Medicare Set Asides… …the untold story SC WC Educational Conference March 1, 2010

2 Worker’s Compensation Medicare Secondary Payer (MSP) regulations have made settling Worker’s Compensation cases extremely complex, challenging, and confusing…..

Confusing for….. The client The doctor The carrier The defense attorney The plaintiff attorney The providers 3

Medical Treatment Payment for injury related medical treatment post-settlement may be different from payment prior to settlement. Hoke will explain more……..later 4

5 Overview: Work Comp No fault insurance program providing medical and wage loss benefits Provides 12 basic components of medical benefits

WC Medical Benefits Inpatient treatment Outpatient treatment Prescription drugs Claim’s administration Premium for inpatient treatment Premium for outpatient treatment Premium for prescription drugs Payment of co-pays and deductibles, medical Payment of co-pays and deductibles, drugs Payment of drugs not covered by Medicare Payment of medical care not covered by Medicare Transportation 6

7 1. Inpatient Treatment When transitioning into Medicare: Medicare Part A, requires a premium Deductibles for each occurrence Daily charge for extended stays Blood transfusion exclusion

8 2. Outpatient Treatment When transitioning into Medicare: Medicare Part B, requires a premium 80/20 co-pay on most services 50/50 co-pay on mental health Annual deductible Significant exclusions

9 Exclusions home attendant care home modifications modified vans and maintenance equipment maintenance transportation vision and dental services hearing testing and equipment care outside USA limited chiropractic treatment

10 3. Prescription Drugs When transitioning into Medicare: Medicare Part D, premium required Annual deductible, first $310 at 100% co-pay 25% co-pay between $310 and $2, % co-pay between $2,830 and $6,440 5% co-pay over $6,440 True Out Of Pocket expenses (TrOOP)

11 4. Claim’s Administration When transitioning into Medicare: Can be self administered or through a professional custodial administrator. CMS will require professional custodial administration for cases of brain injury or incompetence.

12 5. Premium for inpatient care Carrier responsible if WC Medicare Part A based on quarters worked typically free

13 6. Premium for outpatient care Carrier responsible if WC Medicare part B 2010 monthly cost is $ taken out of SSDI or SS check

14 7. Premium for prescriptions Carrier responsible if WC Medicare part D national average $32.00 (2010) purchased privately

15 8. Co-pays and deductibles Carrier responsible if WC Significant co-pays and deductibles if coverage under Medicare Supplemental policy (Medigap) cost varies by county purchased privately

16 9. Co-pays for prescriptions Carrier responsible if WC Injured worker responsible if in Medicare Insurance Program True Out of Pocket (TrOOP) expenses Donut hole

Non Covered Drugs Carrier responsible if WC Over the counter drugs not covered Certain prescription drugs not covered

Non Covered Medical Treatment Carrier responsible if WC Injured worker responsible if in Medicare Insurance Program Significant exclusions and out of pocket expenses

Medical Transportation Carrier responsible if WC Injured worker responsible if in Medicare Insurance Program

20 Summary of Components Inpatient treatment Outpatient treatment Prescription drugs Claim’s administration Premium for inpatient treatment Premium for outpatient treatment Premium for prescription drugs Payment of co-pays and deductibles, medical Payment of co-pays and deductibles, drugs Payment of drugs not covered by Medicare Payment of medical care not covered by Medicare Transportation

21 Worker’s Compensation All 12 components provided Future medical cost projection to show potential lifetime exposure Need apportionment for Medicare

22 Overview of the MSA Not a Life Care Plan or FMCP Apportionment tool Protects Medicare’s exposure Uses discounting factors CMS pre-settlement review thresholds Guide for post-settlement medical payments

23 MSA addresses: Inpatient treatment Outpatient treatment Prescription drugs

24 Overview of the NCA Not a Life Care Plan or FMCP Companion report to the MSA Protects Claimant’s exposure Reflects current treatment plan Uses chronological age life expectancy Offers due diligence discovery Not required, but…..

25 NCA addresses: Claim’s administration Premium for inpatient treatment Premium for outpatient treatment Premium for prescription drugs Payment of co-pays and deductibles, medical Payment of co-pays and deductibles, drugs Payment of drugs not covered by Medicare Payment of medical care not covered by Medicare Transportation

26 Or….. Inpatient treatment Outpatient treatment Prescription drugs Claim’s administration Premium for inpatient treatment Premium for outpatient treatment Premium for prescription drugs Payment of co-pays and deductibles, medical Payment of co-pays and deductibles, drugs Payment of drugs not covered by Medicare Payment of medical care not covered by Medicare Transportation

Questions Karen Shelton, RN, CNLCP, LNC ProjectWorks, Inc