September 17, 2020 - For claims professionals and attorneys involved in the evaluation, negotiation, and resolution of claims and lawsuits of the catastrophically injured, life care plans provide a road map to recovery and help assess the proper monetary value of certain special compensatory damages for which financial relief is being sought.
But what is the true cost of providing such care?
The answer to that question might be less obvious than one would think it should be.
What Is a Life Care Plan?
" . . . a dynamic document based upon published standards of
practice, comprehensive assessment, data analysis, and research,
which provides an organized, concise plan for current and future
needs with associated costs for individuals who have experienced
catastrophic injury or have chronic health care needs.”
Despite the stated objective of standardizing the process, it should come as no surprise that life care plan evaluations often vary in their scope and pricing. It's not uncommon to find "dueling experts" expressing different professional opinions on the care required to make an injured party whole and what it will cost.
But whereas the defense and plaintiff sides might be unable to find common ground on the type of care needed to improve the standing of one whose life has been turned upside down, determining the appropriate cost of care can be much more straightforward.
Blackboarding the Numbers
Johnny Meyer, Director of Strategic Partnerships for
Ametros, a Boston-based company whose mission is to help parties manage their health care challenges more practically, believes too many people involved in the claims resolution process end up paying more than they need to for medical and support care.
"Clients can more accurately determine the cost of their life care plan when settling a personal injury or workers' compensation claim simply by applying the negotiated discounts our company can obtain for the cost of care, medicine, and durable medical equipment," says Meyer.
"For those charged with negotiating these settlements, the net effect of this process is an outcome that meets the agreed needs delineated in the life care plan while leaving more settlement dollars available for other negotiation purposes."
Add to this the ability to finance these reduced costs more cost-effectively by utilizing a structured settlement where a rated age has been procured, even further savings can be realized.
Definition: A rated age is the actuarial age, as opposed to the chronological
age, of an individual when certain medical conditions are factored into
a life insurance company’s calculation of providing lifetime income.
Case Study
"John Doe," aged 60, was injured in an automobile collision in 2015 resulting in a traumatic brain injury and remains cognitively and behaviorally impaired. He requires 24-hour attendant care while living at home with his wife and kids; however, doctors note he may eventually need to reside in a residential brain-injury facility.
The parties negotiating a bodily injury lawsuit agree to accept the care outlined in the high range of Mr. Doe's life care plan - a projected $5.4 million at a rate of $214,986.00 annually for life.
So, how much did it cost to satisfy the care specified by the life care planner? Let's find out.
Step 1: Case submitted to Ametros for
CareGuard discount pricing review.
Result: Cost reduced by $910,169.
Step 2: Case submitted for a rated age structured settlement annuity quote.
Result: Cost reduced by $1,945,388.
