A New Way to Settle Workers Comp Cases
I was talking to Karen Shelton a lifecare planner, the other day about a new way she had been dealing with permanent and total workers comp cases. The old model is max out the client as permanent and total and to leave the medical bills open. We would also recommend that the client not file for SSDI until his workers comp case had resolved, not wanitng it to interfere with the workers comp case.
If you do a future costs workup for most of the workers comp clients, the dollar value is so high, that the inusrance company and defense would never pay it. Instead of doing a future costs workup, Karen does Medicare Setaside Allocation, the costs of administering the MSAT, Medicare B costs, Gap insurance cost, supplemental insurance cost, Medicare D costs, plus other prescription or any other costs. This will typically be dramatically less than a future costs workup ($170,000 against $400,000 for a future costs workup).
Okay fine. What does that get the client? He already had his meds for any work related injury paid for by the workers comp insurance carrier. How does this benefit him?
- Client is Dealing with Medicare and Not Workers Comp Insurer – Meicare is almost universally accepted and medical providers are used to dealing with them. Some insurance companies are very difficult to work with. (If you’ve practiced in workers comp, you know this is an understatement).
- All Injuries or Illneses are Covered – In workers comp, the insurance company is only responsible for the injuries related to their workplace injury. Once the client is under Medicare, they will be covered for any illness or injury. So while, a person with a failed back surgery might get medical care and pain medications for his back, once they are under Medicare, they can go to a doctor for the flu, a sore throat or a broken arm years after their case is over.
- Client’s Medicare Expenses will be Covered – Nearly all permanent and total cases will qualify for SSDI. However, Medicare isn’t free. Medicare A is free, Medicare B isn’t. The new prescription plan for Medicare D costs money. There are office visit co-pays, there are prescription co-pays. There are other out of pocket expenses. Your client is going to have to pay these for the rest of thier health insurance, even if their meds are left open for their work related injury. By settling the case this way, all their out of pocket expenses will be covered.
Why would the defense or insurance company want to settle the case this way?
- It’s Cheaper – They save a few hundred thousand dollars over the life of the case.
- It Closes the Case – Insurance companies are all about allocating risks. By settling and closing the case, they are eliminating any potential catastrophic costs (future surgeries…).
What are the downsides or caveats? Well the person has to qualify for Social Security. If you settle the case this way and the client is not on Medicare and doesn’t qualify for Medicare, you are doing them a disservice.
Interesting stuff. I believe that Karen is the only one in the country doing this.
In work comp, the employee's behavior is altered by their expectations of future benefits. The worker should not be told "if you cannot return to work, then three years after the injury you get a settlement of X dollars".
People who truly cannot return to full time employment should never take a settlement. Those who can return to work should do so. The problem, of course, is the uncertainty inherent in measuring who can and who cannot truly work. Then too, there are the priorities of the insurance industry, which are based on business costs, not patient outcome.
I have searched for years for studies which deal with the fact that disability measurement is largely a fiction which must be accepted in order to make the system work partially at best. However, we continue to refuse to face the truth: patients, lawyers, doctors, insurance businesses and government agencies have priorities which make objective measurement of disability all but impossible.
