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A Powerful Tool: The Medical Cost Projection
It is beneficial to have some background on how we arrived at the point where the Medical Cost Projection became a reporting staple for many industries, both directly and indirectly impacted by the rising cost of healthcare in the United States. Getzen (2016) noted that the Medical Cost Projection rose to prominence in addressing actuarial needs as early as 1986. This is when the United States began to use projections of future medical spending. Medicare and Medicaid programs were mandated. Although today’s focus on Certified Medical Cost Projection Specialist™ (CMCPS®) can vary by situation and industry, it is a valuable tool in many professionals’ toolkits for planning and budgeting in their respective fields. A self-insured employer may need a Certified Medical Cost Projection Specialist™ (CMCPS®) to estimate medical costs associated with workplace injuries for reserve-setting purposes. An individual with a chronic illness may need to complete a Medical Cost Projection to budget personal medical expenses. A law firm representing clients in the product liability arena may require a Medical Cost Projection to help estimate settlement costs. Hospitals and clinics use cost projections for resource allocation, and rehabilitation centers rely on them to estimate costs for recovery plans or when therapy is protracted. We cannot forget the government and public sector, such as Medicaid and Medicare, as well as the Veterans Affairs, which use projections to budget and plan policy. Whatever the budgeting and cost-projection needs, the Certified Medical Cost Projection Specialist™ (CMCPS®) is — and should be—a powerful professional for the job.
According to the Centers for Medicare & Medicaid (CMS Financial Report 2024), US health costs are primarily comprised of health insurance premiums, hospital and physician services, prescription drugs, clinical services, personal healthcare expenditures, and out-of-pocket costs, such as copays, deductibles, and coinsurance. This is no surprise to those of us working in a related industry. In the ever-evolving healthcare landscape, its impact on healthcare utilization, insurance coverage rates, and economic conditions may be significant. The most recent calculation of healthcare spending per capita was $16,570 in 2024, with an estimated per capita spending of $24,200 by 2033. Per capita healthcare spending is expected to grow by 6.2%. Sadly, health care spending growth outpaced GDP growth for the first time in 2023. The good news is that per capita spending is expected to slow in 2026 and 2027 to 4.7% and 5.2% respectively (CMS Financial Report 2024). This was in part due to the COVID-19 pandemic; many of us had to delay our healthcare services during the pandemic, and demand for them surged when we finally returned after the emergency ended. It is evident that healthcare spending increased significantly as utilization increased, more people became insured, and inflation continued. In 2024, Medicare and Medicaid spending grew by 8.1% and 5.5%, respectively. These two programs alone accounted for 21% of the total National Health Expenditure (NHE) (National Health Expenditure Data, n.d.). By 2032, healthcare spending is expected to total $7.7 trillion, accounting for 19.7% of the total US GDP. There is no question that the medical cost projection will be an integral part of addressing the sustainability of all things healthcare, including budgeting, policy decision-making at the corporate and governmental levels, and the allocation of those resources.
The role of the Certified Medical Cost Projection Specialist™ is to project medical costs. Actually, this simplification lacks depth and purpose and does not provide the reader with a satisfactory understanding of MCP’s scope. Stating the obvious minimizes the report’s importance. The Certified Medical Cost Projection Specialist™ (CMCPS®) is much more than a projection of medical costs; it is also a process. According to the International Commission on Health Care Certification™ (ICHCC®), “the Medical Cost Projection is the process of reviewing records to determine the future cost of medical services.” Furthermore, “the Certified Medical Cost Projection Specialist™ writes a condensed, simplified, abstract document that provides an estimate of items and services that a person with an adventitious disability will, in all probability, require.” (ICHCC®, 2025, p.14). In short, a review of what has transpired in reference to medical care and related services is designed to estimate costs over a period of time, typically from one year to life expectancy. You may have many questions about how to approach the “process.” Understandably, the approach can vary based on the report’s purpose, the severity of the injuries or illness, and the information provided for review. The Certified Medical Cost Projection Specialist™ (CMCPS®) must be completed in accordance with established ethical standards and should rely on recognized practice guidelines and standards. The Medical Cost Projection should focus on the principles of fairness, respect, confidentiality, and where applicable to the assignment, informed consent. The report and the specialist must remain free from any conflicts of interest to ensure objectivity and impartiality. The reader is encouraged to visit https://www.ichcc.org for more detailed information on these standards and guidelines.
The Certified Medical Cost Projection Specialist™ (CMCPS®) can be used to assist in settlement negotiations or to help set or identify misallocated reserves, a critical component of an insurance company’s financial health and stability. The Medical Cost Projection is often overlooked as a tool that can help augment effective risk management strategies. It can serve as a general budgeting tool to help organizations and individuals plan and allocate resources for the future. It is used by a variety of professionals, including those in the insurance, legal, healthcare, and product liability industries, as well as individuals who want to manage their own healthcare finances. The flexibility of the Medical Cost Projection makes it a powerful tool. The projection can focus on a single item, such as medication costs, durable medical equipment, or surgical and procedural costs, or it can encompass all medical treatment, services, and ancillary costs required for individuals with chronic illnesses, injuries, and disabilities over a designated time period. In my own work, I typically include costs for physician visits, laboratory testing, diagnostic testing, medication, emergency room visits, equipment, surgery, therapy, injections, home care attendant care, and a section for miscellaneous costs (Payne, 2024). Another advantage of the Medical Cost Projection is that it can be converted into a Life Care Plan at a later date when the individual has reached maximum medical improvement.
Medical Cost Projections are not without limitations, and they are not equivalent to Life Care Plans. Although they are often referred to as “LCP Light,” this is not an accurate moniker for the Medical Cost Projection. The Certified Medical Cost Projection Specialist™ (CMCPS®) is a snapshot in time, and the Life Care Plan is generally completed at the end of the treatment. The Medical Cost Projection does not require a personal visit with people with disabilities, illnesses, or severe injuries, or with the treatment team. In contrast, the Life Care Plan typically includes these visits. This is one reason the Medical Cost Projection can have a quicker turnaround time and can often be a cost-effective reporting option. The Medical Cost Projection is commonly used for reserve setting, followed by settlement negotiations and then general budgeting. It is often used for less complicated injury cases, such as non-catastrophic injuries, single-body-part injuries, strains and sprains, and fractures with routine healing. However, for the reserve setting, budgeting, and to initiate settlement negotiations, the type of case is generally not a factor in its use. Catastrophic cases often need a Certified Medical Cost Projection Specialist™ (CMCPS®) for reserve setting at the beginning of treatment, with updates as treatment changes and the case evolves.
The Medical Cost Projection often finds its way into legal proceedings, just as most reporting is discoverable for legal purposes. This has created some confusion in the marketplace. Medical Cost Projections are not a substitute for a Life Care Plan; they are a different type of report with their own merit and value. When a Certified Medical Cost Projection Specialist™ prepares a cost projection, the Specialist may be required to educate stakeholders about its uses, strengths, and limitations. The Life Care Plan remains the definitive report for the basis of testimony and litigation; however, a well-written Medical Cost Projection, when used appropriately, can be a valuable and complementary document in legal proceedings. It is incumbent upon the Certified Medical Cost Projection Specialist™ (CMCPS®) to educate his/her audience on the purpose and value of each document to ensure the best outcomes. Something to ponder, I recently saw someone wearing a t-shirt with a picture of a hammer, and the caption next to it read, “This is not a Drill!” A guiding principle when completing a Medical Cost Projection is to understand how each tool in your toolbox is used.
As stated above, the medical cost projection is a process. Although the flow of the process can vary by industry and the specialist preparing the projection, every Medical Cost Projection will, at a minimum, include a comprehensive review of the medical records. The number of records you request may depend on the type of injury or illness; however, the generally accepted request would be for the last 1-3 years of records. The industry standard at this time is 2 years of records; however, requesting more is never an issue. In many cases, a Medical Cost Projection can be completed at any time during the treatment process; 1-3 years may represent the entire available record.
It is beneficial to obtain the corresponding billing/invoices, pharmacy records, and payment history, as they can be valuable sources of pricing information. The process will include a review of the standards of practice and care for the specific injury and illness, and often requires additional research for those diagnoses that the specialist may not be well-versed in or informed about.
It is essential to research credible, reliable sources, such as those widely accepted in the industry, including the Mayo Clinic, Johns Hopkins, Cleveland Clinic, MedlinePlus, Health.gov, Merck Manuals, National Institutes of Health, and WebMD, among others. By using reliable medical information and research, you ensure your reporting is well documented and supported by credible evidence. Remember, the Certified Medical Cost Projection Specialist™ is not the treating physician, and even if the Certified Medical Cost Projection Specialist™ is a physician or a professional with expert knowledge in the medical/healthcare field, the Certified Medical Cost Projection Specialist™ has not treated or examined the individual. The specialist must not operate outside of the area of expertise/purview. Imagine the specialist is completing a Medical Cost Projection and is not the treating physician. The area of expertise is that of a Certified Medical Cost Projection Specialist™, not a physician. This is not to say the specialist cannot offer a professional opinion; however, just because the specialist disagrees with a physician’s recommendation does not mean the specialist can insert the specialist’s own recommendations instead. The specialist must remain objective and non-biased.
A cost-estimating and pricing component will always be included in the Medical Cost Projection, as this is the report’s primary focus. The pricing of the Medical Cost Projection can depend on a referral source’s request or on a corporate policy that dictates the process. Generally speaking, many Medical Cost Projections are priced using a workers’ compensation fee schedule when the assignment is for reserve setting. The adjuster or claims specialist needs to know what “they” are paying so reserves can be allocated. A Usual & Customary pricing is used at the 80th percentile for those states that do not have a Workers’ Compensation Fee Schedule. However, a percentile above 80% may also be requested. Retail pricing is often requested for settlement negotiations. However, it is not unheard of for the referral source to request the Workers’ Compensation Fee Schedule, even during settlement negotiations, to understand what they are paying and adjust it for settlement purposes. The pricing of the Medical Cost Projection will be confirmed with the referral source at the beginning of the process.
There are many resources available for obtaining pricing, including online pricing programs (Medata, Strataware, Micromedex) and the billing information provided to you at the time of referral, which may include payment histories, invoices, and quotes. Pricing from retail sources can be found at specific websites (www.goodrx.com, www.walmart.com, www.vitalitymedical.com, etc.). It is recommended that, when using online resources, the reader should try to be region-specific. Although there are many choices and many items than can be purchased online, be mindful of the individual’s location. Costco may offer the best price on a supplement, but it is a membership club, and there are costs for individuals to access the store. There may not be a Costco close to the area where the individual resides.
The Medical Cost Projection report format generally contains a narrative and a pricing spreadsheet. Some formats will also include a recommendation page that identifies potential cost-saving measures, potential complications, and other issues that remain unresolved. The report format will vary significantly depending on the industry and the specialist; however, it should be well-written and well-formatted. It should be free from grammatical errors, mathematical errors, and jargon. The Certified Medical Cost Projection Specialist™ (CMCPS®) should consider the audience when writing the Medical Cost Projection. Many professions may utilize the same report. From lawyers to medical professionals and the claimant, all will have access to the report. The Certified Medical Cost Projection Specialist™ (CMCPS®) should not assume everyone is well-versed or understands the process. As with any well-written report, your primary focus should be to educate and inform the reader. The report should answer the key questions and leave the reader without a myriad of new concerns or additional questions. Remember, clarity is the objective, not confusion. If the specialist has defined the report’s purpose, understands the audience, and has presented a clear framework for the report, he or she has completed three of the major components of the Medical Cost Projection.
It is preferred that a Certified Medical Cost Projection Specialist™ (CMCPS®) is your first choice for completing a Medical Cost Projection. For example, expertise and knowledge are important facets in completing specialized tasks. Therefore, a Certified Medical Cost Projection Specialist™ (CMCPS®) has validated a level of professional expertise by participating in rigorous specialized training in their respective field. They have demonstrated their commitment to advancing their knowledge, cultivating excellence, and striving for self-improvement. They have demonstrated a dedication to professionalism and higher performance standards. A Certified Medical Cost Projection Specialist™ (CMCPS®) has verifiable competence, is held to a code of ethics and professional conduct by the certifying body, and is often required to meet continuing education requirements to maintain their certification. There will be professional oversight and accountability beyond the specialist. According to the ICHCC®, to become a Certified Medical Cost Projection Specialist™ (CMCPS®), one must complete a 45-hour approved training course and provide a sample medical cost projection for peer review. Once the sample is approved, they must sit for a proctored examination. A CMCPS® must renew their certification every three years and is required to provide proof of fifteen continuing education units over the certification period, with at least five units in the subject matter of ethical practice (ICHCC®, 2025). For more information on certification, please visit www.ichcc.org.
We cannot discuss the process of Medical Cost Projection without addressing Artificial Intelligence (AI). AI will undoubtedly impact the healthcare industry, presenting this field with a host of new challenges and concerns. AI will enhance our skills, and the healthcare industry as a whole will also be significantly and meaningfully impacted. As we discussed earlier, the process and implementation of medical cost projection require an ethical and responsible approach. The implementation of AI is no different, but it is much more complex. When we think of AI, we likely think of technologies such as robotics, machine learning (ML), and natural language processing (NLP), a subfield of AI that enables machines to understand, interpret, and generate human language in meaningful ways (GeeksforGeeks, 2025). Some of us think of AI as ChatGPT, as this may be the only direct connection to AI we have had. However, AI will be much more than a recipe for your favorite cookie, help with sentence structure, or a marketing idea. AI will transform the healthcare industry. AI will boost productivity, improve the quality of care, and help manage healthcare costs. In the coming weeks and years, AI will be subject to greater scrutiny, and additional regulatory frameworks will naturally develop to safeguard sensitive patient information and ensure the integrity of vast amounts of data.
Many healthcare practitioners may be wondering whether AI will eliminate the need for humans in many fields of healthcare practice, and Medical Cost Projection is one of them. This is a valid concern, and my personal opinion is “No” for the following reasons: AI is not without limitations, at least as we currently conceptualize it. AI has drawbacks (Editors of ScienceNewsToday, 2025). The more obvious issues are errors and biased data, privacy concerns, an overreliance on technology, and, of course, job loss due to automation. AI is not adept at nuanced human judgment. Every Medical Cost Projection is unique. AI will be valuable, of course, but it relies on identifying patterns and tendencies. We all know human actions come with an element of surprise. Likewise, treatment outcomes are not always predictable, and one of AI’s hidden vulnerabilities is its reliance on stable conditions (Shojaie, 2024). There is no guarantee that the treatment for one individual will garner the same results for another. AI does not consider individual variables, unique circumstances, or unforeseen events (Santamato et al., 2024). AI can provide insight and identify patterns and trends, but it cannot be relied upon as a definitive predictor of treatment outcomes. Therefore, AI can be programmed to prioritize certain types of data over others; however, the AI system’s specific goals influence its decisions and the resulting output (Santamato et al., 2024). In my opinion, and current research supports this, AI’s approach limits exposure to diverse perspectives (Nosta, 2025). Humans and AI can make better decisions when they collaborate (Santamato et al., 2024). In short, AI needs us.
Benjamin Franklin once said, “…in this world, nothing is certain except death and taxes…” (National Constitution Center, n.d.). I would add, “and the evolution of medical cost reporting.” The certainty of real-time cost transparency, advances in price-comparison tools, predictive modeling, outcome-linked reporting, and regulatory and policy shifts will undoubtedly have a significant impact on how Medical Cost Projections are conducted. The entire presentation and process will undergo significant changes. The providers, payers, and patients will all be impacted as organizations adjust their operations and face increased performance pressures. Payers will be expected to make data-driven decisions, which will require advanced analytics/systems to forecast costs, streamline processes, and detect fraud and waste. Patients will be provided with more detailed information, much of which will be difficult for them to interpret, requiring additional patient education and support.
As a final exercise for this article, I posed a question to ChatGPT. My question is, “How to face uncertainty?” Interestingly, I found one of the strategies for doing so was uniquely human. AI stated that the answer was to build emotional resilience through practicing mindfulness and limiting catastrophic thinking (OpenAI, 2025). My conclusion was that even AI must rely on human ability to function. AI is not beyond giving you an answer that it cannot perform for itself.
The future is now. As we grapple with rising healthcare costs versus the ethical and logistical complexities of AI, we find ourselves at a crossroads of two enormous and evolving frontiers. How the Medical Cost Projection will evolve and change, and how we respond, is yet to be determined, but suffice it to say, there is much more to come.
Author Note
Correspondence concerning this article should be addressed to Reva Payne, CorMed Reporting, LLC, P.O. Box 231, Divide, Colorado 80814. Email: revapay@msn.com.
Conflicts of Interest
I do not have any conflicts of interests to disclose.