Life care plans are commonly prepared for litigation to prove future damages in personal injury cases that involve a catastrophic injury. Medical cost projections are a routine part of life care planning. Medical cost projections can also be useful for trust administrators who need to project future care expenses for a trust beneficiary, for insurance companies that need to set reserves for claims involving the payment of anticipated expenses, to determine Medicare set-asides in workers’ compensation cases, to guide estate plans, and for other purposes that require the projection of expenses for future healthcare.
Medical cost projections are often prepared as a separate document when a full life care is not required. In situations that do not involve litigation, a medical cost projection may be all that a client needs. A standalone medical cost projection is a less comprehensive document than a life care plan and is usually insufficient for lawyers who are seeking future damages for a catastrophic injury victim. However, life care planners may rely on cost projections prepared by a medical billing expert when they prepare a life care plan.
Life Care Plans Versus Medical Cost Projections
Life care plans identify the current and future needs of individuals who have been impaired by a catastrophic injury or a chronic health condition. Those needs generally include medical care, including monitoring a health condition, performing diagnostic testing, prescribing medications, and performing future surgeries. Other medical services that may be necessary in the future include physical therapy and (particularly when an accident victim has a traumatic brain injury) psychological or psychiatric treatment.
Some future needs are not necessarily “medical” in nature. A life care plan might be combined with or accompanied by a vocational assessment that considers future employability and the impact of injuries on future earning capacity. When the client is capable of working, a life care plan will consider the cost of vocational rehabilitation to maximize the client’s independence. Helpers who are hired to clean a home, maintain a lawn, prepare meals, and perform other tasks that an injury victim can no longer accomplish generally provide no medical services.
Other needs might be filled by people who have some medical training, even if they are not providing medical treatment. A caregiver who assists with the tasks of daily living (such as eating, bathing, and getting dressed) might be trained in certain nursing skills, including managing and administering medication, treating bedsores, and operating home-based medical equipment.
In some cases, a disabled individual might need care that is best provided in an institution. Some individuals might need the full-time nursing care that is offered by a nursing home. Others might be better suited for an assisted living facility, where care focuses on assistance with the activities of daily living and occasional health monitoring or treatment by skilled nurses. A specialized facility might be appropriate for individuals who suffer from traumatic brain injuries or dementia.
Catastrophic injury victims with impaired mobility who can live independently (with or without caretaker assistance) will likely need to use specialized transportation services or acquire a wheelchair-accessible van. They may need to add ramps and chair lifts, widen entrances, and lower counters to make an existing home usable. The costs of adapting or acquiring property so that injury victims can live independently are documented in a lifecare plan.
Life care plans take account of all future expenses that are necessary to cope with a disability, not just medical expenses. However, future medical expenses are a key component of life care plans.
Future Medical Cost Projections
Projecting future medical costs begins with a comprehensive review of medical records. The review should include not just a physician’s examination or discharge notes, but also nurse’s notes, laboratory and diagnostic test results, emergency records, ambulance reports, and physician’s orders.
The expert may or may not need to speak to the disabled individual. That interview is essential when preparing a life care plan but may not be necessary when preparing a future medical cost projection. It may, however, be necessary to interview treatment providers to develop a full understanding of a client’s future medical needs, including members of the therapeutic team who participate in developing the individual’s treatment plan.
After identifying all future treatment needs that are either certain or likely, a medical billing expert researches the cost of meeting those needs. Since costs vary from place to place, experts must consult databases that record the actual costs physicians have charged for the identified services within the client’s zip code. Experts may need to supplement that data with their own research when the database is inadequate.
Medical billing experts use other standardized references, in addition to catalogs and online searches of medical supply companies, to obtain the costs of wheelchairs and other needed medical equipment. Research studies help experts understand the durability of medical products and the frequency with which they will need to be replaced.
Common Categories of Future Medical Expenses
Every case is different. Future medical costs can only be determined by assessing the particular needs of an individual, as those needs are evidenced by medical records, physicians, care providers, and references that define the standard of care for particular disabilities. Depending on the disabled individual’s needs, future medical costs might include:
Cost of monitoring and treatment, including:
- CT scans
- Office visits and examinations
- Psychiatric evaluations
- Neuropsychological testing
- Audiology examinations
- Vision screening
- Swallow studies
- Physical therapy
- Speech therapy
- Home-based medical equipment
Cost of Future Surgeries, including:
- Procedures that a physician knows will be necessary
- Procedures that are likely to be necessary
- Procedures that could become necessary
- Replacement of medical devices due to ordinary wear and tear
- Rehabilitation procedures to recover from surgery
Cost projections for future surgeries include:
- Fees charged by surgeons
- Fees charged by anesthesiologists
- Hospital charges, including medical supplies used during the surgery
- Pre-operative examinations
- Post-operative examinations and treatment
Cost of prosthetic and medical devices, including:
- Artificial limbs (initial cost)
- Wheelchairs (initial cost)
- Replacement cost considering patient’s life expectancy
- Wheelchair accessories
- Specialty bed
- Body support equipment
Cost of future medications, including:
- Pain management medications
- Prescription drugs
- Nonprescription drugs
- Skin care products
Cost of assistants, including
- Case management services
- Home health services
Cost of institutionalized care, including
- Nursing home care
- Assisted living care
This list is illustrative, not comprehensive. Medical billing experts consider costs for all identified services that a disabled individual will likely need in the future when they prepare a medical cost projection.