Cost Projections, How Valuable are They?
Another guest post from Karen Shelton at The Steinberg Law Firm.
- First a Positive Story:
Not long ago, an attorney (we’ll call him Lawyer 1) called me to help him with a damages issue involving a personal injury case. He had already established causation but needed help to capture the policy limits that he thought were around $50,000. The medical records clearly indicated that the treating orthopedic surgeon was advising future cervical surgery for injuries received in an auto accident. I prepared a Cost Projection, based solely on the medical recommendation, kept the numbers as conservative as possible, and came up with a projected cost of a little over $200,000. This amount included costs for the surgery, a brief period of therapy, routine office visits, and lifelong anti-inflammatories. Lawyer 1 was delighted with his final settlement amount of almost $150,000.
- Now a Negative Story:
Another attorney (Lawyer 2) called and asked me to prepare a Cost Projection as part of a Medicare Allocation work up for an already settled case. Lawyer 2 was very proud of the fact he had settled the worker's compensation case for about $200,000. Medical records indicated his client was already on a pain pump, receiving lifelong medical treatment for chronic pain, and was anticipating at least one cervical revision surgery in the future. The ultra-conservative Cost Projection for these documented medical exposures came to over $750,000. The Medicare Set-Aside Allocation was estimated to be around $160,000, more than the total settlement minus fees.
In both cases, you would have to talk to the lawyers to learn how they used my information in the settlement process.
A Cost Projection is a tool used by Legal Nurse Consultants to assist in medical-legal case development.
- Cost Projections can be written for a specific procedure: Example: Cervical fusion is projected to cost around $40,000 but typically requires revision at least once in a lifetime, making the total cost estimate to be almost $100,000.
- Cost Projections can be written for a specific drug: Example: Lifelong supply of Celebrex for a 40 year old is estimated to be almost $45,000.
- Cost Projections can be written for any type of specific medical circumstance: piece of equipment, length of time, home health care, etc.
Most attorneys are very well prepared with the legal merits of a case prior to settlement discussions, whether it is a hearing, mediation,
trial, or other negotiations. With the burden of satisfying Medicaid Liens, Medicare Conditional Payments, Insurance Liens, Medicare
Set-Aside Allocations, and self-funded future medical costs, it has become imperative that lawyers know the cost of medical issues as well.
what are the chances that medicare will settle for less than the funds set aside if the patient expired with long term care diagnosis?
Ruth,
My first response is to check with your lawyer. My understanding of medicare set aside trusts is that the person has gotten a significant settlement/award that a large portion was for medical bills. If a person is paid in the settlement for the doctor's bills, then it is unfair for them to put that money in their pocket and have the government pay their medical bills through medicare.
So they calculate how much money should be set aside to cover the medical bills so that medicare won't have to pay them.
If their is money in the set aside trust and the person passes away prematurely, I would think that the money in the set aside trust would pass into the person's estate and not to medicare.
This is assuming that medicare had been paid up at settlement and that there weren't any outstanding bills.
I would talk to the attorney that handled the case. I'm sorry for your loss.
Keep up the great work on your blog. Best wishes WaltDe
