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 to Rely on New Life Tables for Workers Compensation Set Aside Agreements

The Centers for Disease Control (CDC) has recently published its 2006 United States Life Tables. Effective July 19, 2010, the Centers for Medicare & Medicaid Services (CMS) will begin referencing the CDC's Table 1: Life table for the total population: United States, 2006, for WCMSA life expectancy calculations. This means that for any newly submitted WCMSA proposal received by CMS' Coordination of Benefits Contractor (COBC), or where any WCMSA case is reopened on or after July 19, 2010, CMS will apply the CDC's 2006 Table 1 for life expectancy calculations.


In 2006, the overall expectation of life at birth was 77.7 years, representing an increase of 0.3 years from life expectancy in 2005. From 2005 to 2006, life expectancy at birth increased for all groups considered. It increased for males (from 74.9 to 75.1) and females (from 79.9 to 80.2), the white (from 77.9 to 78.2) and black populations (from 72.8 to 73.2), black males (from 69.3 to 69.7) and females (from 76.1 to 76.5), and white males (from 75.4 to 75.7) and females (from 80.4 to 80.6).


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


Click here for more information on how Jon L Gelman can assist you in a claim for workers' Compensation claim benefits. You may e-mail Jon  Gelman or call 1-973-696-7900.

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.

Amended Complaint Filed in CMS Recovery Action Against Law Firms

The Secretary of Health and Human Services (HHS) [The Centers for Medicare and Medicaid Services (CMS)] has filed a first amended complant Stricker case now pending 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 initial 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)."

The case is now under a briefing schedule for a pending Motion to Dismiss filed by the defendants. Plaintiff's response is due May 27, 2010 and the Defendant's reply is due June 10, 2010.

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.

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.

CMS Announces New Life Tables

The Centers for Disease Control (CDC) has recently published its 2005 United States Life Tables. Effective April 12, 2010, the Centers for Medicare & Medicaid Services (CMS) will begin referencing the CDC's Table 1: Life table for the total population: United States, 2005, for WCMSA life expectancy calculations. This means that for any newly submitted WCMSA proposal received by CMS' Coordination of Benefits Contractor (COBC), or where any WCMSA case is reopened on or after April 12, 2010, CMS will apply the CDC's 2005 Table 1 for life expectancy calculations.

In 2005, the overall expectation of life at birth was 77.4 years, representing a decline of 0.1 years from life expectancy in 2004. From 2004 to 2005, life expectancy at birth remained the same for males (74.9), females (79.9), the white population (77.9), white males (75.4), white females (80.4), the black population (72.8), and black males (69.3). Life expectancy at birth increased for black females (from 76.0 to 76.1). Life expectancy estimates based on the revised meth­ odology are slightly lower than those based on the previous method­ ology. For 2005, life expectancy at birth based on the revised methodology was lower by 0.4 years for the total population.

Click here to read more about "Life Expectancy" 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.

Citing Violations Medicare Ends Contract with Fox Insurance Company Drug Plan

The Centers for Medicare and Medicaid Services has issue an announcement of the immediate termination of Fox Insurance Company.

Members Will Be Provided Access to Drugs While Transitioning to New Plans.

The Centers for Medicare & Medicaid Services (CMS) today terminated its contract with Fox Insurance Company. After an onsite review of the plan and its services, CMS determined that the plan’s significant deficiencies – not meeting Medicare’s requirements to provide enrollees with prescription drugs according to recognized standards of care – jeopardized the health and safety of Fox enrollees. CMS found that Fox committed a series of violations, including improperly denying its enrollees coverage of critical HIV, cancer, and seizure medications. The termination of the contract is effective immediately.

The immediate termination will not impact or delay access to drugs for the more than 123,000 Medicare beneficiaries currently enrolled in Fox plans. Beginning tomorrow, all enrollees will obtain their drugs through LI-NET, a program run by Medicare and administered by Humana, to ensure that beneficiaries receive their Medicare prescription drugs. Fox enrollees will be able to choose a new Medicare prescription drug plan through May 1, 2010. Current enrollees who do not choose a plan will be enrolled into a new plan by Medicare.

“The immediate termination of Fox as a Medicare prescription drug plan demonstrates our commitment to protecting the health of some of their most vulnerable enrollees from getting necessary drugs, in some cases life-sustaining medicines. CMS’s immediate action was essential to protect members’ health and safety – an integral part of our contract with all Medicare beneficiaries,” said Jonathan Blum, acting director of CMS’ Center for Drug and Health Plan Choices. “Fox enrollees also need to know that they are not losing their drug coverage and will continue to have access to needed medicines. We will be sending letters explaining the steps we are taking to ensure they continue to get their medicines. They can also call 1-800-MEDICARE or their local state health insurance assistance programs if they have questions.”

CMS issued an enrollment and marketing sanction to Fox on Feb. 26, 2010, because the organization was not following Medicare’s rules for providing prescription drug coverage to its enrollees. After an onsite audit, which ran between March 2 and March 4, CMS found Fox’s problems persisted and it continued to subject its enrollees to obstacles in getting needed and, in many cases, life–sustaining medicines. CMS also found that many of the obstacles were in place to limit access to high-cost drugs, which could have led to enrollees’ clinical needs not being met. In many cases, Fox enrollees were required to have unnecessary and invasive medical procedures before they were able to obtain drugs. Fox was unable to satisfactorily address these compliance concerns and furnish medicines to its Medicare enrollees.

Among the audit findings CMS found include:

· Failing to provide access to Medicare prescription drugs benefits by imposing unapproved prior authorization and step therapy criteria that made it more difficult for beneficiaries to get drugs that are protected by law.

· Not meeting the plan’s appeals deadlines,

· Not complying with Medicare regulations requiring enrollees to be transitioned to new drugs at the beginning of the new plan year.

· Failing to notify enrollees about prior authorization and step therapy determinations as required by Medicare.

According to CMS auditors, Fox was unable to satisfactorily address compliance concerns cited in the enrollment and marketing sanction and meet contractual obligations to provide medicines to Medicare beneficiaries enrolled in their plans.

“We take our oversight role of Medicare prescription drug plans seriously,” said Blum. “We review and take action on all complaints received about Medicare health and drug plans and will take appropriate and immediate actions wherever necessary.”

CMS encourages Medicare prescription drug plan enrollees having concerns with access to drug coverage to contact 1-800-MEDICARE (1-800-633-4227) or the state health insurance assistance program (SHIP) to help get them resolved. Medicare enrollees, their families and their caregivers can contact a SHIP near them by visiting:http://www.medicare.gov/Contacts/staticpages/ships.aspx

# # #

NOTE: States in which the Fox plan was available were: Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Louisiana, Maryland, Missouri, North Carolina, New Jersey, New York, Nevada, Ohio, Pennsylvania, South Carolina, Texas and West Virginia.

To read more about CMS and workers compensation, click here.

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 Set-Aside Rules Raise Concern of Civil Trial Bar

At a recent continuing legal education program in Wisconsin members of the plaintiff and defense civil trial bar raised their concerns over the Rules governing CMS set-aside arrangements. While both sides recognized the need to reimburse Medicare, the methods being utilized by CMS to obtain reimbursement of future medical expenses caused deep concern by the lawyers.

Click here to read more about CMS Set-aside arrangements.

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

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.

.......

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."
.....
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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CMS Terminates Voluntary WC Data Match Program

CMS has formally terminated the voluntary WC Data Match program that it instituted several years ago. With the enactment of Section 111 Mandatory Insurance Company reporting the voluntary program afforded to States and Insurance Company has been terminated.

In a letter to those participating CMS stated:

"This voluntary reporting arrangement has now ended. On July 1, 2009, Section 111 of the Medicare, Medicaid, and SCHIP Extension Act (the MMSEA) became effective for Workers’ Compensation insurance coverage. As of that date, the reporting of Workers’ Compensation information in support of Medicare Secondary Payer (MSP) determinations by CMS became mandatory. All existing voluntary reporting arrangements involving Workers’ Compensation programs are now null and void.

"July 1, 2009, is the date Section 111 reporting became effective, but it is not the date that states will begin to report Workers’ Compensation information under the Section 111 requirements. In summary, states that will be reporting Workers’ Compensation data through the Section 111 process are required to register for Section 111 reporting by September 30, 2009. The testing of the electronic data exchange process will start January 1, 2010. The first “production” file exchanges will start April 1, 2010.

"The process for arranging Section 111 reporting, and all the reporting timeline benchmarks that have been established are described in full on the Section 111 Website, www.cms.hhs.gov/mandatoryinsrep . The current version of the “NGHP User Guide” and additional instructions needed to report Workers’ Compensation information are located on the Website’s “Liability Insurance, Self-Insurance, No-Fault Insurance and Workers Compensation (NGHP)” page."