Today I taught worker’s compensation “Offsets” in the course I teach at Marquette Law School. The students were aghast at the amount of “cost shifting” that occurs in worker’s compensation: that is, medical costs paid by a variety of sources other than worker’s compensation for medical expenses that should be paid by the worker’s compensation insurer.
We all pay an additional price for medical costs borne by group health insurance carriers, Medicaid, and Medicare that should in fact be paid by worker’s compensation insurers. This “cost shifting” occurs in two significant ways. First, if the claim is denied by the worker’s compensation insurance carrier, medical costs may be paid by the worker’s group health insurance or other private insurance company, or through State Medicaid or federal Medicare programs (the cost of which we all pay in taxes). When those claims are settled, the worker’s compensation insurer routinely saves money by reduced negotiated payment contracts with medical providers, between the provider and the group health carrier, Medicare, or Medicaid (rather than the “full boat” payments that should be paid by the worker’s compensation insurer). If the treatment is deemed work-related after a hearing, the worker’s compensation insurer will pay the other insurer, but at reduced rates.
Second, since only about one in ten cases involves any kind of litigation, workers who are not represented routinely bill their group or other insurance carrier for medical treatment that should be paid by worker’s compensation. Bolstering this notion is a recent article in the Insurance Journal. In the article Jonathan Gruber, Professor of Economics at M.I.T. was quoted indicating that worker’s compensation carriers should see fewer claims as a result of more Americans obtaining health insurance under the Affordable Care Act. He said “As more people have health insurance there is less need for them to have injuries covered by worker’s compensation and this should lower worker’s compensation costs.” Nowhere in this analysis is the notion that the appropriate payor for a worker’s compensation injury should be a worker’s compensation insurer, not health insurance premiums (which are shared by us all) nor Medicare and Medicaid (again shared by us all in the form of taxes).
Workers hurt on the job should have their medical treatment paid by the worker’s compensation insurer, who has received a premium for that risk from the worker’s employer. Cost shifting may increase worker’s compensation profits, but it hurts both the employers’ and the employees’ bottom line.
Today’s post comes from guest author Leila A. Early from The Jernigan Law Firm.
Medicare should not pay medical bills that are the primary responsibility of a third party. When they do, they want to be reimbursed, and all parties understand that concept, but the problem is the lengthy delays and lack of due process. The SMART Act, which was signed into law by President Obama on January 10, 2013, amends and reforms the Medicare Secondary Payer Act to improve the reimbursement process. It is located in Title II of H.R. 1845 and entitled “Strengthening Medicare Secondary Payer Rules.”
Section 201 requires CMS to maintain a secure web portal with access to claims and reimbursement information. Payments for care made by CMS must be loaded onto the portal within 15 days of the payment being made. The portal must also provide supplier or provider names, diagnosis codes, dates or service, and conditional payment amounts. Moreover, the portal must accurately identify that a claim or payment is related to a potential settlement, judgment or award. After several steps, the parties may download a final conditional payment amount from the website. If there is a dispute over the conditional payment amount, CMS must respond/resolve the dispute within 11 days or the proposed resolution by the claimant/applicable plan will be deemed accepted. In terms of appeals, CMS must draft regulations that give applicable insurance plans limited appeal rights to challenge final conditional payment amounts. This process will go into effect around April of 2013.
Section 202 states that by November 15th of each year (beginning in 2014), CMS is required to calculate and publish a threshold for liability claims. If an amount owed is under that threshold amount, CMS is barred from seeking repayment. Section 205 states the statute of limitations for conditional payment recovery by CMS is three years after the receipt of notice of a settlement, judgment, award, or other payment made.
The SMART Act applies to workers’ compensation cases, so it is important to understand the law and how it will be applied in the future. Read it and follow its implementation closely.
In many workers’ compensation cases, Medicare pays medical treatment expenses for an injured worker that may otherwise be the responsibility of the workers’ compensation insurance carrier. In the past decade, workers’ compensation practitioners have become well-versed in dealing with Medicare issues and establishing Medicare Set Asides—effectively deals between the federal government (Medicare) and the work comp insurance company to cover future work-related medical care for the injured worker.
However, Medicare does not cover all types of medical treatment expenses. Thus, certain types of medical treatment cannot be considered part of a Medicare Savings Account (MSA), but those expenses could still be the responsibility of the insurance carrier. One of those non-Medicare-covered expenses are TENS units for chronic law back pain. On August 1, 2012, the Centers for Medicare and Medicaid Services (CMS) issued a memorandum regarding Transcutaneous Electrical Nerve Stimulation (TENS) units for chronic low back pain. The new CMS policy indicated that chronic low back pain (CLBP) is “an episode of low back pain that has persisted for three months or longer; and is not a manifestation of a clearly defined and generally recognizable primary disease entity.” CMS indicated that for all workers’ compensation cases settled after June 8, 2012, use of TENS units for chronic low back pain will no longer Continue reading