The Medical Billing Shell Game and the Insufficient MSA
Recently we discussed what I referred to as the “medical billing shell game,” writing about what appeared to be the lack of correlation between confusing retail medical bills and what is ultimately paid by Medicare or a private insurer. The gist of that discussion was that the people least likely to financially cope with a medical crisis, the uninsured, get stuck with the highest tab, simply because the power of the negotiated rate is not available to them.
It never dawned on me that injured workers with a self-administered Medicare Set-Aside (MSA) could suffer the same fate.
At the IAIABC Annual Convention held a few weeks ago in Williamsburg, VA, Marques Torbert presented on this very topic. Torbert is the CEO of Ametros, a firm specializing in professional administration of MSA's.
While his presentation was related to broader challenges injured workers confront when managing their MSA funds, it was the potential pricing disparity that truly stood out. When an employer or carrier calculates the money needed to adequately fund an MSA for an injured workers future medical care, they use as a basis the current and expected costs of medical services and pharmaceuticals. These costs are all based on the current fee structures in place (fee schedules or the "usual and customary" rates, depending on jurisdiction) for the care they have provided the worker to date. But when the injured worker is “out of the system” and on their own, they are often out of the network, and therefore subject to billing at the much higher retail prices proffered by the medical community. The upshot, of course, is the medically unsophisticated injured worker who cannot negotiate better deals is much more likely to burn through their MSA at an accelerated rate – and the MSA will not be sufficient to protect Medicare or the worker in the future.
And that has potential ramifications for the people who established the MSA as well.
I've long been a fan of professional administration for Medicare Set-Aside accounts. I wrote about that almost 5 years ago (in the interest of full disclosure, Ametros is a customer, but that article was written long before this was the case). It has never made sense to me that our industry goes through the complicated machinations of calculating and funding these accounts, only to then hand them over to the same person we were trying to protect in the first place. This isn't a shot at injured workers; it is a reality that medical billing codes and proper documentation for services represent a complexity that most of us would struggle with.
Add to all this the fact that the self-administered plan may face much higher expenses than was anticipated, and it is just making the argument for professional administration all the more compelling.
I'm frankly surprised that the government hasn't determined it would be better for it to “manage” the billions of dollars that exist in MSA funds, similar to how they safely manage the “social security trust fund” (quotation marks used with sarcastic intent).
As Torbert pointed out, professionally administered plans could offer the same network protections that were available to the carrier and employer. There are other benefits as well. He made an excellent point that the injured worker, who has been widely assisted during the management of their care, is suddenly left on their own with no support network once their case is settled. They are left to navigate the waters on their own. The fact that, despite good intentions, the lifeboat they've been provided may run out of provisions before they safely reach the shoreline should be a major concern.
The alternative solution, of course, is one of two things. We could calculate the required funds for an MSA at the out of network retail rates; or simply build the low cost of professional administration into the mix.
I know which one I would choose. And everyone would be better off for it.
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Robert Wilson is President & CEO of WorkersCompensation.com, and "From Bob's Cluttered Desk" comes his (often incoherent) thoughts, ramblings, observations and rants - often on workers' comp or employment issues, but occasionally not.
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