Ask Annie: Complex Settlements, Simplified

Question: We are settling a complicated claim involving a claimant’s lower back. Over the course of the claimant’s workers’ compensation claim they added a number of additional dates of injury (DOI) that involved no additional treatment, but each of these has its own claim number and we are hoping to resolve the entire matter in one global settlement.  We were planning to submit a Medicare Set-Aside (MSA) to Medicare for review and approval, but don’t know where to begin.  Can you help us?

Answer: This question highlights a tricky situation: workers’ compensation settlements with Medicare beneficiaries who have multiple dates of injury. While the DOI at issue here is primarily the low back, the claimant may have several “report-only” or “med-only” prior related or unrelated injuries the parties wish to resolve at the same time they resolve the low back claim. This is very common. Or the claimant may have multiple subsequent injuries with the same employer or a new one to the low back as a result of continuing to work following the date of injury originally at issue. Or the claimant may even consequential injuries, like depression or anxiety, which developed as a result of the low back injury.

Given the facts provided, we know the claimant is a Medicare recipient and the total settlement value will exceed Medicare’s applicable $25,000 workload review threshold since they plan to submit an MSA to Medicare for review and approval. Since the low back is the main focus, the parties definitely need to gather the following:

• All pertinent claim and demographic information
• The First Report of Injury or some other document to show the nature of the main alleged injury, in this case the low back
• A payment history showing the medical and indemnity benefits paid on the claim for the most recent two years
• Medical records for the most recent two years
• Pharmacy records for the most recent two years

From there the parties will have the foundation to write the MSA to address the low back, which remains the primary focus. So, what then to do about the other dates of injury / other body parts and conditions?

 Low Back Injury with Prior Unrelated “Report-Only” or “Med-Only” Claims

After the parties have gathered all the information needed for the low back DOI at issue, then the parties should turn their attention to the other alleged injuries that occurred over the course of the claimant’s employment.

• Some minor injuries may have simply been reported to the employer as a precaution, i.e. a “report-only” claim. Examples include relatively minor cuts, abrasions, slips, trips, and falls where the employee did not seek medical care or lose time.

• Similarly, a “med-only” claim is also usually minor. The employee sought medical care but did not have lost time or had minimal lost time (not beyond the statutory waiting period) related to the minor injury. The injury then resolved without the need for future care. Examples may include cuts requiring stitches, a significant sprain / strain that resolved with a course of physical therapy, etc.

If we assume there exist both med-only and report-only dates of injury where the injuries resolved without the need for future care, then the parties have a couple different options available to them if they want to close them out as part of a global settlement:

1. Assuming there are separate claim numbers, FROIs, pay histories, and medical and pharmacy records for them, one can certainly include these DOI with the formal MSA report and allocate zero dollars for the resolved body parts and conditions. You will still have MSA dollars allocated for future care of the low back condition. Medicare’s review contractor will review the materials.

From experience, it is rare the parties have all the items necessary for the contractor as frequently there are no claim numbers generated for report-only injuries, and thus no pay history. Sometimes the claimant concluded treatment by removing his or her own stitches for a minor cut instead of returning to clinic to have the treater do it, so there is not a doctor’s note with the magical phrase Medicare likes to see: “injury resolved without the need for future care.”

If the parties submit a file that includes the current DOI and these old stale dates of injury without all necessary documentation, then the file will hit “Development” with Medicare. Development will add significant time to the review process and if the parties cannot clear the Development hurdle(s), they are left to abandon the submission process and risk the deal falling apart altogether or satisfying the Medicare Secondary Payer Statute without Medicare’s approval.

2. The parties could choose to leave these injuries off of the MSA report altogether pursuant to Section 4.2 of the WCMSA Reference Guide. Submitting the MSA without the information on those dates of injury will allow Medicare’s contractor to focus the review on future care for the low back, which is the pressing issue at hand. When leaving the other stale DOI off the MSA report, we recommend you incorporate them into your settlement documents with the appropriate supporting documentation that shows they resolved without the need for future care pursuant to Section 4.2 of the WCMSA Reference Guide. Examples of supporting documentation: a record from the treating physician indicating the injury resolved without the need for future care, a ruling on the merits indicated the same deposition testimony from the claimant indicating the same, etc.

Want to Know About Other Options or Considerations? Join Us on November 19^th for a Live Discussion

We will continue this conversation live on our national webinar this month. Tune in Thursday, November 19, 2020 at 2:00 p.m. Eastern Time when Marty Cassavoy and I take a deep dive into these global settlements involving Medicare beneficiaries. We will discuss what we covered above and what to do for cases involving subsequent injuries with the same employer or a new one, and about handling consequential injuries in your MSA allocations. Register here.

ECS’ MSA options allow parties to swiftly and economically resolve claims with options for submitting to Medicare for prior approval or using our vast clinical and compliance resources to implement an evidence-based approach. If you would like to know more about our MSA product line, please reach out at 866-270-2516 or info@ExamWorksCompliance.com.