Tom Feher on TLV Podcast

In the 27th episode of Trial Lawyer View, viewers were treated to an engaging and thought-provoking conversation between host and Synergy CEO, Jason D. Lazarus, J.D., LL.M., CSSC, MSCC, and Tom Feher from Feher Law. The episode covered a range of topics related to the life of a trial lawyer and the responsibilities that come with representing clients in the legal system.

One of the key themes that emerged from the conversation was the importance of empathy in the life of a trial lawyer. Feher spoke passionately about how crucial it is for lawyers to be able to put themselves in their clients’ shoes and understand the challenges that they are facing. He emphasized that empathy is not just a moral imperative, but also a practical one, as it allows lawyers to better serve their clients and achieve better outcomes.

Another topic that was discussed in the episode was the role of organizations like the Los Angeles Trial Lawyers’ Charities (LATLC) in giving back to the community. Feher praised the work that LATLC does in providing support and assistance to those in need, and he spoke about the importance of lawyers being active in their communities and using their skills to make a positive impact.

Finally, the conversation turned to the responsibility that trial lawyers have to serve the people they represent. Feher spoke about the ethical obligations that lawyers have to their clients, and he emphasized that the practice of law is ultimately about serving others and making a difference in their lives.

Overall, the conversation between Lazarus and Feher was a powerful reminder of the importance of empathy, community involvement, and service in the legal profession. It highlighted the challenges and responsibilities that come with being a trial lawyer, and it provided valuable insights into the personal experiences of one of the profession’s leading practitioners. Viewers who missed the episode are encouraged to check it out and gain insights on the role of empathy, community service and responsibility in the legal profession.

Learn more here.

Is the PAID Act the Solution for Locating Hidden Medicare Advantage Liens?

April 14, 2022

Teresa Kenyon, Esq.

It is well established that Medicare has a right of reimbursement for payments it made on behalf of a Medicare beneficiary when that beneficiary obtains a settlement from a responsible party. Medicare’s right of recovery is found in the Medicare Secondary Payer Act (MSP).[1] Those payments are considered conditional because they are required to be paid back to Medicare once the other funds are received.

In general, under the MSP statute, Medicare does not pay for any services for which payment has been made or can be expected to be made by a primary plan.[2] A primary plan’s definition has expanded over time and now includes group health plans, workers’ compensation coverage, automobile or liability insurance coverage and no-fault insurance.[3] Medicare is the secondary payor and the primary plan is the primary payor. Medicare’s right to collect has expanded to include “any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment.”[4]

In 1997, Congress enacted Medicare Part C to provide an alternative to traditional Medicare. A Part C plan, also known as a Medicare Advantage plan, is another health plan option that a Medicare beneficiary may choose instead of traditional Medicare. These plans are offered by private insurance companies and approved by Medicare. They preempt state law.[5] These plans also assert a right of recovery, and it is generally accepted that their right is similar to traditional Medicare. Medicare Advantage Plans arguably have a private cause of action for double damages in the case of where a primary plan fails to reimburse.[6]

As case law has developed in various circuits, most have favored the Medicare Advantage plan. The Third Circuit case, In re Avandia Marketing Sales Practices and Products Liability Litigation, provided that Medicare Advantage plans do have a private right of action under the MSP.[7] Specifically, the court noted that the language of 42 U.S.C. §1395y(b)(3)(a) included the right to seek double damages for not reimbursing the conditional payments made under any part of the MSP Act and not just the payments made by traditional Medicare.[8] It is noteworthy that there has not been a court since Avandia to find that the Medicare Advantage plan does not have a private cause of action. The Ninth Circuit, in Parra v. PacifiCare of Ariz., Inc., found that the Medicare Advantage plan could not seek reimbursement, but it was a limited holding as the insurance carrier was seeking reimbursement from the beneficiaries of the deceased injured party.[9]

One of the biggest concerns surrounding these Medicare Advantage plans and their right of recovery is finding them! For a plaintiff attorney trying to do the right thing and resolve traditional Medicare’s interest, this is an easy task. Using the Medicare portal or sending a fax, confirmation can be obtained as to whether traditional Medicare has made conditional payments. But Medicare Advantage plans could ultimately have “liens” that are hidden in plain sight since Medicare doesn’t provide Medicare Advantage lien information to plaintiff counsel. For a plaintiff attorney, he must rely on his client to provide information about Medicare Advantage plans that she has had over the course of her related medical treatment. In a protracted case, there is a possibility that the plaintiff had many different health coverages. For example, a Medicare beneficiary could choose traditional Medicare for one year and switch to an Aetna Medicare Advantage Plan the next and back to traditional Medicare at some other date in the future. And then possibly even have a different Medicare Advantage carrier, like Humana, the next year.  This makes it extremely difficult for a plaintiff attorney to track down all of the liens and ensure that the universe of potential Medicare recovery rights are being addressed at the time settlement.

Until recently, there was not a centralized place to search whether a settling claimant had a Medicare Advantage plan. Both plaintiff and defense had no way to know which private insurance carrier may have provided Medicare Advantage coverage to a particular claimant. A plaintiff attorney or defense entity could check with traditional Medicare and confirm that Medicare does or does not have a Conditional Payment claim, but the same has not been true for private Medicare Advantage plans. With the possibility of these plans having the same rights as traditional Medicare and the further risk of double damages, this has created a very uneven playing field.

MSP industry stakeholders pushed for the changes created with the Provide Accurate Information Directly (PAID) Act as a means of helping them obtain data for Medicare Part C and D plans. The PAID Act was initiated by the responsible parties because lawsuits were being filed by Medicare Advantage Plans asserting recovery rights. These suits included claims for double damages under Medicare’s private cause of action provision.[10] This was found to be unfair due to the insurer’s (and equally plaintiff counsel’s) inability to proactively identify claimants who are Medicare Advantage or Part D enrollees. 

The PAID Act, which became effective December 11, 2021, should help even the playing field at least partially.  It will help Non-Group Health Plan (NGHP) Responsible Reporting Entities (RRE) better coordinate benefits by providing beneficiary Part C and Part D enrollment information via updates to the Section 111 Query Response File. CMS will provide up to 3 years of enrollment data for both Part C and Part D plans. The data will be provided to the RREs as part of the NGHP Query Response File. The information that will be available will now provide RREs the contract number, contract name, plan number, coordination of benefits (COB) address, entitlement dates for the last three years of Part C (Medicare Advantage) and Part D coverage, and the most recent Part A and Part B entitlement dates.

The intention of the PAID Act was not to help plaintiff attorneys and Medicare beneficiaries but rather to help the RREs.  It is presumed that this will allow the RREs to make active outreach to address Part C and Part D plans’ recovery rights, thereby ensuring they are not subject to any double damages. In turn, plaintiff attorneys should be able to obtain this information and know that they are protected as well. So, although not specifically meant to benefit plaintiff attorneys, the fact that RREs now has access to this information should allow an information share between the plaintiff attorney and the RRE so that the plaintiff attorney can have knowledge of the existence of these hidden liens.  That will require some proactive collaboration with the other side over Medicare Secondary Payer issues.  We do recommend being collaborative with the other side when it comes to Medicare compliance related issues since all parties have skin in the game. 

[1] 42 U.S.C. § 1395y.

[2] 42 U.S.C. § 1395y(b)(2)(A).

[3] 42 U.S.C § 1395y(b)(2)(A)(ii).

[4] 42 CFR § 411.24(g).

[5] 42 U.S.C § 1395w-26(b)(3).

[6] 42 U.S.C. § 1395y(b)(3)(A).

[7] 685 F.3d 353 (3rd Cir. 2012).

[8] Id.at 360.

[9] 715 F.3d 1146 (9th Cir. 2013).

[10] “There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).” 42 U.S.C. § 1395y(b)(3)(A).

Resolution of Part C Medicare Advantage (MAO) Liens White Paper

April 7, 2022

Jason D. Lazarus, J.D., LL.M., CSSC, MSCC

Some clients, post-accident, may have switched from Medicare Parts A/B over to a Part
C Medicare Advantage Plan. Therefore, even if you have gone through the resolution process
for your client and gotten the Medicare conditional payment related issues dealt with, you might
not be finished. What lurks out there is that a Part C Advantage Plan (hereinafter MAO) may
have paid for some or all of your client’s care. You may wonder how that is possible when you
were told that the client was a Medicare beneficiary and Part A/B was paid back for conditional
payments.

For more information, read this excerpt from my book ‘The Art of Settlement‘.

[hubspot type=form portal=7609853 id=bf334652-71cb-47f0-9e39-e1e880f11a54]

Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide

March 24, 2022

Rasa Fumagalli JD, MSCC, CMSP-F

The Centers for Medicare and Medicaid Services (CMS) issued Version 3.6 of the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Guide”) on March 15, 2022. It softened the language used in the controversial Section 4.3 of the January 10, 2022 Guide (Version 3.5). This Section addressed CMS’ view of non-submitted Medicare Set-Aside (MSA) proposals and initially provided the following:

As a matter of policy and practice CMS will deny payment for medical services related to the WC injuries or illnesses requiring attestation of appropriate exhaustion equal to the total settlement less procurement costsbefore CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.

In an apparent response to the concerns raised by the Medicare Secondary Payer (MSP) compliance industry, CMS issued a revision of this paragraph in Version 3.6 of the Guide. The current section now provides the following:

As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount. (emphasis added)

A note was added to this section as well. It states:

Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period.

CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.

Although this revised provision clarifies that Medicare will resume a primary payer status when the parties show that the initial funding of the non-submitted WCMSA was sufficient, and it was properly exhausted, the exact process for proving the sufficiency of the non-submitted WCMSA proposal has not yet been defined. It is also clear that despite the policy effective date of January 11, 2022, CMS will use notice of the non-submitted MSAs to flag the Common Working Files (CWF) to potentially avoid payments up to the total settlement, less procurement costs and paid conditional payments. This flagging of the CWF may result in the development of a process whereby CMS is reviewing the appropriateness of the non-submitted WCMSA. Documentation that supports the reasonableness of the non-submitted WCMSA should be maintained in the event that is questioned by CMS. The note also clarifies that this policy is not intended to affect settlements that do not meet CMS’ internal workload review thresholds as long as Medicare’s interests have been considered in the settlement. It is rather ironic that the non-submitted MSAs that were shared with CMS in order to avoid improper payments may face greater scrutiny than the non-submitted MSAs that were never shared with CMS.

Other revisions in Version 3.6 pertained to Section 9.4.1.1 that discusses the most frequent reasons for development letters and Section 10.2 that discusses e-signatures on Consent to Release documents. The revision to Section 16.1 is significant in that it limits parties to one re-review request per particular error claim. Synergy will continue to keep you advised of MSP compliance changes as they arise.

Conal Doyle on TLV Podcast

In the 26th episode of Trial Lawyer view, host and Synergy CEO, Jason D. Lazarus, J.D., LL.M., CSSC, MSCC, had an enlightening conversation with Conal Doyle from Doyle Law Firm. The episode focused on Doyle’s personal experience as a right leg amputee and how that experience has informed his practice of representing those who have suffered traumatic amputations.

Doyle spoke candidly about the challenges that he faced after losing his leg and how those experiences have given him a unique perspective on the needs of amputees. He discussed how his personal experiences have informed his legal practice and how he has been able to use his expertise to help others who are going through similar experiences.

One of the most interesting parts of the conversation was when Doyle discussed his groundbreaking cases that helped prevent insurance practices related to denying prosthetics. He talked about how he was able to use his legal knowledge and expertise to make a real difference in the lives of people who had been denied the care that they needed. This was a powerful reminder of the positive impact that trial lawyers can have on society.

Throughout the conversation, Doyle and Lazarus emphasized the importance of trial lawyers making a positive impact by changing somebody’s life or making a systemic impact with each case they are involved in. They discussed the ethical obligations that lawyers have to their clients and to society as a whole, and they highlighted the importance of using legal expertise to effect positive change.

Overall, the conversation between Doyle and Lazarus was a powerful reminder of the impact that personal experience and expertise can have on legal practice. It highlighted the challenges faced by amputees and the role that trial lawyers can play in advocating for their needs. Viewers who missed the episode are encouraged to check it out and learn more about the importance of using legal expertise to effect positive change.

Learn more here.

New Innovative Products and Enhancements Brought to the Structured Settlements

March 16, 2022

Anthony F. Prieto, Jr., CFP® & Samantha Webster

Since 1983, structured settlements have become a frequently employed solution to protect personal injury settlements for the benefit of injury victims and their families. Over time as structures became more prevalent, the plaintiff bar realized that for a structured settlement to have maximum benefit for the injury victim, it was necessary to have experts involved in the planning process for their clients. A settlement planning professional that works directly with the plaintiff can make sure that a plan is developed to meet the needs of the injury victim. 

Structured settlements allow a personal injury victim to utilize an annuity to receive part or all of their recovery over time, instead of as a lump sum.  There are many benefits of utilizing a structured settlement, including:

  • Tax-free gains/interest
  • Creditor/judgment protection
  • Highly customizable payment plans
  • Fixed and guaranteed future payments
  • Cost of living adjustments (increasing payments)

Structured settlements also have some downsides, including:

  • The payments are locked in and cannot be changed.
  • The interest rate (rate of return) is locked and does not change.
  • A court order is required to change or alter certain terms.

Over the first 30 years of the use of structured settlements, there was little to no change in the types of structured settlement annuities offered to an injury victim, and there were very few product enhancements or changes brought to market. In recent years, however, there have been some new innovative products and enhancements brought to the market.  The remainder of this blog post will summarize a few of those offerings.

Index-Linked Annuity Payment Adjustment Rider

The first change was implemented by Pacific Life in 2014. Pacific Life created a index rider to a traditional structured settlement. The Index-Linked Annuity Payment Adjustment Rider, or ILAPA, is used to create a market-based cost of living adjustment (COLA) each year. Prior to this rider, a COLA was chosen at that the inception of the contract and did not change. A client could select to have a set increase on their payment. The percentage change was locked in and fixed over the duration of the periodic payments stream. For example, the injury victim could choose a 3% COLA. Each year on the anniversary date, the payment would increase by the specified percentage, compounded each term. The percentage would be locked and the future payments would be known. ILAPA offers another option for the increase. If the client chooses this option, the annual COLA is determined by the performance of an index. With Pacific Life, the index is the S&P 500. Each year the payment increases by the COLA or may stay level based on the performance of the index. By tying the increase to the performance of the index, it allows the injury victim to have a higher payment increase if the market returns allow for it. In a given year, the increase in the payment can range from 0% and is capped at a high of 5%. This rider gives the injury victim more upside in years when the index performs well and can potentially match inflation in a more unified way. There is no downside. In years when the index is negative, the payment would just remain constant. Using the ILAPA rider is one way to limit the interest rate risk.

iStructure

In 2022, Independent Life introduced a new product called iStructure. iStructure Annuity™ is the first uncapped, index-linked structured settlement annuity and is designed to provide the opportunity for growth in payout amounts with the same flexibility and tax benefits of traditional structured settlements. iStructure is linked to the Franklin BofA World Index™, powered by the quantitative insights of Franklin Templeton and Bank of America, with the objective of capturing long-term growth. This is accomplished, in part, by the index systematically allocating to companies around the world with the potential for high profitability. iStructure can be used for a variety of situations including personal injury cases, structured attorney fees, structured installment sales and taxable settlements. The benefits for clients include tax-free and tax-efficient income, the potential for increasing income, customizable payment options, market-downside protection, and protection against inflation.

Estate Tax Liability and Trust Shortfall Medicaid Payback Commutation Options

Commutation of payments is an option provided by most life insurance companies. Commutation provides payment of any remaining guaranteed payments under the annuity policy in a one-time lump sum upon death. Before 2021, the standard commutation option was to pay a single lump sum calculated using a discounted present value of the remaining guaranteed payments. In 2021, Berkshire Hathaway introduced options on commuting payments that do not require commuting all payments or selling them upon death to help create liquidity for probate. Traditionally, commutation was an all or nothing selection done at the time of policy issue. Berkshire’s new options for commutation do not require all remaining guaranteed payments to be commuted, but only enough to satisfy an estate tax liability or a Medicaid payback requirement. This change will have a large impact for structured settlements that pay into a special needs trust or pooled special needs trust. A client can decide at the onset to only commute the amount needed to cover estate taxes or the Medicaid lien. This allows the secondary beneficiary to potentially receive more payments in the future.

Conclusion

Considering the long history of structured settlements in the market, all of the product evolution has come about in a very short time. It is our hope that other companies will continue to introduce innovative options for settlements to implement for the benefit of injury victims we serve. New products and services could create more competition and ultimately provide better options and rates to help families. With more innovative solutions, families can choose what is right for their personal wants and needs when settling their personal injury case.

An Examination of the Role of Structured Settlements in Funding Medicare Set-Asides

March 14, 2022

Rasa Fumagalli JD, MSCC, CMSP-F & Samantha Webster

Many Medicare Set-Aside (MSA) arrangements today are funded with structured settlements.  There are some very good reasons for doing so, which are discussed below.  However, it is critical to understand the different ways a set aside can be funded so your client can make the best decision possible of how to fund it if a structured settlement will be utilized.  According to CMS, an MSA may be funded by either a lump sum payment or by a structured settlement. Although a lump sum MSA may be simpler to administer, there are several benefits to funding an MSA with a structured settlement annuity. One primary benefit is cost savings: it is not uncommon to see a 20-30% cost savings by using a structured settlement to fund an MSA as opposed to a lump sum.   Another benefit is that rated ages, used for structured settlements, also reduce funding cost as well as the total amount needed to be set aside as rated ages are accepted as evidence of reduced life expectancy by CMS.  Lastly, and probably most importantly, a structured settlement typically funds the set-aside on an annual basis which acts as a yearly deductible that once temporarily exhausted triggers Medicare to pay in that calendar year (assuming seed is exhausted as well).  Contrast this with lump sum funding which requires total exhaustion of the entire set-aside amount before Medicare ever pays for any injury related care.

CMS Guidance on MSA Funding

The Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, Version 3.5 (1/10/2022) discusses structured WCMSAs in several areas. Section 5.0 of the Reference Guide explains that in a structured WCMSA, the initial seed deposit should cover the first surgery or procedure for each body part and /or replacement along with the first two years of annual payments. This means that if the WCMSA includes projections for surgeries to three different body parts, the seed must cover the cost of these three surgeries along with the first two years of annual payments. The greater the initial seed deposit, the smaller the cost savings to be gained through annuity funding although they may still be significant.

It is important for practitioners to review the type of funding that is being proposed in the WCMSA submission to the Centers for Medicare & Medicaid Services (CMS). This information will appear on the CMS submission cover letter. Since Section 10.2 of the Reference Guide requires the claimant/beneficiary to confirm their review and understanding of the submission package, practitioners should be provided with these documents by the defense. If the WCMSA proposal cover letter seeks CMS approval of a lump sum, when the intention was to fund through a structure, the submitter will have to seek a revised CMS determination letter that changes the funding to a structure. This may result in an unnecessary delay.

CMS determinations that provide for funding of the WCMSA via a structure, will list the initial seed deposit and the annual payments. If the seed deposit that is recommended by CMS is within 5% of the seed that was proposed in the WCMSA submission, CMS will approve the seed in the submission. CMS determinations will also use the claimant’s life expectancy from the submission, if properly calculated, to identify the number of years that will require an annual payout. If a person lives longer than the number of years that are identified in the CMS determination, the annual payments will cease after the specific number of years has expired.

Funding a WCMSA with an annuity is like having an account for the claimant’s insurance deductible.  Each year a payment is made from the structured settlement annuity into WCMSA; that payment, plus any carryover from prior years, must be spent down before Medicare will pay for accident-related services in any given year.[1]  Section 19.3 of the Reference Guide addresses the administration of the WMSA when it is funded through a structure. When a WCMSA proposal is funded through a structure, the deposited funds if not properly exhausted, are carried forward in the WCMSA account. The entire amount of the funds available in the WCMSA must be properly spent before Medicare is presented with any injury related Medicare covered bills. If the WCMSA funds temporarily deplete before the next annual payment, Medicare will pay as the primary payer for additional injury related medical expenses until the account is funded again. This concept is called “temporary exhaustion.”  The claimant does not need to postpone care, as a temporary exhaustion of the WCMSA account obligates Medicare to potentially pay something towards injury related care each year.

Structured Settlement Funding Considerations for MSAs

Because structured settlement annuities are tax-free and reduce the amount needed to fund the set-aside substantially, they should be considered as the funding mechanism for nearly every set aside arrangement.  Once the parties to a settlement agree to fund a WCMSA with a structured settlement, they must agree on the type of structured settlement annuity to use.  There are several structured settlement annuity options available for funding a WCMSA, and the option chosen will depend on several factors including agreement by defense, the cost, and the preference of the claimant.

Traditionally, the defense will propose a specific type of structured settlement to fund the WCMSA known as a temporary life annuity.  A temporary life annuity provides payments only if the claimant is living and only for a certain number of years.  The number of years required is tied to the claimant’s life expectancy and expressed in the MSA allocation report or the CMS determination.  The rationale for using a temporary life annuity stream is two-fold.  First is the cost.  Using a temporary life annuity is the least expensive annuity option for funding a WCMSA.  Second, the annual payments to the WCMSA are intended to cover the injury related care that normally would be covered by Medicare which would end upon the death of the claimant.  When a claimant dies there is no reason to replenish the WCMSA so no additional payments should be made.  With the temporary life annuity, payments cease upon the death of the claimant. 

The cost of the structured settlement annuity can also be a factor when choosing an option for funding the WCMSA.  The cost consideration may depend on whether defense has agreed to fund the WCMSA in addition to or inclusive of the settlement offer.   If the WCMSA is in addition to the settlement, defense will focus on the least expensive option which would be the temporary life annuity.  If the WCMSA is inclusive of the settlement offer, the claimant may have an opportunity for other options, but would need to consider whether there are enough proceeds to cover any additional annuity funding expenses for guarantees.   

While the temporary life annuity option may be preferred by defense or by a claimant looking for the most cost-effective way to fund the WCMSA, there are other options that can benefit the claimant’s family in the event of a premature death.  An option that satisfies the funding requirement for the WCMSA and provides the claimant’s family with some additional security is a period certain annuity.  The terms are very similar to a temporary life annuity with the added benefit of all payments being guaranteed.  A guarantee provides the claimant with an opportunity for their death beneficiaries to receive any remaining payments upon death.  This can be an important feature for a claimant concerned about using settlement proceeds to fund a structured settlement annuity that does not benefit their family if they die before all the scheduled payments are made.  With a settlement inclusive of the WCMSA funding, using a structured settlement can create cost savings that benefits the claimant. The savings can be used for non-Medicare expenses or replacement of indemnity benefits.[2]

Post Settlement Administration of the MSA

Since the administration of an MSA is complicated, CMS “highly recommends” the use of a professional administrator for their funds.  Consideration should be given at the time of settlement to the benefit of professional administration for both sides and who shall be responsible for the cost.  At the claimant’s election, professional administration may be chosen and paid for from settlement proceeds.  Like funding the set-aside itself, there is also a benefit to funding the professional administration annual expense using a structured settlement.  Professional administration benefits the claimant in that the funds in the account are property spent, record keeping and attestations (“annual reporting”) are done correctly and timely, bills paid from the WCMSA are in line with the appropriate workers’ compensation fee schedules or lower, and temporary exhaustion or final depletion of the WCMSA is properly reported.   In certain cases, insurance carriers may insist on professional administration and bear the cost on behalf of the claimant.  The primary benefit to the insurance carrier is control over any remaining balances in the WCMSA account upon the death of the claimant.   Practitioners should be aware that insurance carriers may seek to have any funds that remain in the professionally administered account revert back to the carrier upon death of the claimant.  In light of this, it is important to make sure “reversion” is discussed in the settlement negotiations.  It should be clearly spelled out in the settlement documents and in the professional administration agreement to avoid any confusion.

Conclusion

Settlements that involve a WCMSA do not have to be complicated.  Making the decision to fund the WCMSA with a lump sum or a structured settlement annuity is the first step.  If the decision is made to fund with a structured settlement annuity, understanding the different funding options is the next critical step.  The defense and the claimant each have priorities, and the parties need to agree on an option for the settlement to proceed.  The final consideration is whether the claimant will self-administer the WCMSA or opt for professional administration.  While the professional administration may benefit the claimant, the insurance company may insist on it as a means to control the funds remaining in the WCMSA after the death of the claimant.  Each of the items mentioned should be considered by the parties to the settlement and be outlined in the settlement documents.  For practitioners, it is important to find a strategic partner to help guide you through the process and provide guidance on each of these critical steps for a WCMSA.    

[1] and [2] Lazarus, Jason D. and Pettingill, B. Joshua, “WCMSA Funding Mechanisms: Maximizing Recovery & Cost Savings,” Legal News by Jason D. Lazarus, Esq. A legal examiner Affiliate, 6 July 2020.  

Update on Proposed Liability MSA Rules and Civil Money Penalties

March 3, 2022

Rasa Fumagalli JD, MSCC, CMSP-F

The Medicare Trust Fund is financially unstable. At this time, the funding for Medicare Part A, which covers hospital costs, is expected to run out by 2026. In light of this bleak picture, it is no surprise that the Centers for Medicare & Medicaid Services (CMS) is taking an even more aggressive stance when it comes to the recovery and prevention of improper payments.  Although workers’ compensation settlements that close out future medical rights have always been subject to scrutiny by CMS, CMS is moving forward with further efforts to shore up the financial integrity of the Medicare Trust Fund.

The Proposed Rule regarding “MSP and Future Medicals” (EO 12866) has essentially been on hold since December of 2018. The current version of the proposed rule states that it “would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items services related to liability insurance (including self-insurance), no fault insurance, and worker’s compensation settlements, judgments, awards, or other payments.” It would also “remove obsolete regulations.”  On March 1, 2022, CMS presented the proposed LMSA rule to the Office of Regulatory Information and Affairs (OIRA). OIRA was also presented with the Final Rule for Medicare Secondary Payer and Certain Civil Money Penalties. Given the delivery of the proposed and final rules to OIRA, we expect to see a version of the rules rolled out over the next several weeks. We will continue to monitor the rules and keep you advised.

To learn more about Synergy and our Workers’ Compensation Services and see how you can leverage Synergy as a valuable partner, click here.

Laura Reaves on TLV Podcast

In episode 25 of Trial Lawyer view,  Jason D. Lazarus, J.D., LL.M., CSSC, MSCC welcomed the podcast’s first paralegal guest, Laura Reaves from the Beasley Allen Law Firm. Their conversation was an eye-opener for many listeners, as it provided insight into the important role that paralegals play in the legal profession.

Reaves shared details about her career as a paralegal and the intimate working relationship she has developed with managing attorneys at the Beasley Allen Law Firm. She explained how her role as a paralegal has allowed her to make a meaningful contribution to the success of the firm and to the cases they handle. 

Throughout the episode, Reaves and Lazarus also discussed the importance of the relationship between managing attorneys and their paralegals. They talked about how this relationship is critical to the success of any case, as it involves clear communication, trust, and mutual respect. 

The conversation also highlighted the value of paralegal work in supporting the needs of clients. Reaves explained how her work has enabled her to build strong relationships with clients and to provide them with the support they need during what can often be a difficult and emotional time. 

Overall, the episode was an important reminder of the valuable contribution that paralegals make to the legal profession. It emphasized the importance of building strong relationships between managing attorneys and their paralegals, as well as the importance of empathy and understanding in providing support to clients. Listeners who missed the episode are encouraged to tune in and gain a deeper appreciation for the vital work of paralegals in the legal industry.

Learn more here.