Awaiting a decision from the U.S. Supreme Court, Federal Communications Commission v. Consumers' Research is poised to potentially redefine federal administrative agencies' authority scope. This shift could flow into various regulatory processes, including the Workers' Compensation Medicare Set Aside Agreements (WCMSAs) adjudication.
While not directly addressing WCMSAs, the case's focus on the nondelegation doctrine and the permissible extent of delegation to private entities could create ripples throughout the administrative state, inviting challenges to existing agency functions.
At the heart of FCC v. Consumers' Research are fundamental questions about the separation of powers and the ability of Congress to delegate legislative power to executive branch agencies, as well as the ability of those agencies to further delegate tasks to private contractors. The challengers argue that the Universal Service Fund mechanism, as structured by the FCC and administered in part by a private entity (the Universal Service Administrative Company - USAC), involves unconstitutional delegations of authority. A Supreme Court ruling that significantly strengthens the nondelegation doctrine or limits agencies' ability to utilize private contractors could have far-reaching consequences for any agency process that relies on delegated authority or private entities for implementation.
The adjudication of WCMSAs is a process managed by the Centers for Medicare & Medicaid Services (CMS) to ensure that when a workers' compensation settlement includes funds for future medical treatment, Medicare's interests are protected. This is mandated by the Medicare Secondary Payer (MSP) laws, which generally position Medicare as a secondary payer when other coverage is available.
The CMS review process for WCMSAs involves a private contractor, the Workers' Compensation Review Contractor (WCRC), who initially reviews the submitted proposed set-aside amount based on medical records, treatment guidelines, and data. The WCRC then makes a recommendation to a CMS Regional Office, which issues the final determination on the adequacy of the proposed WCMSA.
The potential impact of FCC v. Consumers' Research on this process stems from two key areas implicated in the Supreme Court case:
Nondelegation Doctrine: If the Supreme Court significantly limits Congress's ability to delegate authority to agencies, it could invite challenges to the scope of CMS's authority under the MSP laws as they relate to WCMSAs. Arguments could be made that the statutory framework provides insufficient "intelligible principles" to guide CMS in establishing and administering the WCMSA review process, particularly concerning the criteria for approval and the determination of adequate set-aside amounts.
Private Nondelegation: The involvement of the WCRC, a private entity, in the initial review and recommendation process for WCMSAs could be challenged as an impermissible delegation of governmental authority. If the Supreme Court in FCC v. Consumers' Research adopts a more stringent view of when and how agencies can delegate responsibilities to private contractors, the current structure of the CMS WCMSA review process could be vulnerable to legal challenges.
A ruling that favors the challengers in FCC v. Consumers' Research could potentially lead to:
Increased Legal Challenges to WCMSAs: Parties to workers' compensation settlements might be more inclined to challenge CMS's authority to require or review WCMSAs, or to challenge the specific determinations made by CMS, arguing that the underlying delegation of power from Congress or the delegation to the private WCRC is unconstitutional.
Changes to the WCMSA Review Process: CMS might be forced to alter its WCMSA review process to address concerns about delegation. This could involve seeking more specific legislative guidance from Congress, reducing the role of the private contractor, or restructuring how determinations are made.
** Uncertainty in Settlements:** Increased legal challenges and potential changes to the review process could create uncertainty for parties seeking to settle workers' compensation cases involving future medical expenses, potentially leading to delays and increased litigation.
The impact is currently potential. The Supreme Court's decision in FCC v. Consumers' Research has not yet been issued, and the extent to which it might alter the nondelegation doctrine or address private delegation remains to be seen. Furthermore, even if the Court's decision sets a precedent that could apply to the WCMSA process, it would likely require specific legal challenges to be brought against CMS on these grounds.
Nevertheless, legal experts and practitioners in administrative law and workers' compensation are closely watching FCC v. Consumers' Research for its potential to reshape the landscape of agency regulation and impact processes like the adjudication of Workers' Compensation Medicare Set Aside Agreements.
ORDER NOW
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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers' Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers' Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.
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