The SCWCEA is excited to be meeting in-person again at the Annual Educational Conference in Myrtle Beach, SC on October 3-6, 2021.
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Medivest will be attending the 2021 National Workers Compensation and Disability Conference at Mandalay Bay in Las Vegas. As the industry's largest national conference, National Comp offers the tools and ideas you need to propel your workers’ comp and injury prevention programs and stay on top of tomorrow’s trends.
Medivest will be exhibiting at the 14th Annual Tennessee Self-Insurers Association (TNSIA) Conference. The TNSIA is a non-profit organization dedicated to educating employers, insurers and service providers on workers’ compensation issues, and the conference is intended to educate employers...
Medivest will be attending the 2021 North Carolina Association of Self-Insurers (NCASI) Annual Conference. On the agenda for this year will be the Industrial Commission’s perspective on the impact of reforms. Also on the agenda, a panel discussion among three lawyers on strategies for defending extended benefits, a look at threats to employers’ control of medical treatment, a case law update, recent advances in treating brain injuries, managing the post-COVID workforce, and tips on improving your actuarial performance.
How Attorneys in Washington and Other States Should Prepare Their Clients and Themselves for Lump-Sum Settlements
Last month, Washington state governor Jay Inslee signed a bill into law that will allow injured workers to receive Workers’ Compensation (WC) settlements as lump-sum settlements for the first time. Included in the bill, S.B. 5046 was an emergency clause that made it take effect immediately once it was signed. Previously, injured workers in Washington state were required to receive WC settlements via structured settlement (annuitized) payments over time. The COVID-19 Pandemic may have influenced this change and only time will tell if the decision will be good for the State of Washington. Funding of WC settlements by structured settlements have always provided a sort of safety net so that if a WC claimant failed to preserve settlement funds in any one year, there would be another round of funding to help cover the medical needs of the claimant going forward.
Are There Risks with Lump-sum Settlements?
Lump-sum settlements offer the advantage of receiving money immediately, which can be helpful when large bills are looming overhead. However, injured workers who receive lump-sum settlements are naturally prone to misuse the medical portion of their settlement funds for several reasons. Disregarding any malicious intent, its not uncommon for misuse to occur due to:
- Lack of Expertise – Inability to seek or negotiate for the best price on products and services due to a lack of knowledge about fee schedules, rates, coordination of benefits, medical billing department practices and policies, and negotiation.
- Dependence on Willpower – Decisions are at the mercy of the beneficiary’s self-control.
- Outside Influences – Life circumstances, including needs and wants, or even manipulation by family members or friends creates pressure to spend imprudently.
Workers’ Compensation claimants may face sanctions from the Centers for Medicare & Medicaid Services (CMS), the agency charged with administering the Medicare program, which include denial of future medical care under Medicare for the WC related injury that was compensated, and obligation of repayment to Medicare for conditional payments made by Medicare, which can potentially be up to double the amount owed or otherwise carry high interest on unpaid Medicare Secondary Payer statute (MSP) debt. However, consequences of misuse of funds are not limited to just the claimants. Their attorneys may also share responsibility.
What Does This Mean for Attorneys in Washington State?
Attorneys in Washington, and any other state that allows lump-sum payments for Workers’ Compensation settlements, must make every effort to ensure that their clients are considering Medicare’s future interest in their settlement and have a plan for future care that will protect Medicare from being prematurely billed for any injury related and Medicare allowable future medical component of the WC settlement. CMS identifies the legal support providing why an attorney could be in its cross-hairs as a target of a MSP recovery penalty for a claimant’s misuse of funds in its April 22, 2003 memorandum.
- CMS may sue for repayment from all parties involved in the settlement, including the claimant’s attorneys. Double damages may also be sought against the “primary payer” under the authority of 42 CFR 411.24(c)(2), and if the government is unable to recover against the “primary payer,” against the “beneficiary.” 42 CFR 411.24(l)(1).
- CMS outlines the “ethical and legal obligations” of attorneys representing Workers’ Compensation claimants when their clients chose to “ignore Medicare’s interests in a Workers’ Compensation case,” citing to the CFR section that gives CMS a claim against the attorneys.
How to Protect Future Medicals and Your Own Future
For the protection of all parties involved, CMS highly recommends Professional Administration for a Medicare Set-Aside account. It effectively eliminates or significantly reduces the likelihood of misuse of MSA funds, assuring the settling parties remain in compliance with the letter and spirit of the MSP thereby protecting both the claimant and attorney. Additionally, Medivest’s Professional Administration services can often stretch the medical portion of the settlement funds, helping to ensure that medical funds are available for a longer period of time than if self-administered.
Medivest can help you navigate through Medicare Secondary Payer compliance complexities while you work toward a desired settlement outcome. Call us to today to speak to one of our highly trained settlement consultants for a free lien and MSP futures case consultation. For more information about Medivest or to refer a case, please call 877.725.2467 | Monday – Friday 8 am to 5 pm EST.
Medivest will be joining the Ohio Association for Justice June 14 -18 for the biggest event in Ohio plaintiff’s law, the 2021 OAJ Annual Convention. This year’s Convention is designed with flexibility in mind, with a hybrid option to attend in-person and virtually as well as a virtual-only option. Virtual participants will receive links to all live streaming options and complimentary access to the Annual Convention streaming library through the end of September. Tune in for your favorite sessions and earn the rest of your CLEs where you want, when you want. Earn up to half of your biennial CLEs while networking and building connections with plaintiff’s attorneys from around the state and midwest.
Director of Sales, Scott Mattingly will be in attendance. Please visit him at the Medivest booth for information regarding Professional Administration, Lien Resolution, Medicare Set-Aside Reports, and all of Medivest’s settlement solutions for workers’ compensation and liability cases. For more information on the event please visit https://www.oajconvention.com/.
The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide (“Reference Guide”) Version 3.3 on April 19, 2021. This Reference Guide replaces Version 3.2 which was released on October 5, 2020. There are a few notable changes when comparing the two Reference Guides. The blue highlights below indicate the updated changes provided in Reference Guide Version 3.3.
CMS’s Version 3.3 Reference Guide includes the following changes:
- The CDC Life Table link was updated (Section 3).
- Language around surgeries to be covered by seed money in a structured settlement was clarified, and a disclaimer was added to the proposal review reference tools list in Appendix 4, along with the Conduent Strataware® tool (Sections 5.2 and 9.4.4, Appendix 4).
- Miscellaneous clarifications were added as follows (Sections 9.4.5, 10.2, 16.2, and 4):
- On pricing: include refills when pricing intrathecal
- On documentation: clarification was added on Consent to Release
- On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original
- The Major Medical Centers table was updated for a Missouri entry (Appendix 7).
To download the new WCMSA Reference Guide v3.3 Click Here.
Change 1 – CDC Life Table Updated Link
Section 10.3
- CMS Update: “CMS will project the cost of the claimant’s future treatment over the claimant’s life expectancy, using the Centers for Disease Control (CDC) Tables https://www.cdc.gov/nchs/data/nvsr/nvsr69/nvsr69-12-508.pdf
Please see the WCMSA site (http://go.cms.gov/wcmsa) for additional information.”
Change 2 – Seed Calculations Include Cost of First Surgery/Procedure for Each Injured Body Part
Section 5.2
Language around surgeries to be covered by seed money in a structured settlement was clarified.
- Medivest’s Takeaway: Of these announced changes, the change of most significance is the clarification that CMS expects seed calculations to be evaluated for each affect body part of an injured worker. Text has been inserted in multiple locations for this purpose. We have placed references to the applicable Reference Guide section where the updated language appears and have quoted various portions of the existing language along with the revised/inserted language for context below, with the revised language appearing in blue highlight.
- CMS’ Update: “A WCMSA can also be established as a structured arrangement, where payments are made to the account on a defined schedule to cover expenses projected for future years. In a structured WCMSA, an initial deposit is required to cover the first surgery or procedure for each body part, and/or replacement and the first two years of annual payments. The initial deposit (“seed money”) is followed by subsequent annual deposits (or a shorter time period if CMS agrees to such), based on the anniversary of the first deposit. If in any given coverage year, the deposited funds are not exhausted (i.e., used up, spent), they are carried forward to the next period and added to the next annual deposit. The whole fund, including carry-forwards, must be exhausted before Medicare will pay primary for any WC injury-related medical expenses. If the fund is exhausted appropriately in a given annual period, Medicare will pay primary for further WC injury-related medical expenses during that period. In the next annual period, the replenished WCMSA funds again must be used, until the WCMSA amount is appropriately exhausted.”
Section 9.4.4
- Medivest’s Takeaway: Slight changes were also made under 9.4.4 Medical Review, Step Six, to clarify that seed calculations are to be performed for each affected body part/injured area as follows:
- CMS’ Update – Section 9.4.4: “When annuity is selected, the submitter provides a proposed “seed” or initial deposit amount. This amount should include the cost of the first surgery/procedure for each body part, if any. The seed includes the first two years of the annual amount. See Section 05 – Cover Letter in this guide for instructions on how to calculate the seed amount, with an example.54r3efd
The seed includes the cost of the first surgery/procedure for each body part, including all costs such as prescription drugs, physician fees, anesthesia fees, and facility fees. If the surgery is preceded by an associated trial, i.e., trial SCS or trial intrathecal (IT) pump, the cost of the trial is also included since it is considered part of the same procedure. If there are no surgeries, the first procedure (if any, such as injections) is included. Series of spinal injections are not included, but series of knee visco supplementation are included if three are anticipated to be accomplished as a series of three weekly injections.
The first replacement of Durable Medical Equipment (DME), prosthesis, or orthotics is included in the seed funds if the cost of such items exceeds $500.
The seed includes the cost of surgeries, procedures, drugs, or replacement items as noted above. It does not include the cost of diagnostic studies, complications, and hospitalizations for non-surgical treatment.”
Other locations where the per body part is referenced include in 10.1 Section 05-Cover Letter:
on page 39:
. . .
“Note: Where the WCMSA is to be funded by a structured settlement, the cover letter
must disclose whether any portion of the projected prescription drug expenses has been included in the lump sum required to cover the first surgery/procedure for each body part,
and/or replacement and the first two years of annual payments.”
. . .
As well as in two places on page 40 under the same section:
“Example:
Total WCMSA = $301,826.90
Cost of first surgery for each body part, and/or the first procedure/replacement =
$10,191.40”
. . .
“Step 2. Identify the cost of the first surgery for each body part and the first
procedure/replacement ($10,191.40)”
Appendix 4-1 | WCRC Proposal Review Reference Tools
- CMS’ Update: “Strataware® is a tool, for repricing medical bills to state mandated fee schedules, as well as usual, customary and recommended (UCR) rates.”
Change 3 – Pricing Updates Includes refills when pricing intrathecal pumps
Section 9.4.5 | Medical Review Guidelines Intrathecal (IT) Pumps
Pricing clarification was updated for Intrathecal pumps to stress that pump refills should be projected for the claimant’s life expectancy.
- CMS Update: “The WCRC follows the most recent guidance from CMS on intrathecal (IT) pump pricing and frequencies. Permanent placement of IT pump devices are included every 7 years: the claimant’s life expectancy is divided by 7, decimals are dropped, and the whole number is used for determining replacement over the life expectancy. Pricing includes necessary pump refills over the claimant’s life expectancy.”
“Pricing for Spinal Cord Stimulator (SCS) Surgery
. . .
Consider the number of leads to be used.
Analysis Services: CMS LCDs (L34705 and L35648) can be billed every 30 days and more frequently in the first month. It should be priced four times in the first 30 days, monthly for the first year, and twice a year after the first year.
5. LCD L34705 – SCS (Dorsal Column Stimulation) – “Generally, electronic analysis services (CPT codes 95970, 95971, 95972, and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.”
6. LCD L35648 – SCS for Chronic Pain – Under Utilization Guidelines: “Generally, electronic analysis services (CPT codes 95970, 95971, 95972 and 95973) aren’t considered medically necessary when provided more often than once every 30 days. More frequent analysis may be necessary in the first month after implantation.
Section 10.2 | Consent to Release Note
- CMS’ Update: “Consent to Release documents must be signed (by hand or electronically) with the full name of either the claimant, matching the claimant’s legal name, or by the claimant’s authorized representative, if documentation establishing the relationship is also provided. It must be a full signature, not initials.”
Section 16.2 | Amended Review
On WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.
- CMS’ Update:
- In the event that treatment has changed due to a state-specific requirement, a life-care plan showing replacement treatment for denied treatments will be required if medical records do not indicate a change. Requests for changes to treatment plans will not be accepted without supporting medical documentation.
- The approval of a new generic version of a medication by the Food and Drug Administration does not constitute a reason to request an amended review for supposed changes in projected pricing. CMS will deny the request for re-review if submitters fail to provide the above-referenced justifications with the request for re-review. Submitters will not be permitted to supplement the request for re-review, nor will they be developed.
- Re-review and amended review requests may be made electronically or by mail.
See the WCMSAP User Guide at https://www.cob.cms.hhs.gov/WCMSA/assets/wcmsa/userManual/WCMSAUserManual.pdf for details on electronic submission. Professional Administrators who are not the original submitter, see Section 19.4.
Section 19.4 | Change of Submitter
Provides Helpful Information to Professional Administrators that did not submit the WCMSA on How to Gain Access on the WCMSA Portal case access: clarification was added on case access for Professional Administrators who are not the original submitter.
- CMS’ Update: Professional Administrators whose EIN does not match the EIN of the original submitter, contact BCRC to gain access to the case via the WCMSA Portal; otherwise you must submit by mail. Submitter changes will not be accepted after settlement, and does not constitute a reason for a re-review (See Section 16.0 for re-review requirements). CMS will not provide copies of existing documentation to the new submitter. Any documentation must be obtained from the incumbent submitter or insurer.”
Change 4 – The Major Medical Centers table was updated for a Missouri entry (Appendix 7)
Click Here for the updated list of Major Medical Centers by State, NPI, and ZIP Code with the new Missouri entry.
Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467. For any specific questions regarding MSAs of any type click here.
The Workers’ Compensation Institute (WCI) is a nonprofit educational organization that serves as a comprehensive resource to all workers’ compensation stakeholders. WCI sponsors the annual Workers’ Compensation Educational Conference and brings together workers’ compensation professionals from across the country. It is the nation’s largest work comp conference and the programming, networking, exhibit hall, and entertainment cannot be matched.
The Centers for Medicare & Medicaid Services provided an alert on November 25, 2020 that it reviewed the costs related to collecting Medicare’s conditional payments and compared the cost to CMS recovery amounts, and decided to leave the threshold for physical trauma-based liability insurance settlements (including self-insurance settlements) at $750. Additionally, CMS indicated it will keep the $750 threshold for No-Fault insurance and Workers’ Compensation settlements, where the No-Fault insurer or Workers’ Compensation entity does not otherwise have ongoing responsibility for medicals (ORM). Otherwise, once ORM reaches $750 for either No Fault or Workers’ Compensation plan claims, those payments need to be reported for Medicare beneficiaries via Section 111 Reporting. These described reporting thresholds do not apply to settlements for alleged ingestion, implantation, or exposure cases.
Take Aways:
Those settlements falling under any of the above described categories of insurance or self-insurance commonly referred to as Non-Group Health Plans (NGHP) will not need to be reported under the Medicare Secondary Payer Act (MSP) via Section 111 and will also not be subject to recovery claims by Medicare under the MSP.
See this web link for the CMS Alert regarding these NGHP reporting thresholds: https://www.cms.gov/files/document/2021-recovery-thresholds-certain-liability-insurance-no-fault-insurance-and-workers-compensation.pdf
On March 20th, we discussed what actions Washington State’s Workers’ Compensation Agency was taking that would allow medical providers and injured workers to file claims for work related/industrial exposure to COVID-19. Since then, other states have also taken action and created new policies in regards to the COVID-19 outbreak.
Kentucky
Last month, Kentucky was one of the States that adopted policy to provide workers’ compensation benefits to healthcare workers and first responders exposed to COVID-19. On April 9th, 2020 Governor Andy Beshear of Kentucky extended the provision of those benefits to additional types of employees. In his executive order, Gov. Beshear ordered that an employee could receive temporary total disability (TTD) payments for the period of time that the employee was quarantined if that employee met certain criteria.
The burden of proof lies with the employee to show that the COVID-19 exposure was caused by the work conditions. The employee’s removal to quarantine has to be ordered by a physician. If the employee can show the connection and removal by a physician, TTD payments can now be received for the quarantine period even if the employer denies liability.
The expanded list of those now eligible for TTD payments includes healthcare workers, first responders, corrections officers, members of the military, activated National Guard, domestic violence shelter workers, child advocacy workers, rape crisis center staff, Department for Community based Services workers, grocery workers, postal service workers, and child care workers permitted by the Cabinet for Health and Family Services to provide child care in a limited duration center during the State of Emergency.
Florida
Florida followed Washington and Kentucky, and as of the end of March, Florida Chief Financial Officer Jimmy Patronis ordered the state’s Division of Risk Management (DRM) to review workers’ compensation claims submitted by state workers “required to interact with potentially infected individuals.” Those workers includes those employees known in Florida as “Frontline Workers“: law enforcement, firefighters, EMTs, paramedics, correctional officers, health-care workers, child safety investigators and Florida National Guardsmen.
The Florida League of Cities also announced in March that the Florida Municipal Insurance Trust would cover municipal first responders’ COVID-19 claims.
Illinois
This week, Illinois has taken a progressive step with the introduction of an emergency amendment to the Illinois Workers’ Compensation Commission’s rules of evidence under Part 9030 titled Arbitration, establishing a rebuttable presumption of a causal connection between employment and contraction of COVID-19 for both First Responders and Frontline Workers who contract COVID-19 as a result of their employment.
This is different than any other state in terms of the burden of proof. In most states, the burden is on the injured or ill worker to prove the causal connection. In Illinois, at this time, the burden will be on the employer to rebut this presumption that the causation exists.
In Illinois and other states, attorneys representing injured workers should evaluate whether there may be new expanded coverage in their state for their clients who contract COVID-19 as a result of employment-related activities. They should consider whether such coverage may exist under the respective state’s Workers’ Compensation statutes or any other state law that may apply.
Some states, like Illinois, also have an Occupational Diseases Act which could be applicable, and if so, would pay benefits based on rates established under the applicable version of Illinois’ Worker’s Compensation Act.
Changes in Workers’ Compensation and Liability Cases
COVID-19 has driven changes that affected both the Workers’ Compensation and Liability industries outside of state and local government regulation. For additional information how the Workers’ Compensation industry has been affected please click here, and to find out how the Liability industry has been affected follow this link.
We hope each of you stays safe at this time. Medivest is fully functional during this period and ready to assist parties with MSP compliance and lien resolution services. For assistance in these matters please call us at 1.877.725.2467 or contact us here.
