Crowe Paradis Enters the Custodial Management Business

Medicare Set-Aside Blog on November 17, 2010
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The clever fellows over at Crowe Paradis have apparently flip-flopped on their righteous indignation about offering MSAs and custodial services to their clients. Apparently, they once regarded such an offering as a conflict of interest per this posting under the FAQ section of a prior version of their website. It was a not so subtle attack on the likes of NuQuest and Medivest along with yours truly.
“Our vendor has a one stop shop for professional administration.
Why don’t you?
While this may seem like a simple solution, in our view it is not the best approach. Professional administrators charge a fee on the amount of the money being administered. As a result, it is our contention that this raises at the very least a potential conflict of interest. In other words, the higher the MSA amount the more money is made on the administration. In response to this issue, Crowe Paradis has developed a strategic partnership with Rising Financial Solutions. Rising does not prepare MSA allocations and they have a long history of providing bill review services. So, if you require professional administration or self-administration support services, we are ready to lend a hand without the ethical wrinkle”. – August 2008. (Thanks to our friends at Wayback Machine for preserving the historical internet record)

Well times have apparently changed. Not satisfied with 1,200% revenue growth over the past three years, their Private Equity Partners have given the blessing to enter into this not very lucrative segment of the MSA market by driving market demand for custodial services in direct competition with their defense client’s interests. The conflict of interest isn’t in offering both services together. The conflict is aggressively marketing a service that is only needed on a small amount of claims to the mass market which drives up settlement costs for all.   For only a $1,995 set-up fee and $400 per year, you can have a computer handle your custodial accounts under $250,000. That adds an average of $6,000 to every MSA which in my humble opinion are already too burdensome on the claims settlement process. (BTW, they reserve the right to increase the fee if services of a case manager are required which in my experience almost always is the case). Progressive Medical will be doing the heavy lifting of providing the PPO, PBM and DME interface and I suspect there must be some sort of revenue sharing agreement between the two firms although this has not been confirmed by any source.

Industry sources report that Crowe has recently dropped their partnership with Rising Medical and escaped their service contract by forming a separate company that ostensibly has nothing to do with Crowe. I really dislike that marketing tactic and general way of doing business. It is a not too clever sham to jettison long standing business partnerships and to obfuscate a real conflict of interest when serving multiple constituencies during litigation.

MSA Care Guard is backed by Ametros Financial (I could find no corporate filings for either of these entities in Massachusetts) which coincidentally is advertising for a case manager position located in, you guessed it, Crowe Paradis’ new 41,000 square foot office building in North Reading Massachusetts. It is also headed by Sandra O’Sullivan who’s current linked-in profile lists her as VP of Business Technology at Crowe Paradis. She was a also former project manager at Millbrook, Inc. which not so coincidentally built CPSC’s MSA Navigator Platform, their answer to Section 111 reporting and world dominance in the MSA space. And despite the separate branding, P.O. Box, privacy controls on their domain registration and no reference to their corporate affiliation, the patent filing clearly indicates this was the brain child of Kenneth Paradis, Rob Lewis and former PMSI COO Jack West. If this was supposed to be a secret, it was not very well kept. Attached is the patent application  filed by Kenneth Paradis on January 14, 2010 claiming rights to a new business method and software platform titled “SYSTEMS AND METHODS FOR TRACKING HEALTH-RELATED SPENDING FOR VALIDATION OF DISABILITY BENEFITS CLAIMS”. See attached 25 page filing here. (MEDVAL will be filing an objection to the patent for prior art since many of the claims have been in prior use for many years).

I am not worried about CPSC making their MSAs too high to generate custodial fees (CMS already does that for them when countering their MSAs).  I worry about the insurance market believing that Professional Administration somehow ensures a greater degree of MSP compliance for the defendant and plaintiff attorney. That simply isn’t true. Professional Administration benefits claimants who need the service which can be a valuable benefit during settlement negotiations. And if I was AIG or ACE or any number of the defense clients CPSC serves, I would be hopping mad at my partners attempt to further profit on the back of my increasing loss ratio.

Crowe Paradis is repeating the mistakes of their predecessors atop the MSA heap -Gould and Lamb, PMSI and Coventry. They are growing too fast(#255 in the country), losing clients to poor service and outcomes, coming up with solutions no one needs and wrapping it together with gimmicky marketing.


PS, MEDVAL will match any pricing offered by Ametros Financial  and/or CPSC MSA and still provide the quality service and MSP compliance our clients have enjoyed since 2003. No computer interface or patented technology needed.