likely raise reasonable arguments and interpretations that will require updates to rules and policies over a number of years. On the other hand, conditional payments will beckon with relative simplicity in comparison to LMSAs. Here too, countering a blunderbuss approach to liens often requires medical and legal precision. As our practice reveals, advocacy such critical to savings and compliance in Conditional Payment Liens. Our multidisciplinary, programmatic advocacy for conditional payments has reduced erroneous liens and unnecessary costs by 75% while satisfying the Treasury Department.
Furthermore, Section 111 will likely be more important than ever to connect settlement amounts to allocations—especially given the increased volume and cost liability claims are likely to present. While it remains surprising that CMS doesn’t do more already, Medicare can easily track and monitor non-compliant settlements with Section 111 data and the Common Working. The addition of LMSAs will provide yet another reason to leverage its data or a Trust Fund that is defaulting.
3) Structures Will Continue to Enhance Savings While Delivering Compliance.
Over the years, the workers’ compensation industry has attempted to lower WCMSA costs by combatting the single most significant driver (22% of the total settlement cost according to NCCI), CMS’ robust calculation of prescription drug costs. While evidence-based pricing has met with mixed success and questionable legitimacy, structures can easily reduce the cost of an MSA while still providing every penny of the benefits outlined in the MSA.
Assuming the CMS rules stay consistent with WCMSA policies, structures can deliver those savings for the claims organization while providing an opportunity for a replenishing MSA that ensures that the plaintiff never runs out of money for allocated medical expenses. In fact, structures can include reversionary riders that can refund the claims organization for any unused portion of an MSA at the death of the plaintiff
- Provide an average of 38% savings on submitted and approved MSAs for carriers ans self-insureds without any evidence-based MSA hassles or worries. (Structure Savings to Replace Evidence-Based Savings on MSAs)
- Create a time-released, replenishing MSA that should never run out before the full time of the MSA allocation so that medical benefits meant for a lifetime last for the plaintiff. 10 Advantages to Structured Settlement for Plaintiff’s and Their Counsel
- Secure ongoing funds for the plaintiff for MSAs and anything else with at least 10 advantages over market risk and volatility. 10 Structure Advantages Over Market Volatility
- Create reversionary refunds and interests to mitigate costs likely critical to the largest LMSAs. Using Structures to Create Reversionary Refunds for MSAs
- Provide secure, tax-free, growth features for the plaintiff to ensure the LMSAs is both outpaces inflation (like COLA and ILAPA products) without any downside risk. Is ILAPA The Goldilocks “Just Right” of Structured Settlements.
While Chronovo and ExamWorks Compliance Services cannot predict what’s behind the creaking LMSA door down the hall, we are uniquely poised and prepared to make sure you prevail over whatever linger behind it. If you have any questions or want more details, you can reach out to us at any time. For MSA specifics, you can reach, Marty Cassavoy, the co-author of this article, firstname.lastname@example.org or (781)517-8085. For details on structured settlement savings, value and strategies, you can reach Mike Hernandez at (909) 767-8318 or email@example.com or generally at firstname.lastname@example.org