In business, as in life, it’s often the mistakes we make that provide the best opportunities to learn valuable lessons. While we love the opportunity to toot our own horn and highlight big wins for our clients when things go really well, we also know there’s a lot of value in looking back after things go awry and seeing where improvements can be made.
This is one of those times.
One of our clients is well-known around our office as our most compliant partner. They take Medicare compliance seriously, and they hired Flagship several years ago to ensure that they remain 100% compliant at all times.
Although we offer a full service that includes vetting every one of their claims to confirm all Medicare beneficiaries are caught and properly handled, at the time this claim was originally reported the client handled that process internally.
This time, however, a “perfect storm” formed around one particular claim and it seemed like Murphy’s Law was in full effect.
The claimant is a middle-aged man who originally injured himself at work. After filling out the necessary accident report, he decided his injuries were serious enough to warrant a trip to the Emergency Room and decided to drive himself.
On the way to the Emergency Room, this poor gentleman was involved in a serious car accident and ended up with serious injuries from the crash as well. So, in one day, he became both a workers' compensation claimant and a liability claimant.
What followed was an extensive hospital stay, several surgeries over the course of several years, and a tremendous amount of auxiliary medical services and prescriptions that were connected to one or the other of the accidents. Along the way, the gentleman applied for – and received – SSDI, which made him automatically eligible for Medicare.
The case was finally settled on the courthouse steps the day of the scheduled trial. The claimant would receive a multi-million dollar settlement, a portion of which would come from our client. Once that settlement was agreed upon, the claimant’s lawyer requested payment and our client requested an opportunity to confirm the status of any Medicare liens before writing the check.
So, their Claims Manager called Flagship for a quick rundown of any Medicare exposure on this tough case. The problem was that we received notice of the claim only four hours before he called.
The Perfect Storm
As you can imagine, this became quite a mess. Here’s a brief rundown of what made this claim so complicated from our standpoint:
- The original accident occurred years before Flagship came onboard to assist with the client’s Medicare compliance.
- At the time of the accident, the claimant was not a Medicare beneficiary.
- At the time of settlement, he was still under the age of 65, so he probably flew under the radar far too long in a claims vetting system that usually catches what it needs to.
- The settlement involved several parties: the injuries needed to be covered by both workers' compensation and liability insurance, so our client and a workers' comp administrator were splitting the settlement; a car accident occurred so an auto carrier was involved as well; the claimant and his lawyer, and Medicare.
- A full eight years elapsed between the DOI and settlement of the claim with the claimant becoming a Medicare beneficiary at some point in between, so there was the potential of many different charges – some related and some unrelated – to be tacked onto any Medicare lien.
- As recently as four hours prior to the Claim Manager’s phone call, none of the parties involved had ever given any consideration to the possibility of Medicare being a factor in the case.
Now, this many complicating factors rarely come together in just one case. But it serves as an excellent example of what can potentially happen.
The claim fell through the cracks of a generally reliable in-house claim vetting and querying process. The claimant was not a Medicare beneficiary when the claim started, so if our client checked that at the time, they would have seen no need to involve Medicare, or Flagship. But, the claim ended up dragging out for years and things changed along the way.
In addition, when the claimant’s lawyer finally agreed to a settlement, he wanted his client to receive payment immediately. This put our client between a rock and a hard place because they suddenly had a 1 to 2 month Medicare compliance process that had never been started, potentially getting in the way of settling and closing a high-risk and high-dollar claim. If they’d only realized earlier that the claimant was a Medicare beneficiary, we could have had everything ready and waiting for them to write the check that day.
So this serves as a cautionary tale for any insurance company. No matter how effective your current in-house processes are, Medicare compliance is a complex practice and can trip you up sometimes. When it does, the potential cost can be huge.
Photo credit: Zooey via Flickr