There’s Only 1 Way to Skin a Cat
I never really wanted to understand the context of the origins of that phrase, but I find myself compelled to use it today. For years, I’ve told people that it doesn’t matter who orders an MSA from us, we will always do it the same way. While there is a spread to account for the subjective individual case facts, the medical cost projection still has to fall within Medicare coverage guidelines and known pricing guidelines; therefore, the swing shouldn’t be that dramatic. I sincerely believe that there is really only one way to perform the medical assessment in an MSA, but it is the legal and financial parts that muddy the waters.
Well, there is a disturbing force developing in the MSP marketplace, and sadly, it is taking MSAs down a path similar to life care plans in that plaintiff attorneys are trying to use them to establish claim value rather than as an assessment of Medicare’s interests in an insurance claim. While not unexpected and certainly without influence on my already low opinion of the practice of dueling life care plans in general, I believe I saw the most disturbing evidence of where this practice is headed today.
Last week, I received notice of a second circuit appellate decision involving MSAs and AIG so of course my interest was piqued. The case turned on the amount in controversy and the underlying district court dismissal was upheld, so ordinarily I would have let it go. But it involved AIG so I really wanted to know what they were being blamed for this time. While the only interesting part of the case was the whiny, greedy nature of the claimant, it was that greed itself that finally captured my attention.
In order to gain an audience in federal district court, claimant needed an amount in controversy in excess of $75,000. His argument was that AIG (and indirectly NuQuest) harmed him through the delay in obtaining CMS approval, during which he was allegedly spending his entire $7,000 monthly advance on medical treatment that otherwise should have come out of his MSA. Unfortunately for him, the approval even with some unexplained delays in the initial mailing only took seven months, so at most he could have suffered $49,000 in damages. On appeal, claimant produced an independent MSA estimate from Hummel Consultation Services valuing his future anticipated medical needs at $2,383,564.72 and compared it to NuQuest’s $223,693 to demonstrate he was damaged something in excess of $75,000 (he did not allege that he was entitled to recover the difference, only that it was a loss to him none the less for jurisdiction purposes). While the court turned to an article by Ken Paradis as the voice of reason to demonstrate how the plaintiff was not harmed, the disturbing part of this story was that there was a $2M+ MSA out there somewhere in a case that CMS, although they did counter higher, still approved for only $282,179. I’ve seen my fair share of MSAs that have missed the mark, but this was egregious and intentional and the entire MSP industry is the worse for it.
In New Orleans last week during the NAMSAP conference, two new crops of certified MSP professionals were launched into the personal injury world and if nothing else, I hope they left with an understanding of the primary objective of an MSA and a sense of integrity that they do the entire MSP industry a disservice by freely disseminating MSAs like this into the world. While there is room for some discretion, making demands far in excess of Medicare’s exposure only harms the injured party by increasing the encumbered portion of their settlement funds and increasing the deductible prior to Medicare resuming benefits. Attorneys would be wise to understand the system prior to trying to game it and MSA providers who play along should just be ashamed.
Full text of the case can be found at:
JEREMIAH BINDRUM, Plaintiff, v. AMERICAN HOME ASSURANCE
COMPANY, INC., AMERICAN INTERNATIONAL GROUP, INC., AIG SPECIALITY CLAIMS SERVICES, INC., CHARTIS INSURANCE COMPANY, Defendants.
Case No. 5:10-cv-116 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT 2011 U.S. Dist. LEXIS 11373
February 4, 2011, Decided February 4, 2011, Filed
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT 2011 U.S. App. LEXIS 19932
September 29, 2011, Decided