By Johnny Meyer, Settlement Advisors Manager, Ametros
The workers’ compensation system has, for the most part, functioned successfully for more than 100 years. There are certainly controversies but the vast majority of injured workers get the medical treatment and the dollars they need to heal and return to productivity.
But there is another segment of injured workers with quite different stories to tell. These are the injured workers who have received benefits for some time and then settled their claims. What happens to these injured workers once they are out of the workers’ compensation system and on their own? Do they live out their lives stress-free with plenty of money for their medical and living needs, and if not, are there things the industry can do differently?
Sadly, most injured workers who have settled their claims find their money runs out long before they planned, and spend years struggling to make ends meet. But that situation can and is changing. Understanding the perils facing injured workers who settle their claims, as well as the options that are available to them can make a tremendous impact on their lives.
Settling a Claim
For the most part, both payers and injured workers would ideally like to have claims settled; for payers it means getting legacy claims off the books, while injured workers are free of a complex, frustrating system that may restrict their care, and if they settle, they have money for future
living and medical needs.
But the reality of post-settlement life is filled with financial and administrative minefields that could overwhelm even the savviest injured worker. Managing the money to ensure it lasts, finding appropriate medical providers, keeping payments for medical treatments and pharmaceuticals to fair and reasonable rates, and adhering to the many applicable rules, regulations and laws can be daunting.
Settlements are generally paid out in one of two ways, or a hybrid of the two:
- Lump sum payment, where the parties agree on a specific amount that is paid to the injured worker in full.
- Structured settlement, in which periodic payments are made over the person’s lifetime.
Given the choice, most people surveyed — including injured workers — say they would opt for a lump sum payment. They believe they are best able to manage their own money and feel this gives them guaranteed financial independence.
Research has proven that this assumption is wrong. Whether a payout from an injury case or a government-run lottery, a substantial percentage of people who elect single payments find their funds dwindle rapidly. Every year more and more lump sum recipients are disappointed in the amount they have left.
Running out of money is among the biggest concerns, but it is hardly the only obstacle facing post-settlement workers. Here are additional issues:
Paying for medical care. Once out of the workers’ compensation system, injured workers must pay for their medical providers, medications, surgeries and other procedures, as well as other medical necessities that may arise, such as durable medical equipment and home modifications. While many believe these injured workers can negotiate reasonable prices according to their state’s fee schedule, that is often not the case. Instead, they often overpay due to a lack of understanding about fee schedules, Current Procedural Terminology (CPT) codes, rates, modifiers, rules and other aspects of fee schedules that can be extremely complicated. The fact is, an average person that is not trained in the subject would be hard pressed to know where to even find their state’s fee schedule let alone interpret it.
Finding appropriate medical care. Depending on the state, the workers’ compensation system may allow the payer to direct injured workers to specific providers or let the injured worker decide. However, even in so-called self-directed states, injured workers are typically given some guidance as to the best providers to see. Post-settlement, the worker is on his own to decide whom to see. While that might be appealing at first, the person may end up with a physician who is not privy to his medical history, or the provider may be uninformed about billing issues specific to the injured worker.
Managing the money. Most people are not adept at managing large sums of money. Unless someone has a background in financial management, it is quite difficult to determine the best ways to make medical funds last. This often results in exhaustion of funds, and confusion around what happens next.
Medicare requirements. For those with Medicare Set Asides, complying with rules and regulations is perhaps the biggest headache for injured workers post-settlement. Detailed record keeping and reporting is required by the Centers for Medicare and Medicare Services (CMS), the federal agency responsible. There are restrictions from CMS about what the money in the MSA can be used for. Not every medication or procedure is covered by Medicare, and all expenses must be reported to Medicare. The six main requirements that go along with an MSA are:
- Deposit the fund into an interest-bearing account
- Use the fund only for treatments related to the injury
- Use the fund 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
A mistake with any of these requirements puts the injured worker at risk of losing future Medicare benefits. Meaning, CMS may not step in as the primary payor if the funds exhaust.
Advocacy. While injured workers may not like the workers’ compensation system, it provides a sense of security that disappears upon settlement. Once the case is settled, the case manager or adjuster does not have an obligation to support the injured worker. The person is truly on his own.
What Can be Done Differently
In recent years professional administrators have increasingly been brought in to help injured workers who settle their claims. These organizations are paid only if and when a claim settles. The injured worker generally pays little or there is no cost to them.
Professional administrators fill many of the support gaps created after an injured worker is no longer in the workers’ compensation system. The role of the professional administrator is to advocate for the injured worker. That means helping manage the funds, finding appropriate medical providers, helping to schedule appointments, and taking responsibility for Medicare compliance.
Some of these organizations utilize technology in ways that allow the injured worker to consult with a medical provider 24/7. These companies are comprised of experts who understand the workers’ compensation system and guide the person through the complex maze of issues.
Employers and payers that truly care about their injured workers are finding professional administrators provide peace of mind to their injured workers and themselves. Rather than an ‘out of sight out of mind’ attitude, many are using this simple but invaluable tool to ensure their workers are taken care of after settling their claims.
About Johnny Meyer
Johnny is the Settlement Advisors Manager with Ametros, working to provide all parties with an innovative solution to settlement. He places a high focus on business development while concentrating on care and compassion for injured parties.
He brings over a decade of experience working in business development, marketing, and customer service and obtained his B.A in Sports Management with a minor in Business Management from Salem State University. He’s passionate about volunteering with the Make-A-Wish Foundation & animal shelters, traveling, cooking, and sports.
Ametros is the industry leader in post-settlement medical administration. Founded in 2010, Ametros is changing the way individuals navigate healthcare by providing them with post-settlement medical management tools for their settlement funds. Ametros offers its members integrated medical administration tools and reporting, seamless and automated payment technology, and access to significant healthcare discounts for pharmaceuticals, provider visits, and medical equipment.
Ametros has become a trusted partner for thousands of members receiving funds from workers’ compensation and liability settlements. Ametros also provides solutions for all parties in the settlement process, including plaintiff attorneys, insurance carriers, employers, third party administrators, and structured settlement brokers. With its core products, CareGuard and Amethyst, Ametros enables its members to approach settlement and lifelong financial and medical management with confidence and security. Ametros’ services are frequently useful for settlement recipients needing help administering a Medicare Set-Aside, but can be used to help administer any allocation of self-pay medical funds.