When developing a life care plan, accurately projecting future costs is critical. But what does it really cost? In today’s medical-legal landscape, life care plan costing requires far more than pulling estimates from outdated sources. It demands a deep understanding of healthcare pricing, coding systems, and the nuanced cost methods life care planners rely on to ensure accuracy and defensibility.
This blog outlines how experienced life care planners forecast medical and rehabilitation expenses, why methodology matters, and what tools are used to ensure the final numbers hold up to scrutiny.
The Foundation: Life Care Plans vs. Medical Cost Projections
Understanding the difference between these two tools is critical:
• Life Care Plans are comprehensive documents that project an individual’s ongoing and future medical needs over their lifetime. They include clinical rationale for each service recommended.
• Medical Cost Projections are narrower in scope, typically used for short-term needs or early case evaluation. These do not require the same level of clinical justification.
Both tools support case valuation and settlement discussions, but they serve different strategic purposes.
Why Methodology Matters in Cost Estimation
The credibility of any life care plan costing estimate hinges on how the data was gathered. Qualified professionals use a range of life care planner cost methods, including:
• National Databases – Provide standardized pricing but may miss local variations.
• Hospital Charge Masters – Useful for line-item charges but should be used carefully (prefer charge rates over payer rates).
• Direct Provider Calls – Offer real-time local pricing but require accurate CPT codes and procedure knowledge.
• Internet Research – Often used for DME pricing, though data quality can vary.
• VA Fee Schedules – Reliable, federally published data that requires interpretation based on region and service type.
Using multiple sources helps validate findings, reduce outliers, and improve accuracy.
Understanding Medical Charges: It's More Than Just One Price
Hospital charges aren’t one-size-fits-all. For example, a lumbar MRI may involve:
• Facility Fee (technical component)
• Provider Fee (professional component)
These must be combined to reflect the true cost. Additionally, hospital billing may use CPT codes (for individual services) and DRG codes (for inpatient bundles). Knowing when and how to apply each is essential.
Why You Should Avoid Discounted or Reimbursed Rates
Many professionals make the mistake of using insurance reimbursement rates in cost planning. This is inappropriate in legal contexts because:
• Individuals may lose access to private or public insurance post settlement.
• Medicaid is need-based and may become unavailable.
• Self-pay rates are variable and not guaranteed.
Legal and clinical experts always rely on full charge rates to ensure accuracy and defensibility.
Navigating VA Fee Schedules: A Case Example
To cost a lumbar x-ray through the VA:
- Identify the CPT code (e.g., 72100).
- Use Table F to get the base value.
- Apply the geographic adjustment (e.g., 0.73 for Boston).
- Add physician professional fees.
- Convert relative value units (RVUs) to actual cost.
This process highlights the complexity — and the need for trained experts in cost research and coding.
Best Practices for Internet and Phone Research
When using internet searches:
• Compare “apples to apples” in DME pricing.
• Account for shipping costs.
• Confirm international availability for global cases.
For phone-based research:
• Know the right billing codes.
• Get cost estimates directly from provider offices.
• Use past bills cautiously — only for determining frequency, not actual pricing.
Why Expertise is Non-Negotiable
Forecasting future medical costs is not a DIY task. Here’s why:
• Each medical service has its own inflation rate.
• Experts such as Economists are needed to calculate present value and project inflation-adjusted future costs.
• Incorrect coding or cost assumptions can lead to inadmissible or misleading conclusions.
As one presenter noted, “You could try, but it may not stand up if it has to go to court.”
Qualifications to Look for in a Costing Expert
Not all experts are created equal. The ideal professional should have:
• A medical background (e.g., nursing or physician).
• Training in medical coding and billing.
• Access to and experience with multiple pricing resources.
• Collaboration with Economists for valuation and inflation modeling.
Nurses, in particular, are uniquely positioned due to their broad understanding of the continuum of care and patient needs over time.
Final Takeaway: Costing is a Strategic, Expert-Driven Process
The bottom line? Whether developing a life care plan or medical cost projection, rely on qualified professionals who use multiple, validated sources and understand the nuances of medical coding, billing, and future care needs.
At Medical and Life Care Consulting Services, our experienced team of nurse life care planners and rehabilitation experts brings clinical expertise and methodological precision to every case. We collaborate with economists, use national and local databases, and conduct thorough research — so you get reliable, defensible cost estimates.
Ready to learn more about our Life Care Planning or Medical Cost Projection services?
Contact us today or visit our Life Care Planning or Medical Cost Projections service pages.
