Question: I’ve heard that zero allocations are getting more and more challenging. Please level with me, will Medicare approve a zero allocation in a denied case? If so, what is needed?
Answer: We get this question a lot. For the uninitiated, a “zero allocation” is what we call not setting money aside to pay for a claimant’s post-settlement Medicare-covered medical needs. A zero allocation is possible in two situations. First, money would not need to be set aside if a claimant requires no future medical treatment associated with the workers’ compensation injury. If the claimant is not getting treatment, then no money should be set aside and Medicare will approve these zero allocations on a medical basis. These are often referred to as “medical zero” allocations. The second, and far trickier, zero allocation is what we often refer to as “legal zero” allocations. A legal zero allocation occurs when the parties designate zero dollars for future medical care because the employer has denied the case in its entirety and is not responsible for the claimant’s medical treatment. Thus there is no medical treatment to commute as part of the settlement. Legal zero allocations are the focus here given the question posed.
The good news is that as it stands now Medicare still approves legal zero allocations if the cases meet strict guidelines. Evaluation of each potential case is key. We first ask whether a case would qualify for a legal zero allocation based on its facts. Second, if parties plan to exercise their option to submit the case to Medicare, then we evaluate whether it will be approved based on the items available for that submission.
The list of what information Medicare “requires” to approve a legal zero allocation is ever evolving and Medicare can be very detail-oriented in its review of these cases. Some important areas to focus on include:
While it’s good news that Medicare will approve legal zero allocations in denied cases if the parties meet its strict guidelines. Remember this is ever evolving and in November 2016, Medicare briefly modified the requirements for legal zero allocation approvals only to reverse course following an industry outcry. More recently, Medicare representatives have sought assistance crafting updated guidance from the industry with an eye to an eventual cessation of the review of zero allocations altogether. We, of course, monitor this carefully and will provide any updates if changes occur.
ExamWorks Compliance Solutions’ track record of approvals on legal zero allocations speaks for itself. Our team of compliance attorneys review each legal zero allocation referral to ensure it meets Medicare’s stringent criteria. Those same attorneys contribute specific language to the allocation report itself based on the facts of the claim, and then perform a final signoff review after our submissions team has gathered and assembled everything necessary to submit. Do send us legal zero allocation referrals so they can be scrutinized and shepherded by our experts through the process for ultimate Medicare approval.