Federal Appeals Court Upholds Constitutional Challenge Against CMS Memo

In a significant decision the 10th Circuit Federal Court of Appeals ruled that a constitutional challenge against the CMS 2005 CMS memo on future medical benefits in workers' compensation claims may proceed. The Court reversed the decision of the trial court and remanded the case for further proceedings.

"This suit arose after CMS clearly rejected such use of § 411.47, declaring that it applies only to medical expenses incurred before the workers' compensation settlement. In a memorandum issued on July 11, 2005 (the 2005 Memo), it said.

Q11. Compromising of Future Medical Expenses-Does CMS compromise or reduce future medical expenses related to a [workers' compensation] injury?

A11. No. Some submitters have argued that 42 C.F.R. § 411.47 justifies reduction to the amount [set aside for Medicare in a workers' compensation settlement]. The compromise language in this regulation only addresses conditional (past) Medicare payments. The CMS does not allow the compromise of future medical expenses related to a [workers' compensation] injury."

The Court ruled:

"In light of this precedent, we conclude that Protocols has suffered an actual injury. It admits that it has arranged settlements that are contrary to what CMS has declared to be required. As a result, CMS may sometime in the future demand that Protocols reimburse Medicare for Protocols' portion of settlement proceeds. And according to affidavits submitted by Protocols, this potential liability has a present impact on its business-that is, the contingent liability has created an actual and imminent injury."

07-1175 - Protocols, LLC v. Leavitt (12/11/2008)

Parent Corporation Has 3rd Party Lien Rights

A NJ Appellate Court ruled that a workers' compensation carrier is permitted to enforce its right reimbursement against the third party recovery from a parent company of the employer.  Liberty Mutual was permitted to "pierce the corporate veil." The Court declared, "...To do otherwise would be to condone a situation in which an injured employee collects workers' compensation benefits and thereafter receives monetary damages in a third-party liability action with no obligation to reimburse the workers' compensation insurer."

LIBERTY MUTUAL INSURANCE COMPANY v. CIPRIANO

Decided Dec. 10, 2008.

Washington Supreme Court Restricts Asbestos Claims

The Washington Supreme Court has taken a step back in time and rendered two significant decisions limiting he rights of asbestos victims to gain recovery. The Court ruled that if a company did not make asbestos products or manufacture them there was no duty to war. Speaking for the minority, Justice Debra Stephens wrote, "no duty to warn of a serious hazard it knew or should have known was involved in the use of its product ignores logic, common sense, and justice." 

Decisions

Dec. 11, 2008	80251-3	-	Braaten v. Saberhagen Holdings
Dec. 11, 2008	80251-3	-	Braaten v. Saberhagen Holdings (Dissent)

ec. 11, 2008	80076-6	-	Simonetta v. Viad Corp.
Dec. 11, 2008	80076-6	-	Simonetta v. Viad Corp. (Dissent)

Asbestos Continues to Reduce Potential Years of Life

Asbestos exposure continues to have high rates of death in the US. Potential years of lost life continue to be at epidemic proportions. The US CDC reports that premature mortality as a result of asbestos related disease continues to be at all time highs. Asbestos is still not banned in the US

CMS to Mandate Use of WCIO Reporting Codes

In a telephone conference on December 12, 2008, CMS indicated that it will require the Workers Compensation Insurance Organizations reporting codes under the mandatory reporting procedures.

Part of Body

Nature of Injury

Cause of Injury

An explanation of the codes is available at on the WICO website.

Medicare Secondary Payer Mandatory Reporting

Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173), adds new mandatory reporting requirements for group health plan (GHP) arrangements and for liability insurance (including self-insurance), no-fault insurance, and workers' compensation.  See 42 U.S.C. 1395y(b)(7) & (8). 

Medical Costs Soar in Workers' Compensation

The cost of medical care has increased tremendously according to a recently issued  report. The NCCI (National Council on Compensation Insurance Inc.) reports an increase in medical costs from 40% in the early 1980s to almost 60% currently.

NCCI reports that the increase appears to be national, "....Furthermore, although there are differences in the medical share by state, the change in the relative mix of states has had very little impact on the estimated countrywide share of medical and indemnity benefits."

The national workers' compensation medical delivery system has now become a focus of attention in light of the prospects of an overhaul of national health care system as medical costs continue to put American businesses at a economic disadvantage with foreign competitors. James Kvaal, in his article, "The Economic Imperative for Health Reform," highlights that "...ever rising medical costs are threatening to drive an unsustainable explosion in the national debt." Higher insurance premiums result in lower wages or lack of medical coverage all together and the loss of preventive care.

The costly and inadequate workers' compensation medical delivery system provides a fragmented approach to medical care. The system's focus should treat current medical conditions and provide for preventive care. The administrative costs savings in providing global coverage will translate into reduced delivery costs and a healthier work force. Some of the extra savings could be well spent on much needed medical research to avoid the need for costly medical care.

Putting Workers First - A Proposed Agenda for the Obama Administration

The Center for American Progress will host a program  on Tuesday, December 8, 2008 to discuss how the Obama Administration may immediately improve upon the Bush's administration's poor track record for the ordinary American worker.

9:00 - 10:30 a.m.

Panel I: Enforcing Change: Strategies for the Obama Administration to Enforce Workers' Rights at the Department of Labor
Jordan Barab, Senior Labor Policy Advisor, Committee on Education and Labor, U.S. House of Representatives
Kim Bobo, Founder and Executive Director, Interfaith Worker Justice 
Thomas E. Perez, Secretary, Maryland Department of Labor, Licensing and Regulation 
Catherine K. Ruckelshaus, Litigation Director, National Employment Law Project
Karla Walter, Policy Analyst, American Worker Project, Center for American Progress Action Fund

Moderated by:
David Madland, Director, American Worker Project, Center for American Progress Action Fund

10:30 - 11:00 a.m.
Keynote Address:
Governor Jon Corzine (D-NJ)

11:00 - 12:00
Panel II: Making Federal Contracting Work for the United States
Scott Amey, General Counsel, Project on Government Oversight
Margaret Daum, Counsel, House Oversight and Government Reform Committee
Richard C. Loeb, University of Baltimore School of Law
David Madland, Director, American Worker Project, Center for American Progress Action Fund

Moderated by:
Scott Lilly, Senior Fellow, Center for American Progress Action Fund