Workers Comp Lifetime Medical Buyout Calculator: How Much is My Lifetime Medical Award Worth?
Before Deciding Whether You Should Keep Medical Benefits Open or Settle Workers Comp Lifetime Medical, You Must Calculate Potential Future Medical Costs and Think About How You Will Get Treatment For Your Work Injury Post-Settlement.
The purpose of workers compensation law is to protect employees who suffer on the job injuries. This is true of every workers comp law in every state in the country.
To satisfy this purpose, the law requires employers or their insurance companies to provide reasonable and necessary medical treatment to eligible injured workers, so long as the care is related to the work injury. In Virginia there is no cap on the length of time an employer may have to provide medical coverage for an on the job injury or occupational illness. Many states allow for similar lifetime medical awards.
Employers must provide these lifetime medical benefits to injured workers unless the parties agree to a settlement to close medical benefits.
Deciding between open lifetime medical benefits or a cash buyout of your future medical expenses is an important decision. This is a significant amount of money in most cases. Often medical costs account for the majority of the total cost of a workers compensation claim.
The purpose of this article is to give you – the injured employee- a guide to workers compensation settlements for future medical so that you can make an informed decision on whether you should keep your lifetime medical award or accept a buyout that closes medical benefits. My hope is that you only accept a buyout if it provides enough cash to pay for future medical care you may need post-settlement.
If you have questions about a workers comp lifetime medical buyout, call me for a free consultation: 804-251-1620 or 757-810-5614. I help injured workers throughout Virginia decide whether a full and final workers compensation settlement or open lifetime medical is the best option for their needs.
Understanding the Terms: Open Lifetime Medical Benefits vs. Closed Medical Benefits
The workers compensation law states your employer must pay for reasonable and necessary medical treatment related to your work accident, so long as the treatment is given by or at the direction of an authorized treating physician or health care provider. Judges with the Workers Compensation Commission decide whether specific medical care is covered under the law if there is a dispute between you and the insurance company.
You have the option to close medical benefits and obtain medical treatment free from the control and involvement of your employer and its workers compensation insurance company post-settlement. This is done with a voluntary financial settlement between you, the employer, the insurance company, and, in some cases, the third party administrator (TPA). If you are dealing with a workers comp claims adjuster with an organization such as Sedgwick or Gallagher Bassett, then a TPA is involved in your case.
In some states you are not allowed to close medical benefits if the parties agree, or the Workers Compensation Commission finds, that you are permanently and totally disabled. But that is not true in Virginia.
Do I Have to Cash Out Workers Comp Future Medical Treatment Benefits?
No.
An employer and its insurance carrier cannot force you to accept a cash settlement to close medical benefits.
Nor can you force the employer or its insurer to buy out your future medical care.
What are the Advantages of Open Lifetime Medical Benefits? 13 Reasons to Keep Your Lifetime Medical Award under Workers Comp.
Some injured workers prefer to keep lifetime medical open. There are several reasons for this:
1. You do not have to pay for authorized medical treatment related to your on the job injury. At all. The insurance company must pay all of your bills, even co-pays. And there is no deductible.
2. You do not have to worry about rising health care costs. Determining projected future medical costs is difficult because it is hard to project how quickly and by how much the cost of medical care will continue to rise. This increases the risk that you will not receive enough settlement funds to cover the costs of future medical needs. With open medical benefits, you don’t have to worry about that.
3. You do not have to worry about projecting what medical treatment you may need over the rest of your life. Even when you and the insurer agree on the cost of medical services, you may still disagree on what type of treatment you may need over the rest of your life. By keeping medical open, you do not have to think about the different routes your health care may take.
4. You do not have to negotiate payment arrangements with physicians and other health care providers. If you have ever received and read an Explanation of Benefits (EOB) from your private health insurer or government health care coverage, then you know the amount your doctor charges is much more than the insurer ends up paying. When you keep your lifetime medical award you do not have to worry about persuading your doctors to charge you less money than they charge insurance companies for the same health care service.
5. There is no cap on the amount of money the insurance carrier may have to pay for medical treatment related to your work injury.
6. Unexpected events can happen. For example, a client of mine suffered a torn rotator cuff and neck injury in the late 1990s, requiring shoulder surgery and a cervical spinal fusion surgery. Everything was fine for more than ten years, when the surgical hardware failed, leading to a recommendation for a revision surgery. Because my client kept his open lifetime medical award for more than a decade after the initial surgery, I was able to negotiate a larger settlement closing medical benefits when a dispute arose over the causal relationship of the second spine surgery.
7. The insurance company must reimburse you for mileage to and from doctor appointments for your work injury. This is an added financial benefit. If you close medical benefits then you will have to pay for your own gas and transportation.
8. The insurance company must provide transportation to and from medical appointments for your work injury if you are unable to drive, do not have a car, or cannot find a ride. You cannot count on private health insurance providing this service post-settlement.
9, You have the right to file a change in condition claim seeking authorization and payment of medical care if the insurance company issues a medical treatment denial. There is no guarantee that you will win at the workers compensation hearing, but you have the opportunity to present your case.
10. You may receive wage loss benefits for time missed from work for medical appointments or surgeries. Depending on when you have the surgery or medical appointment and when you were last paid benefits under an Award Order, you may receive income replacement benefits for time missed from work related to medical care if you keep your lifetime medical award open.
11. You will have treatment options. When you have lifetime medical benefits, your employer must provide medical care. So, for example, your employer must find a new doctor for you if your current doctor retires or leaves the area, or decides to no longer accept workers comp patients. The same is true if you move to a rural area or out of state. If you give up your lifetime medical award, you will have to find a doctor that accepts your other health insurance coverage or whom will treat you if you do not have insurance. This can take time and increase your stress.
12. You do not have to worry about a health insurance plan attempting to recover payments for treatment for work injuries or denying coverage.Sometimes private health insurance or a government health coverage plan will pay for treatment for work injuries. But if you settle lifetime medical, there is always a risk that these plans will deny coverage for future treatment or seek reimbursement for past payment that they believe workers comp should have covered. If your private health insurance retracts payment or asks you for reimbursement, you may end up losing more money than you received by accepting a buyout of medical benefits.
13. The insurance company will help with claim handling, which includes scheduling appointments and verifying payment to medical providers. When you continue to treat through workers comp, the claims adjuster or nurse case manager will take care of scheduling doctor and therapy appointments and making sure the bills are paid. Though sometimes medical bills slip through the cracks and you will need to remind your medical providers that debt collection activities must stop when you have a workers comp claim.
Why Should I Cash Out Medical Benefits? 17 Reasons to Accept a Settlement to Close Lifetime Medical for Your Work Injury.
Many injured workers choose to close medical benefits.
There are several reasons why it may make sense to accept a buyout of future medical treatment:
1.You do not think you will need additional medical treatment. If you have reached maximum medical improvement (MMI) for your work injury then your doctor may release you from care and tell you to only return as needed. If you do not think you will need additional care then your lifetime medical benefits have little to no value and it may make sense to close them for a lump sum that is worth more than the medical award.
2. You do not like your workers compensation doctor. Under the workers compensation law your employer and its insurer have some level of control over your care. To start, you must choose your doctor from a panel of physicians offered by the employer. As you can guess, many doctors end up on this list because they are conservative on issues of causation and disability, and not claimant friendly. Unfortunately you may be stuck with this doctor as long as you keep open lifetime medical benefits because it is difficult to change your your workers comp doctor.
3. You want to treat with your own physicians. Some of you had established patient-physician relationships that were disrupted when you suffered an on the job injury. You may feel that you will have a better outcome and recovery if you are able to treat with a doctor you trust instead of a workers compensation physician chosen by the insurer.
4. You may experience a better physical and mental recovery without the stress of litigation. Several studies have shown that injured workers who settle their lifetime medical and treat outside of the workers compensation system experience better treatment outcomes than injured workers who do not.
5. You do not want to have to litigate to force the insurance company to pay for medical treatment recommended by your treating physician. Even though you have a lifetime medical award, the insurer can deny treatment at any time. When this happens, your only option is to file a workers comp claim asking the Workers Compensation Commission to authorize the treatment. It is common for one workers comp case to require two or more hearings on medical authorization disputes. In my experience many insurance companies will dispute the need for surgery, especially if you are diagnosed with a soft tissue or muscle injury initially.
6. You may lose your claim seeking additional medical care, even if you have open lifetime medical. You have the right to seek treatment under your lifetime medical award. But you also have the burden of proving the medical treatment is reasonable, necessary, and causally related to your work accident. And there is no guarantee that you will win. That is why it may make sense to settle for less money than the cost of the treatment you are seeking. You may feel it is better to walk away with something rather than nothing.
7. You may have to continue dealing with a nurse case manager who will try to manage your medical treatment to an extent that is inappropriate under the law. Many nurse case managers are good. But some are bad, which is often frustrating and adds insult to injury. Combative interactions can increase the likelihood that you will suffer depression because of your work injury.
8. You have little to no privacy treating under a lifetime medical award because HIPAA does not apply to workers comp. When you close medical benefits and treat through other sources, you get much of your privacy back.
9. You do not want the hassle of attending IMEs or FCEs with health care providers chosen by the insurance company. Under the workers compensation law your employer or its insurance company can usually force you to attend at least one defense medical examination or functional capacity examination per year. Sometimes these appointments go smoothly. But other times you are subjected to interrogation by medical providers who are looking for a basis for the insurer to stop your benefits. It can be grueling to relive your accident and injury over and over again.
10. You are moving to a rural area or out of state, and receiving timely health care is difficult. Many workers comp insurers and TPAs have networks of doctors across the nation. But if your claim is against a self-insured employer or a smaller insurance company, it may take a long time for the employer or insurer to find a doctor that will accept workers comp coverage near your new residence. You may find it easier to accept a cash payment to close medical benefits so you can find a physician on your own.
11. Depending on when you last received payment under a workers comp Award Order, you may not be eligible for wage loss benefits, including temporary total disability and temporary partial disability, even if you are taken out of work for surgery or other medical procedures related to your work injury. That is because of various workers compensation statutes of limitations that may apply. If you wait too long to get surgery, or if the insurance company denies liability for the proposed surgery and forces you to litigate, you may not be eligible for wage loss benefits by the time the surgery takes place. I have represented many clients who were hesitant to undergo surgery because it would result in time missed from work and financial harm.
12. Open lifetime medical benefits often require the insurance company’s approval before a doctor or therapist will treat you, which leads to delay in treatment and recovery. Even when you have treated with the same physician for the same work injury for years. I have lost count of the number of times an insurance claims adjuster has closed a workers compensation claim without reason or warning, only to reopen it after a delay of several weeks. Or the number of times a claim is re-assigned to a new claims adjuster whom takes weeks to get up to speed on the file and refuses to authorize additional care until they are. Frequent delays can affect your ability to recover quickly and completely.
13. You have private health insurance. Some of you may accept a settlement to close medical benefits because you have health insurance through your employer, your spouse’s employer, or the health insurance exchange, and you intend on using your private health insurance for your work injury. This may be a good option if your employer raised defenses to your workers comp claim. But be careful. You need to include appropriate language in your settlement documents to minimize the risk that your private health insurance plan will exclude coverage for the work injury.
14. You have health care coverage under Medicare and CMS approves the cash buyout of medical benefits. Medicare is a secondary payer to workers compensation, meaning that it does not have primary payment responsibility for health care related to your work injury. You must take Medicare’s interests into account when settling the medical portion of your workers comp claim. In my opinion it often makes sense to accept a cash buyout of lifetime medical benefits if you are Medicare eligible and the Centers for Medicare and Medicaid Services (CMS) approve the amount of the cash buyout. CMS will review a proposed Workers Compensation Medicare Set Aside Arrangement (WCMSA) if your claim meets certain review thresholds. After receiving Medicare approval of your lifetime medical buyout, you can treat through Medicare for your workers compensation injuries if you run out of settlement funds.
15. You have concerns with your physician’s treatment plan and do not want to move forward with surgery. Under the workers compensation law the insurance company can file an application to suspend benefits if you refuse medical treatment. The Commission will then determine whether your refusal of medical care is justified. If so, it will reinstate your benefits. If not, your benefits will stop until you accept the treatment offered. For example, let’s say you underwent a lumbar discectomy for a back injury resulting in a herniated disc. But that surgery fails, so your doctor recommends a fusion. You may hesitate to undergo another surgery when you continue to experience pain after the first surgery – and I don’t blame you. But your hesitation could result in the insurer trying to cut off your wage loss benefits, which you need to provide for your family. By closing medical benefits you do not have to worry about an interruption in wage loss payments.
16. You were injured in a subsequent accident that creates causation problems in your workers comp claim. If you are involved in a second work accident, a slip and fall accident, or a motor vehicle accident when you have open lifetime medical benefits, it may make sense to close medical benefits because the insurer will argue that any ongoing treatment is unrelated to the initial work accident.
17. You want to maximize your total recovery when you have a third party claim arising out of the work accident. Some of you may have a third party claim based on negligence and tort law arising out of the same work-related accident that resulted in a lifetime medical award. For example, you may have a product liability claim if you suffered a hand injury because of defective machinery, or a personal injury claim if you suffered whiplash in a car accident while working. If you have a concurrent negligence action and there is plenty of insurance coverage from which to collect damages in that action, you may want to close medical benefits to reduce the workers comp lien and your employer’s subrogation rights against the third party action.
Calculating Future Medical Costs and Expenses in Workers Compensation Claims
My peers and past clients have voted me one of the best workers compensation lawyers in America, a Top 100 High Stakes Litigator, and a Rising Star in the areas of workers comp, Social Security Disability, auto accidents, and catastrophic injury, which includes brain injury, post-concussion syndrome, spinal cord injuries, amputations, burn injuries, and paralysis.
A big reason why is my ability to analyze the cost of future medical treatment for my clients and to persuade the insurance company to pay a reasonable amount of money that considers those expenses.
The value of lifetime medical benefits differs from claim to claim. But there are patterns and factors that help me determine future medical costs in workers compensation These include:
- The workers compensation medical fee schedule. In 2018 Virginia enacted a medical fee schedule to set the maximum price that medical providers can charge for each service. The fee schedule only applies if the insurance company and your treating physician do not have a network agreement that determines the cost of service.
- Where you live. If you live in a rural area and require specialized medical care, then one of two things will happen: (a) you will have to pay more for treatment because of the limited supply of specialists or (2) you will have to travel to a larger city. It is important to take these travel expenses into consideration.
- Your age and life expectancy. Generally the younger you are the greater your projected medical expenses.
- The severity of your injury. The more severe your injury, the greater the future medical costs usually.
- Whether you have any unrelated medical conditions that will affect your life expectancy, such as smoking, diabetes, or a history of cancer.
- The number of follow up doctor visits you will require.
- Whether you will need additional diagnostic testing, such as CT scans, MRIs, and X-rays
- Whether you will require prescription medication. Opioids and narcotics are major medical expenses.
- Whether you will require over the counter medication to treat symptoms from your work injury.
- Whether you will require additional physical therapy or work hardening.
- If you will require ongoing management for chronic pain.
- Whether you will need home or vehicle modifications because of your disability.
- How often you will have to replace your medical equipment and prosthetic devices.
- Unexpected costs. If you have undergone surgery or the placement of hardware, make sure you consider the unexpected, such as the need for revision surgery or hardware removal.
- Expected inflation rates.
- Expected rise in health care costs.
- The likelihood that your medical condition will worsen after you settle.
- How well you have recovered so far.
- Other coverage options available to you.
Determining the monetary value of future medical expenses is difficult.
But experience helps.
I use the information and data from the thousands of cases I have handled, as well as life care planners, doctors, and insurance experts, to maximize the settlement buyout value of workers comp lifetime medical.
How to Close Lifetime Medical Benefits in Workers Comp. A 10 Step Guide to Negotiating a Buyout of Future Medical Care.
So you have decided to close your workers comp medical benefits. Now what?
I recommend you follow the ten steps below to get the most amount of money possible for future medical treatment for your workers comp injury.
1. Schedule a conference with your doctor to discuss what type of future medical care you may need for your work injuries.
2. After the conference, ask your doctor to write a report detailing the following:
- Your diagnosis
- Your life expectancy
- How many office visits per year you will need and the doctor’s average office visit cost
- Whether surgery is anticipated
- Whether physical therapy is anticipated and, if so, the expected frequency of PT appointments
- What other medical conditions you have that may impact your life expectancy or recovery. These are called co-morbidities.
- Your current medications
- Other medications you may require for your work injury in the future
- Whether you will require home health care or skilled nursing for your work injury. And, if so, when and how frequent.
- What other medical specialists you will need to see for your work injury and the number of required office visits per year
- What medical equipment, including orthotics, prosthetics, and assistive devices, you will require and how often you will need to replace them
- What home and vehicle modifications are appropriate for your work injury
You should ask each of your workers comp physicians to provide this information.
If your doctors will not complete this report, then you should request a complete set of medical records using my Hi Tech Act Letter to keep costs down.
3. Ask your employer or the insurance claims adjuster to send you a printout of medical expenses paid to date for your claim.
4. Consult with a lawyer, life care planner, and financial adviser to determine how much money you will need for future medical care related to your work injury. Give a copy of your medical records and the insurance company’s medical expense printout to your attorney so that he can come up with a future medical cost projection. If you have already hired an attorney, then he will have requested these documents already. I have a network of experts I use to help my clients determine the amount of money they need to pay for expected future medical needs and to develop a negotiation strategy for workers comp future medical care buyouts.
5. With the help of your lawyer and other experts, prepare a well-supported report that details your future medical needs and anticipated costs.
6. Determine three numbers: (a) how much you think the insurance company will pay to close medical benefits; (b) the range you are willing to accept to close medical benefits; and, (c) where you want to start the future medical care settlement negotiation. This last number should be the highest number you can support with evidence.
7. Send a settlement demand letter to your employer or the claims adjuster. Include supportive documentation in the demand package. Call or email the claims adjuster two weeks later if you do not receive a response before then.
8. Negotiate a lifetime medical buyout that is acceptable to all the parties. Sometimes this is completed in one day. Other times it takes weeks or months. You may want to use workers compensation mediation to negotiate a lifetime medical settlement. Before finalizing the future medical settlement, make sure you know:
A. Whether the buyout is paid in a single lump sum or with periodic payments over a specific number of years. Generally I am against structured settlements that pay over a number of years unless the settlement is for more than $1 million.
B. If you have agreed to a structured settlement of future medical, who will get the remaining payments owed if you die. I recommend demanding that any unpaid funds go to your estate, especially if you have a spouse, children, or parents that rely on you for money.
C. Whether Medicare approval is necessary and, if so, who will submit the proposed medical buyout to Medicare for approval.
D. If Medicare approval is required, what portion of the settlement is for Medicare-covered medical expenses and what portion is for non-Medicare-covered medical expenses.
E. What Long Term Disability or Social Security Disability proration language will be included. You can receive both Social Security Disability and workers comp at the same time. Similarly you can receive workers comp at the same time you are receiving long term disability insurance payments or Virginia Retirement System (VRS) disability. Your settlement documents must contain language that minimizes any offset between the different workers comp and disability programs.
F. Who is responsible for administering medical bills after settlement. Dealing with doctors’ offices and insurance companies is usually frustrating – at best. You can ask the workers comp insurer to pay for professional claims administration services as a term of the lifetime medical buyout. This will save you lots of time and give you peace of mind.
G. Whether you will have to resign your job to settle.
9. Obtain approval from the Workers Compensation Commission. In Virginia no settlement is final without approval from a workers comp judge.
10. Receive your settlement check. Deposit it in the bank. And use it for medical treatment after settlement of your workers comp case.
Can I Reopen the Lifetime Medical Award if I Find Out I Need More Treatment Than I Thought?
No.
You cannot get medical treatment at your employer or its insurer’s expense if you accept a cash buyout of your open lifetime medical benefits and the Workers Compensation Commission approves it.
That is why it is important to consult with an attorney before deciding an appropriate settlement offer for future medical care.
Need Help Deciding Between Open Medical Benefits and Settling Your Workers Compensation Claim?
This article is meant to serve as a starting point for those of you considering the benefits and disadvantages of settling your workers comp claim with closed medical benefits versus keeping your lifetime medical award. I hope you find the information helpful as you decide what to do about future medical treatment for your work injury.
Remember: You should only close medical benefits if the settlement offer makes financial sense. If it doesn’t, turn the offer down. You can always try to close medical benefits at a later date.
If you have any questions about the workers comp claims process and what is best for you, call me for a free consultation. I regularly meet with injured employees in Richmond, Chesterfield County, Williamsburg, Hampton, Newport News, Virginia Beach, Norfolk, Chesapeake, Fredericksburg, Fairfax, Arlington, Loudoun County, Harrisonburg, Charlottesville, Roanoke, and Bristol. And I look forward to meeting you.
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