Congress Told CMS Must Continue to Stop Work Comp Cost Shifting

At a House Oversight hearing today it was revealed that over the last decade the Centers for Medicare and Medicaid Service (CMS) has obtained over $50 Billion in reimbursement under the Medicare Secondary Payer Act (MSP). CMS has worked diligently to stop cost shifting from workers' compensation insurance carriers to the US taxpayer. 

Deborah Taylor, Chief Financial Officer and Director, Office of Financial Management Centers for Medicare and Medicaid Services, stated, "Any restrictions on existing MSP rights or recovery processes would adversely affect savings that would otherwise accrue to the Medicare Trust Funds through MSP recovery activities, as well as the $1 billion per year in cost-avoided savings that CMS is able to track. Proposals that would impose mandatory process changes may affect Medicare’s status as a secondary payer or its priority right of recovery, as well as CMS’ ability to prioritize its own workload. These changes may also have the unintended effect of undercutting the underlying intent of the statute, increasing costs, and reducing existing savings. " 

Ms. Taylor concluded by stating that, "...CMS is committed to a transparent MSP process that ensures that beneficiaries receive the care they need, while reducing Medicare payments for claims that are the legal responsibility of a group health plan, NGHP, or other responsible party. We understand that the MSP process can present challenges to all involved in coordination of benefits between Medicare and other payers. We are committed to maintaining a strong line of communication with beneficiaries, insurance and workers’ compensation plans, and other stakeholders on MSP policy in general, as well as the new Section 111 reporting requirements. Additionally, we will look to expand and strengthen our training and education opportunities where possible. CMS looks forward to working with our partners and beneficiaries in the future to preserve the integrity of the Medicare program and secure the Medicare Trust Funds for future generations. We look forward to working with Congress as well on these important goals."

Related Resources

• Medicare Secondary Payer: Process for Situations Involving Non-Group Health Plans, US GAO Study James C. Cosgrove, Director, Health Care - 6.22.11 

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Court Permits Deduction of Procurement Costs From Medicare Set-Aside in Liability Claim

Following the guidelines of the CMS Management Memo entitled "Medicare Secondary Payer - Workers Compensation (WC) Information" dated May 7, 2004, and the interpretation of 42 CFR 411.37, a NJ Court granted an attorney the deduction of procurement costs from a Medicare Set-Aside Trust.

"This court's decision to apply 42 C.F.R. § 411.37 to funds obtained in a civil action and placed in a Medicare set aside is also in line with general principles of equity. Where a plaintiff is, or will within a short time become, a Medicare recipient, the plaintiff's attorney also works on behalf of Medicare to secure funds to pay future medical expenses Medicare would otherwise pay. To allow Medicare to avoid paying an equitable share of the procurement fees for a judgment or settlement amount, forcing the plaintiff to cover all the fees, would be unfair to plaintiffs. In some situations, a plaintiff may end up getting nothing after creating the set aside and paying attorneys' fees or may even have to pay money out of pocket to his attorney after a lengthy trial. Such a result would not only be inequitable, it would deter persons on Medicare who are injured by the tortious acts of others from bringing claims."

Hinsinger v. Showboat Atlantic City, L-3460-07, 2011 WL 1885980 (NJ Super Law Division 2011), decided May 19, 2011.

For over 3 decades the Law Offices of Jon L. Gelman  1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

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Industry Coalition Wants to Cut CMS Conditional Payments

A group of about 50 employers, insurance carriers and vendors have formed a coalition to endorse legislation  (H.R.1063) introduced this week that would ease reporting requirements and reimbursement procedures of the Centers for Medicare and Medicaid (CMS). The organization, the Medicare Advocacy Recovery Group [MARC],  contends that the proposed legislation will:

• "Empowering Medicare to provide settling parties with the amount of their MSP repayment obligation during the settlement process, will allow taxpayers to settle quicker, and repay the Medicare Trust Fund faster.
• "MSP Reform will provide a more affordable and less intrusive MSP system that protects beneficiaries and the Medicare Trust Fund, but does not waste limited judicial and other resources or needlessly confuse parties trying to settle a claim resulting from an injury to a beneficiary. 
• "MSP Reform will also eliminate the required use of Social Security Numbers (SSNs) and Health Insurance Claim Numbers (HICNs) in the reporting process, create a basic right of appeal for all parties to resolve a CMS MSP determination, clarify the statute of limitations, and require the CMS Actuary to determine a threshold below which the recoveries are so small it makes no sense to apply the complex MSP laws. 

Theoretically it sounds like the change would create a more efficient system to establish: time limits for claim reimbursement; a statute of limitations for liability (3 years); an avenue for redress directly to the judicial system; and a threshold amount for reimbursement. However, the proposal would actually defeat the basic philosophy of the workers' compensation act. 

The convoluted logic of the employer/insurance group just makes no sense. It is like saying that I didn't bother buying enough postage on a timely basis so I will just mail my letter at half-price. The universal legislative intent of workers' compensation act mandates that the employer is responsible for medical care of its injured workers. The insurance industry has tried other gimmicks  before to continue its long history of cost shifting, and those have rightly failed as Congress wouldn't buy into them.

While employers and insurance carriers delay and deny compensation benefits, shifting the cost to the taxpayers through depletion of the Medicare system, is both offensive and repugnant. If the coalition wants to ride the carousel of "it's not how long, but how much," in doling out benefits, then they should not blame CMS for delays and penalties, caused by the coalition's own failure to report on a timely basis in the first place.

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Court Grants Motion to Reconsider Statute of Limitations in CMS Case

In order to avoid any "maifest injustice," the Court that had previously dismissed the Government's case against insurance companies and lawyers for failure to reimburse the Centers for Medicare and Medicaid Services (CMS), has granted a motion to reconsider under the plaintiff's accrual theory.

"As its fourth ground for reconsideration, Plaintiff argues that the court erred in concluding that the Government inadequately raised a theory of continuing accrual against all defendants concerning the annual $2.5 million payments from 2004 through 2014 contemplated in the Abernathy Settlement Agreement. Admittedly, Plaintiff did not address this theory in its responsive briefing to the Defendants’ motions to dismiss. At the September 13, 2010 hearing, the court granted verbal leave for Plaintiff to submit a motion to amend its complaint to more clearly articulate a claim on this issue. For whatever reason, Plaintiff has failed to do so, but argues in its motion to reconsider that it properly pled a theory of continuing accrual in its First Amended Complaint and raised it at the hearing. Though this theory should have been raised and argued in Plaintiff’s brief in response to the multiple motions to dismiss filed by Defendants, the court will allow Defendants an opportunity to respond in full to this issue to avoid any possible clear error. Therefore, the court GRANTS Plaintiff’s motion to reconsider as to the issue raised in part D regarding a continuing accrual theory and ORDERS that Defendants have until Tuesday, November 16, 2010 to respond as to whether the allegations pled in Plaintiff’s First Amended Complaint are sufficient to state a claim for a theory of continuing accrual; and if so, whether the court committed clear error in dismissing Count VI of Plaintiff’s First Amended Complaint.

"Finally, the court RESERVES RULING as to the tolling issue raised in part E of Plaintiff’s motion to reconsider. To avoid any possible clear error and/or manifest injustice, the court will allow Defendants until Tuesday, November 16, 2010 to respond as to: 1) whether the court should reconsider the issue of tolling; and 2) if the court does, whether it committed clear error in application of the appropriate burden of raising or pleading tolling in this context and in granting the motion to dismiss before discovery had yet occurred.

USA v James J. Strickler, et al CV 09=BE-2423-E

For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900  jon@gelmans.com have been representing injured workers and their families who have suffered work related accident and injuries.

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CMS Claims No Statute of Limitations May Exist in a Recovery Action

The Centers for Medicare and Medicaid Services (CMS) have filed a reply brief in US v Strickler, et al, now pending in the US District Court in Alabama, alleging that the government’s recovery action was valid and filed within the six years Statute of Limitations. “The answer is clear: the United States’ claim, which seeks reimbursement based on a statutory right to recover monies conditionally paid by Medicare, is contractual and implied in law. Therefore, the six-year limitations period applies.”

The government states that the question for the question is whether the recovery action falls within a contract express or implied in law or fact, which subjects the United States to the six-year limitations period in § 2415(a), or in tort where a 3 year statute would apply.

Alternatively the government advances the proposition that if the could determines that none of the above categories apply then no statute of limitations would apply. “As noted in the United States’ Omnibus Response (at 20 n.10), if the Court were to decide that this claim falls into none of these categories, then no limitations period applies. See, e.g., United States v. Palm Beach Gardens, 635 F.2d 337, 341 (5th Cir. 1981) (holding that cause of action under the Hill-Burton Act was neither tort nor contract, and therefore the United States could pursue its cause of action at any time).”

Should the six year statitute apply, this it would accrue when, “…MSP claims accrue when the United States can “demonstrate” that a primary plan, or an entity that received money from a primary plan, was “required or responsible” to make payments under a primary plan. 42 U.S.C.§ 1395y(b)(2)(B)(ii) and (iii); see also Glover v. Liggett Group, Inc., 459 F.3d 1304, 1309 (11th Cir. 2006) (noting that defendants have no obligation to reimburse Medicare until the defendants’ responsibility to pay a beneficiary’s expenses has been demonstrated).”

Complaint: The United States of America v James J. Sticker, et al. Docket 1:09-cv-02423, filed 12.02.2009

Click here to read more about Medicare Secondary Payer Act and workers' compensation.

Medicare Secondary Payer Recovery Contractor Town Hall Meeting 4/29/10

Changes in the MSPRC Conditional Payment Process for Liability Insurance, No-Fault Insurance, and Workers' Compensation Cases


On April 29, 2010 from 1:00pm – 3:00pm (EDT), the MSPRC will host a Town Hall Meeting regarding
"Changes in the MSPRC Conditional Payment Process for Liability Insurance, No-Fault Insurance, and Workers' Compensation Cases."
This Town Hall Meeting will provide education on the New Conditional Payment Notice and Process, as well as updates on:

• The MSPRC Recovery Process & Timelines
• The Rights and Responsibilities Letter
• Proof of Representation vs. Consent to Release
• What's new with the MSPRC

Space is limited, to reserve your Webinar seat now : Click Here!

https://www1.gotomeeting.com/register/164660640


REMINDER: As space is limited, if more than one person from your organization is participating, we encourage you to convene in one conference or meeting room.


Click here to read more about Medicare Secondary Payer Act and workers' compensation.

Case Advances Challenging MSP Reimbursement Procedures

A Federal Court Judge has permitted discovery to go forward in a potential class action challenging the reimbursement procedures of the U.S. Department of Health and Human Services (HHS) being utilized under the authority of the Medicare Secondary Payer Act (MSP).

The case pending in Arizona questions the authority of the HHS to seek reimbursement in liability claims of conditional payments paid by the Federal government. The plaintiffs are seeking declaratory and injective relief from the HHS procedures. They allege that the HHS has exceeded its authority under the MSP and that the plaintiffs have been denied due process.

The claim challenges the requirement that reimbursement be made within 60, in advance of an appeal or waiver. The case also alleges that the reimbursement claims asserted by HHS are in excess of the actual amount conditionally expended and object to the interest charges on the erroneous amounts asserted.

A motion for class action certification was filed on March4, 2010. Determination of that issue has been held in abeyance as discovery proceeds.

The issues  the Court will determine in this case have been identified as follows:

1.Whether the HHS can require prepayment of an MSP recovery claim before the correct amount is determined through administrative appeal procedures; and

2. Whether the HHS can make plaintiff’s attorneys financially responsible if they do not hold or immediately tender the litigation proceeds.

The Court, in permitting discovery to go forward against the HHS, determined the need to ascertain, not only as to the specific plaintiffs, limited in the Administrative Record, but generally:

·    -----The frequency the appeal process is actually utilized and whether it is burdensome to beneficiaries; and

·    -----The error rate and whether that error rate is extraordinary high in MSP recovery claims; and

·    -----Whether there is a need for current lack of procedural protections for beneficiaries and their attorneys.

Hard v. Sebelius, No. cv 09-134 TUC DCB, 2010 WL 1452932 (D. Ariz), Decided April 12, 1020.

Click here to read more about Medicare Secondary Payer Act and workers' compensation.

Revised CMS Implementation Timetable - Mandatory Reporting

Revised March 29, 2010

Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation (Non-GHP or NGHP):

Medicare Secondary Payer Mandatory Reporting Provisions in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (See 42 U.S.C. 1395y(b)(7)&(b)(8))

Revised Implementation Timeline

Note: “RRE” stands for “responsible reporting entity.” “COBSW” stands for “Coordination of Benefits Secure Web site.” “COBC” stands for CMS’ Medicare “Coordination of Benefits Contractor.”

• 05/01/2009

Electronic registration via the Section 111 COBSW began for all liability insurance (including self- insurance), no-fault insurance and workers’ compensation RREs (NGHP RREs) excluding foreign RREs.

• 07/01/2009

Test and production Query Input Files accepted for NGHP RREs that completed registration and are in a testing status (the RRE’s signed Profile Report has been received by the COBC).

• 01/01/2010 – 12/31/2010

Claim Input File testing period for all NGHP RREs.  

• 04/05/2010

Electronic registration commences via the Section 111 COBSW for foreign NGHP RREs (those that are based in countries outside the United States and have no Internal Revenue Service-assigned tax identification number and/or US mailing address).

• 01/01/2011 – 03/31/2011

All NGHP RREs must submit initial Section 111 Claim Input production files to the COBC according to assigned file submission timeframes for their RRE IDs.

• 04/01/2011

All NGHP RREs must be reporting production Claim Input Files on a quarterly basis by this date.

Click here to rad more about CMS and mandatory reporting and workers' compensation.

Yet Another Attempt to Shift CMS Costs

The American Insurance Association (AIA) and collateral Industry groups have banned together in a formal attempt to avoid the Federal mandate to reimburse Medicare for conditional medical payments. This is yet a third assault on the responsibility of employers to avoid payment of medical treatment of injured workers and shift the burden upon the ailing and financially strapped Medicare. Two prior legislative attempts to modify the Medicare Secondary Payer Act (MSP) have failed.


The proposal is embraced in recently introduced HR4796. It is an attempt to modify the Medicare Secondary Payment Act by reducing conditional payment responsibilities of Industry. 


In the past, failures in the enforcement of reimbursement practices were highlighted in various investigative reports. Since the reporting of those failures, the Centers for Medicare and Medicaid Services (CMS) have enhanced its efforts to seek reimburse. The US Congress has also imposed compulsory employer/insurance carrier reporting requirements.


Recent studies presented at the National Association of Social Insurance (NASI) disclosed that the majority of conditional payment issues arise in occupational claims which traditionally are denied compensability initially by insurance carriers. 


A proposal was made at the NASI meeting to provide more effective and efficient delivery of medical care to injured workers. It was suggested that medical coverage in occupational disease claims  become the initial responsibility of US Medicare system who then could seek indemnification from insurance carriers and others who may be ultimately responsible. A pilot plan for this type of health care was embodied in the US Senate passed health care legislation.


Click here to read more about health care and workers' compensation.

CMS Postpones Production Date for Mandatory Reporting

CMS has postponed first production date until January 1, 2011:
"CMS advises all NGHP RREs that the date for first production NGHP Input Files is changed from April 1, 2010 to January 1, 2011, effective immediately.

• NGHP File data exchange testing will continue.  All NGHP RREs should now be registered with the COBC, and either in or preparing for file testing status.  NGHP file data exchange testing may continue during 2010, as needed.
• All NGHP file data exchange testing will be completed by December 31, 2010.  NGHP RREs that have completed file data exchange testing at any time are encouraged to proceed to production file data exchange status.

During the week of February 22, on this Website CMS will post the next version of the "Section 111 NGHP User Guide" and a number of Alerts relating to particular NGHP policy issues.
Also during the week of February 22, on this Website CMS will post an alert for NGHP RREs describing the steps those RREs can take to assure their ongoing compliance with the Section 111 reporting requirements."


Click here to read more about CMS and workers' compensation.

CMS Sues Lawyers Over MSP Reimbursement

The Secretary of Health and Human Services (HHS) [The Centers for Medicare and Medicaid Services (CMS)] has filed a recovery action in the US District Court in Alabama for recovery of Medicare Secondary Payments (MSP). 

The recovery action is based upon an alleged failure of the attorneys to honor a claim that CMS had filed in an underlying bankruptcy claim filed in 2003. The settlement provided for distributions to be paid from 2004 through 2013 by the defendants.

The complaint alleges that the US may initiate a claim for recovery of Medicare conditional payments when it "learns that payment 'has been or could have be made' under a liability insurance policy of plan. 42 C.F.R. Sec 411,24(b)."

Complaint: The United States of America v James J. Sticker, et al. Docket 1:09-cv-02423, filed 12.02.2009

Click here to read more about Medicare Secondary Payer Act and workers' compensation.

Requesting a CMS Overpayment Waiver For Hardship

In conjunction with the enhancement of Section 111 mandatory reporting,  The Medicare Secondary Payment Contractor (MSPRC) has defined a 13 step process to collect overpayment from beneficiaries. Once post demand correspondence is issued, interest accrues on the overpayment if a full refund is not received within 60 days. If the full refund is not received after 120 days a case is referred to the US Treasury for collection.

In certain situations the beneficiary may have a financial hardship which could reduce or entirely eliminate the repayment request. In such circumstances a waiver request may be made by the beneficiary. The Social Security Administration (SSA) form number SSA-632 must be completed and submitted in a timely fashion. The beneficiary must advise SSA of the factors concerning the alleged hardship and then make a complete financial disclosure to SSA.

To read more about the Medicare Secondary Payer Act and workers' compensation  click here.

A Once-In-A-Generation Chance

The NY Times today called for passage of the Senate version of health care reform and salvage the opportunity for important change in the nation’s health care plan. More emphatically, the Senate version provides an opportunity for change in the way the nation’s century-old workers’ compensation system provides for the delivery of medical care in occupational disease claims.

The paper’s editorial rightly observes that one botched election in Massachusetts, a State that has already met the issue of universal health care, should not encumber the rest of country with horrors of a failed system. The Senate version of health care reform contains an opportunity to experiment and explore the opportunities on embracing the delivery of medical care and medical monitoring into a coordinated and national framework under the Medicare program. In the end it will be able to establish a unified epidemiological database to help prevent and treat occupational illnesses and lead the nation to a safer and healthier work environment.

The efforts of Senator Mat Baucus (D-MT) has made to craft an occupationally health care program has the potential for being the most extensive, effective and innovative system ever enacted for the delivery of medical care to injured workers. Libby Care [see Patient Protection and Affordable Care Act Sec. 10323 pp. 2222-2237] , and its envisioned prodigies, will embrace more exposed workers, diseases and geographical locations than any other program of the past. An ancillary benefit will be the integration of Centers for Medicare and Medicaid Services (CMS) and Centers for Disease Control (CDC) for the advancement of greater worker safety through organized data collection and research.

Caring for those who have been the victims of occupational disease has been an illusive goal of the nation’s patchwork of workers’ compensation systems for over a decade. Occupational diseases were a supplement to the compensation system that developed when Industry tried to shield itself from the emerging economic liabilities that silicosis was generating.

History reflects that the system just didn’t work. The longest running tort, asbestos reacted illness, plagued the workers’ compensation system and produced a  plethora of problems that only created more delay and denial of medical care for injured workers.

Economically the costs of direct costs for occupational illnesses and diseases continue to soar. Unfair cost shifting continues. A study in the year 2000 indicated that direct costs amounts to $51.8 Billion per year for hospitals, physicians and drugs. Workers’ compensation was reportedly covering only 27% of the costs and taxpayers were sharing un even share of the burden. The costs of occupational disease amounted for 3% of the gross national product.

The problems of under-reporting of occupational illnesses and disease even compound the reporting the true reality of the issue even further. The recent NY Times and Nebraska Appleseed investigative reports indicate that true numbers are hard to come by because of the fear and intimidation injured employees suffer in reporting claims.

Since the enactment of workers’ compensation in 1911, there has never been a greater opportunity to provide meaningful change to make the workplace healthier and safer. Congress and the President Obama should take advantage of this one-in-a-lifetime chance and make the Senate version of health care reform the law of the nation.

Click here to read more about health care and workers' compensation.

NJ Second Injury Fund Is In Financial Trouble

Governor Christie's transition team reported that the NJ Second Injury Fund (SIF) is insolvent. Several options were presented, if the SIF is going continue to operate.


The SIF was established to compensate totally disabled workers for their pre-existing disabilities shield the last employer from the total cost of the last compensable injury. The was enacted by NJ prior to the existence of the American With Disabilities Act (ADA) and theoretically was to encourage employers to hire handicapped workers.


Since the enactment of the ADA many states have felt that their was no need to continue the SIFs and the growing trend is to eliminate them. The SIF in NJ currently  supports the operating funds on the NJ Division of Workers' Compensation.


The transition report concludes:


"The SIF has been experiencing cash flow problems recently due to diversions from the fund in 2003 and 2004 and also as a result of legislative changes made in 2000 and 2003. Prior to 2000, the assessment against employers and insurance companies that finance the Division of Workers Compensation was determined by estimating the costs incurred to run all programs (including benefits) and multiplying that by 150%. In 2000, this was changed to 125% of estimated benefits and 100% of estimated administrative costs. These changes initially did not cause any significant cash flow issues; however, when the State began diverting money the combination of these factors resulted in an insufficient amount of cash being collected through assessments.

Solutions: Due to the legislative changes to the assessment calculations, the fund will never be able to restore solvency. The only solution requires legislative approval to phase out the $40 million “add back” and adjust the $5 million fund balance cap to a percentage of the prior years’ benefit payments. The only other option would be to find a supplemental appropriation to replenish the diverted money from FY2010."

Historically, surpluses in the NJ SIF have been raided by the Legislature and Governor and the funds diverted to the general treasury of the State. Like other NJ agencies, the NJ Division of Workers' Compensation has been challenged by mandated furloughs and short staffing issues. The fiscal problems of the SIF have compounded Medicare delays in the workers' compensation program in dealing with catastrophic and serious disability claims.

Click here to read more about The Second Injury Fund.

The Grey Area of the CMS Statute of Limitations for a Recovery Action

CMS (Centers of Medicare and Medicaid Services) has expressed an opinion that there is no specific time limit in its ability to seek recovery. At a recent town hall tele-conference concerning the implementation of mandatory insurance company reporting under Section 111 of the Medicare, Medicaid & SCHIP Extension Act of 2007, 42 U.S.C. 139y(b)(8) a spokesperson for CMS indicated that the traditional 6 year limitations statute was not the applicable time limitation for its recovery actions efforts.

CMS has been increasing its effort to recover money paid erroneously to injured workers’ whose medical benefits should have been paid by their employers or workers’ compensation insurance carriers. In an effort to reduce the CMS “pay and chase” activity, Congress enacted mandatory reporting by insurance carriers so that CMS could enforce the MSP {Medicare Secondary Payer Act] and reduce cost shifting at earlier stages of the claim while enhancing its recovery activity.

“(Tracy) Meador: Okay. And is there any - do you have any type of statute of limitations? I was told in a seminar that there’s a six year statute of limitations. Is that correct? I hadn’t heard that before.

[CMS[ Barbara Wright: This could be another one of those instances where the answer is maybe yes, maybe no depending on what you want to tie to it. Generally, there is a statute of limitations in terms of how long you have to bring a litigation action. But there’s different rules in terms of when it runs from.

And generally, anything we have doesn’t start to run until we have knowledge of the claim. And certainly in a liability situation it’s not the date of accident that controls. What we’re looking at is when there was any settlement, judgment, award or other payment.

So we would have at least six years from that date.

(Tracy) Meador: And after six years then you would no longer pursue recovery?

[CMS] Barbara Wright: That’s not necessarily true. What I said is the six year statute of limitations is generally tied to when we can pursue action in court. But there are other recovery actions that we have that we can take as well.”

FTS-HHS HCFA  Moderator: John Albert, 12-15-09/12:00 pm CT, Confirmation #5650450, Page 77

Good Medicine for an Ailing Compensation System

An historic shift in the delivery of medical care for those injured by occupational exposures has been signaled by the US Senate. Following decades of debate, the proposed emerging health care legislation, amended at the last minute by the Majority Leader's manager amendments, shifts Libby, Montana's asbestos disease claims to Medicare as a primary payor.

The stage was set last June 17th, when the US Environmental Protection Agency (EPA) declared Libby, Montana, a Public Health  Emergency, because of asbestos present at the site. The geographical location was the site of a W.R. Grace vermiculite mine.

The legislative provision was "buried" deep in the legislation at the last moment, reported Robert Pear of the NY Times. The amendment was made Senator Max Baucus of Montana, who lead the Senate legislative committee crafting the legislation. The convoluted political bartering over the last few days reflects a sentinel change in how injured workers may be receiving medical care in the years ahead. It is anticipated that major changes will be offered over the years ahead to modify and expand the coverage.

Occupational diseases have always been problematic to the State workers' compensation systems. They have been subject to serious and costly proof issues. They were "tag along" claims for a compensation system that initially was enacted in 1911 to cover only traumatic claims. The proposed legislation is a first major step to move occupationally induced illnesses into a universal health medical care system and will provide a pilot project for addressing the long awaited need to furnish medical care without serious and costly delays.

By allowing Medicare to become the primary payor and furnish medical care, those without a collateral safety net of insurance will be able to obtain medical care effectively and expeditiously. While cost shifting from workers' compensation to Medicare has been an historically systemic problem in the compensation arena, this legislation maybe a first major step to legitimatize the process. The legislation may allow for great accountability and expansion of the Medicare Secondary Payment Act (MSP) to end cost shifting that has become epidemic in proportion. It is good medicine for an ailing workers' compensation system.


Click here to read more about workers' compensation and universal health care.

Congress, Health Care & Unintended Consequences

This past week some very dramatic things happened in the workers’ compensation world. The US Senate moved forward on initiating a floor debate on health care. At the same time, a group of workers’ compensation scholars met in Washington DC to discuss the future of workers’ compensation and the interplay with social security disability.

 Highlights of the NASI (National Academy of Social Insurance) conference convened in Washington were findings presented by eminent leaders in the field. Professor John Burton, Rutgers University, pointed out that newly created barriers to workers’ compensation were pushing more injured workers to the Social Security disability system for benefits. This reflects a phenomenon that occurred in the late 1970’s when a study commissioned by the US Department of Labor and conducted by Mt. Sinai Hospitals’ Environmental Sciences Laboratory, revealed that the inadequate benefit delivery system of workers’ compensation for asbestos related illness, was forcing injured workers and their families into the civil justice arena for adequate compensation.

The problems have not changed in decades; they have only gotten worse, maturing into a system that is in critical condition and on life support. In 1980 Irving J. Selikoff, M.D. reported, “There has been widespread acknowledgement of significant problems with disability compensation for workers in the United States. One major area of concern has been the shortcomings with regard to occupational disease. Whatever the suitability of current workers’ compensation systems in the 50 states for injuries and work accidents, there has been little disagreement about the inadequacies of such systems for workers who become disabled by illness or, if they die, for their surviving dependents.”

Complex questions continue to exist between the scientific and legal communities as to the path to be taken. Barriers placed into the path of recovery, including pre-existing and co-existing conditions, which result in limited or delayed recovery and major shifting of the economic responsibility upon the public/private benefit systems need to be removed. The unspoken social consequences continue as a silent epidemic as families and survivors struggle in silence.

Looking backward over the noble experiment in California which turned sour, Tom Rankin, former President of the California Labor Federation, AFL-CIO, expressed his regret of the reform. The former Labor leader theorized that the results were “unintended consequences.” Indeed he is looking forward to solutions springing forth in a “public option” embedded into the national health care legislation.

Some participants at the NASI conference alleged a major shortcoming of the California workers’ compensation legislative reform effort. Doug Kim, a lobbyist for the claimant’s attorneys, disclosed that the injured workers’ advocates were not invited to partake in the discussion that lead up to crafting the initial drafts of the 2004 California reform legislation SB 899.

History reveals, that when the theoretical reforms were practically applied, the injured workers suffered serious setbacks. If these were in fact “unintended consequences,” then one must consider the active involvement of all stakeholders when looking forward to solutions. The courts in California have consistently upheld challenges to the inequitable results, pointing to the legislative intent to reduce costs. Absent from the discussions of the presenters were practical systemic applications to improve the present system. The “blood and guts” of the traumatic, delay and denial, struggles of navigating in a crippled workers’ compensation system, in California and elsewhere, is verification that change is mandated.

As North Carolina attorney, Valerie A. Johnson, so eloquently remarked, “workers’ compensation is supposed to be a simple system.” The process has now been obstructed by encroaching elements of fault, contributory negligence, apportionment of pre-existing conditions and difficulties of the element of time, manifested by latent diseases unknown to the fathers of the system a century ago. The advance of medical science has brought forth new and innovated modalities that have contributed to soaring medical costs. The convergence of these issues has generated higher administrative costs.

Pecuniary Industry motives have worked adversely to improving safety in the workplace. The need for workers’ compensation would be minimized by adopting a safer occupational environment. Under reporting of workplace accidents continue as the Government Accountability Office announced. Nebraska Appleseed reveals that workers feel intimidated and are apprehensive to report injuries and unsafe work conditions. This is scenario is compounded by the fact that undocumented workers, who have even less job security, work in jobs with higher risk. The Bush Administration did not make efforts to allow OSHA to heighten enforcement efforts. All of these ingredients combine to create a recipe that just doesn’t work.

The US Senate advanced the health care legislation to a floor debate in an unusual late Saturday night session. This action may indeed provide an opportunity for the stakeholders in workers’ compensation to all join in the debate and look for solutions to the delivery of appropriate medical care in an efficient and timely fashion. To avoid “unintended consequences” yet again, injured workers and their advocates will need to be active participants and engage in the debate now.

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To read more about workers’ compensation and universal health care solutions click here.

Medicare to Issue Interim Conditional Payment Letters for Medicare Secondary Payer Mandatory Reporting Compliance

Effective October 1, 2009, the MSP Recovery Contractor [MSPRC] will issue information concerning interim conditional payment amounts automatically (that is, without receiving a request for such information) as soon as an interim conditional payment amount is available. If you have an outstanding request for a conditional payment letter (CPL) for a case established prior to October 1, 2009, the request will be processed in the order received. For all new cases, the Medicare beneficiary and any authorized individuals will receive the CPL within 65 days of the issuance of the “Rights and Responsibilities Letter.” 


A form "Cover Letter" will be provided to facilitate communications with MSPRC once a case has been established. "This cover sheet is for your use when mailing or faxing in correspondence to the MSPRC. Please retain a COPY of this cover sheet for any future correspondence. The information above will ensure accuracy when handling your case documentation."


The NEW Rights and Responsibilities Brochure is now available on line.


The NEW "Proof of Representation Letter" and "Consent to Release" are also available on line.


For more information about the Medicare Secondary Payer Act and workers' compensation click here.

Medicare's Aggressive Debt Collection Practice

A recent article in Mother Jones reports upon the adverse consequences of Medicare's aggressive debt collection practices upon the aging population. The article describes the evolution of the Medicare's debt collection practice, from initially using the attorneys for the beneficiaries as debt collectors, though the new shift of responsibility to insurance carriers through mandatory reporting.

The author predicts, "The prospect of harsher penalties is already leading to insurance company overkill that, combined with Medicare's bureaucracy, has kept some elderly folks from receiving money that's rightfully owed them."
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To read more about CMS and Workers' Compensation click here.

The Great Health Care Debate

As the US Senate signals the beginning of the floor debate of the proposed health care legislation, a new chapter is about to be written in the Workers' Compensation medical benefit delivery system. If any of the five proposed bills, or prodigies of any, are enacted into law the nation's workers' compensation will be impacted.

The health care delivery system of the nation's compensation system is a patchwork of acts enacted in 1911 that have changed little since then. While modern medical science has move at the speed of light to develop new methods for diagnosis and new modalities for treatment, workers' compensation has stood still like a classic picture in the museum of time. While the US compensation system was crafted in 1911 to provide immediate and remedial medical care for industrial accidents in a swift and summary manner, the recognition of occupational diseases, and their enormous complex etiology, has been met by what some critics observe as a "deny and delay" strategy by Industry resulting in a failure of the system to provide benefits in an efficient and effective manner. Compounding the issue is the massive maize of collateral benefits of global insurance systems that have now resisted inappropriate benefit shifting to them and are mandating reimbursement for improper initial payments in the past and protection from looting in the future, ie. The Centers for Medicare and Medicaid Services.

The workers' compensation stakeholders have been silent participants in the drafting of the new health care legislation and have sat quietly on the sidelines. Only on the eve of the US Senate Finance's Committee's debate on the Rockefeller Amendment, for mandated broad and potentially universal coverage, was the chorus of compensation defense attorneys' heard to rally support in opposition without offering a creative solution.

The proposed legislation will embrace massive change for the nation's medical delivery and involve every individual, business, hospital and doctor. Yet to be determined is whether every employer will be mandated to provide health insurance. While the number of the nation's uninsured has continued to rise in epidemic proportions, the "safety net" for those who have been denied medical benefits under the workers' compensation systems have also grown logarithmically.

Issues remain open as the floor debate opens on health care. To be debated are many issues including: mandatory coverage; the extent of business involvement; financing the program; a public plan; government subsidies; and the cost of care. Any or all of these immense issues will ultimately impact the national workers' compensation system as it now exists.

As the unpredictable health care legislation is debated in Congress, the legislators will hopefully take notice of how other industrial countries have met the challenge to treat workers. The European countries, where workers' compensation had its geniuses almost a century ago, have already solved the problem through the enactment of universal health care.

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For more on workers' compensation and national health care reform click here.