9/8/2021

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Thomas Geroulo

None of this has happened yet… “Don’t worry darlin….

No baby, don’t you fret,

We’re living in the future and

And none of this has happened yet”

---“Living in the Future”

Long Walk Home Getting our minds right

Overview of Damages Concepts/Insurance Schemes

Questions

You’ll probably need a drink after this….

9/8/2021

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Leap of Faith Plaintiffs Resist This At Every Turn

Defense counsel can be resistant to it (“setting a basement”)

The Collateral Source Rule is a major obstacle

Venues of Doom: Chicago, Florida, Streets of Philadelphia...

“It takes a leap of faith to get things going”

Santa Claus is Coming to Town

The Promised Land Stayton (Delaware Supreme Court)

“Healthcare debt is simply extinguished by operation of law when the healthcare provider elects to

accept payment of assigned benefits directly from Medicare”

“The fact that the written off portion of Stayton’s medical bills is thirteen times the amount paid gives us

pause….It also reflects the way in which the realities of today’s healthcare economy diverge from the

traditional underpinnings of the collateral source rule.”

“Discounting is the rule rather than exception in healthcare today. Only a small fraction of persons

receiving medical services actually pay original amounts billed”

“The small share that do are typically uninsured and yet not without means, a population that is

expected to decline as a result of the insurance mandate of the Patient Protection and Affordable Care

Act.”

“The collateral source rule does not apply to the amounts written off by [Plaintiff’s] healthcare

providers.”

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The LCP’s E Street Band Lead guitar: Medicaid.

Bass: Medicare.

Drums: Private insurance (real name: ACA).

Encore: The Reasonable Value Approach.

Medicaid is Living Proof Income tested insurance coverage

Provides the most likely source of covered attendant care

Most nimble of insurance schemes—Can be combined with private insurance (and Medicare)

Plaintiff magazine says: “If Plaintiff structures their settlement, they can still be eligible for Medicaid. This would

negate the need to purchase private insurance or it can be used in tandem with private insurance” “strategy can save

the Plaintiff thousands of dollars annually” – Plaintiff magazine Jan ‘13

Bottom line: Special Needs Trust utilized to preserve Medicaid, authorized to purchase private insurance on top of Medicaid,

and funded through annuity products to finance all uncovered items without having to debate life expectancy.

This is a formula for birth injury cases and many select cases for Plaintiffs under 65

Potentially profound implications for saving money, reducing subrogation exposure for the Plaintiff’s family

A special needs trust should be something you ask about all the time in your case

| 9&

One Time and Lifetime Annual Payments and Cost

Projected Care CategoryACA Insurance

Coverage

Medicaid And

Waiver

Uncovered Costs One-

Time & Initial

Uncovered Costs Future

Annual Payments

Physicians Covered Covered

Procedures/

Hospitalizations/

Surgeries

Covered Covered

Education Covered Covered – School District

$482 - Testing

Evaluations Covered Covered

Therapies 20 visits each

Speech, PT, OT

Covered $7,920

Diagnostic Testing Covered Covered

Medications Covered except OTC Covered

Supplies Covered except routine

disposable items

Covered $185 $1,360 for 2 years

thereafter $648 for life

compounding 2.5%

Equipment Covered Covered

Orthotics/

Prosthetics

Covered Covered $174 for life compounding

2.5%

Wheelchairs Manual- Covered Covered Electric-$2,472 for 4 years,

then $1,977 for life

compounding 2.5%

Wheelchairs

Accessories and

Maintenance

Manual-Covered Covered Electric-$1,913 for 4 years

thereafter $2,203 for life

compounding 2.5%

Aids for Independent

Living

Not Covered Covered $2,866

Home Furnishings Hospital Bed Only Partial Coverage $9,990 $821 for life compounding

2.5%

Home Care 60-4hr. home health

visits

Covered

Facility Care In-Patient hospital plus

25 days SNF

Covered

Case Management Likely covered Covered

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| 10&

Projected Care

Category

ACA Insurance

Coverage

Medicaid And

Waiver

Uncovered Costs

One-Time & Initial

Uncovered Costs

Future Annual

Payments

Case Manager Not Covered Not Covered

$4,275 for life

compounding 2.5%

beginning 2016

Transportation Not Covered Not Covered $42,790 $3,370 for life

compounding 2.5%

Vocational Plan Not Covered Covered

Health & Strength

Maintenance

Not Covered Unknown $2,185 $503 for 4 years

thereafter $3 for life

compounding 2.5%

Architectural

Renovations

Not Covered Minor Home

Modifications

$356 $7 for life

compounding 2.5%

ACA – United

Healthcare Platinum

250 Policy

Not Covered Not Covered $3,660 $3,752 for life

compounding 2.5%

beginning 2016

TOTAL ONE TIME &

INITIAL PAYMENTS

$70,434 $512,595

TOTAL COST $583,029

GUARANTEED

BENEFITS

$595,435

EXPECTED BENEFITS $3,991,628

Medicare is a Brilliant Disguise Medicare Secondary Payer Act (1980)/SCHIP Extension (2007)

Liability Medicare Set Asides are coming

A financial agreement that allocates a portion of a settlement to pay for future medical expenses related to an injury that must be exhausted before Medicare will pay for treatments related to the injury

Essentially a life care plan to protect Medicare from paying when other insurance is involved

It’s the Trojan Horse of Collateral Source

“Is that you baby or

just a Brilliant

Disguise?”

Lifetime Total of Medical Services and Equipment Related to Injury

+

Lifetime total of Prescription Medication Related to Injury

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Pay Me My Money Down

Pay Me Or Go to Jail….Pay Me My Money Down

Pay Me My Money Down….

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Chasin’ Wild Horses and Collateral Sources

“The collateral source rule precludes a tortfeasor from obtaining the benefit of payments to the injured party by a source other than the tortfeasor” --Every collateral source case

Taransky v. Sec’y HHS (3rd Cir Court of Appeals) (NJ law)

“…we predict that the New Jersey Supreme Court would hold that Medicare payments, because of their conditional nature, do not constitute a collateral source of benefits under the NJCSS.”

An MSA’s Secret Garden “You had me at Hello”

As MSA can fit inside of a Special Needs Trust

Some people refer to these as an MSA Trust (don’t forget that)

An MSA can and often does utilize structured funds

An MSA can be a private agreement

An MSA preserves Medicare coverage/may ward off malpractice

An MSA can be insured

Cover Me(Shhh it’s the ACA)

Pre-existing Condition coverage matters most

Repeal has been unsuccessful

Markets are stabilizing/networks are small

Still a piece of the damages puzzle

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COVER ME: LIFE CARE PLAN VS INSURANCE

BASED PRODUCTS

Typical Life Care Plan Available Insurance (Public/Private)

Office Visits Close to 100% Covered

Yearly Evaluations Close to 100% Covered

Case Management Services Covered

Medical Services Covered

PT/OT/ST 30%-50% covered

Durable Medical Equipment Close to 100% Coverage

Prescriptions/Supplies >95% covered (OTC not covered)

Prosthetics/Orthotics Covered

Acute Hospitalizations Covered

Attendant Care Requires Sophisticated Work

Combining Private Insurance with Medicaid unlocks this issue in many cases particularly with birth injury claims

The Ties That Bind: Reasonable Value The frontier of damages mitigation has evolved to be the use of the

term “reasonable value”

What is the exchange rate? What is the market rate? What is real?

This brings in all the forces of Medicaid, Medicare, ACA, private insurance

You know, those things where pre-existing conditions are covered?

It’s neutral tone is more court pleasing

It lacks political overtones

The Ties That Bind ACA Evidence has been allowed in several states (and continues to find

places even with current events)

Many states have improved on the billed vs. paid rate discussion but there is work to do

Politics failed to do away with pre-existing condition coverage for now

So what is reasonable value?

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The Ties That Bind Definition: What is paid on the open market, not what doctor charges

Considered more of an issue of just compensation rather than invoking collateral source

Has seen defined case law progress and has historical support

Combined with pre-existing condition coverage, it is potent

Oooooh……Growin Up…

Dancing in the Dark AGREEING WITH CO-DEFENDANTS TO

FIGHT DAMAGES

FINDING WILLING STRATEGIC PARTNERS AND FINANCIAL ONES

AVOIDING FINGER POINTING

COHESIVE MOTION WRITING AND PRACTICE

COHESIVE EXPERT USEAGE

PATIENCE IS REQUIRED AND A LONG TERM VIEW IS CRUCIAL