Medicare expands resolution options to include a new Medicare repayment program for small settlements or judgments. This program will be available starting in February 2012 and applies to cases settling for $25,000 or less.  Under this program, Medicare will provide final conditional payment amounts before settlement under certain circumstances.  This program has the potential to revolutionize the settlement process for many Medicare beneficiaries, their counsel, and settling parties.  The foundation of that process is to start the verification process early.  

Recently, the Centers for Medicare and Medicaid Services (“Medicare”) released guidance (the “Alert”) relevant to conditional payment reimbursement under the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. §1395y(b)(2)).  This guidance permits certain Medicare beneficiaries to receive a final conditional payment amount from Medicare prior to date of settlement.  Historically, Medicare’s conditional payment reimbursement process has not allowed a Medicare beneficiary or settling parties from obtaining such information from Medicare or its recovery contractors.
 
Under this small settlement option, for a Medicare beneficiary to obtain a final conditional payment amount prior to settlement, the fact pattern must meet all of the following criteria:

1. The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
2. The total liability settlement, judgment, award, or other payment will be $25,000 or less;
3. The Date of Incident occurred at least six months before the beneficiary or representative submits the proposed conditional payment amount to Medicare; and
4. The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare.

If the case meets all of these qualifying criteria, then Medicare, through its recovery contractor, the Medicare Secondary Payer Recovery Contractor (“MSPRC”), will provide a final conditional payment amount prior to settlement.  This final conditional payment amount provided by the MSPRC will only be valid if the Medicare beneficiary settles a claim within sixty (60) days of the date of Medicare’s response.  According to MSPRC, this option will be available to Medicare beneficiaries starting in February 2012, and will effectively allow Medicare’s related claims to be identified pre-settlement.  While the process has not been fully defined, it is likely that once settlement is finalized, the process of requesting a final demand amount from Medicare (by providing gross settlement amount, fees, costs and expenses) will remain the same, regardless of whether this small settlement resolution program has been utilized.

Starting the Medicare repayment process early provides the best opportunity to comply with all Medicare Secondary Payer obligations while expediting the case.  Medicare’s 2012 small settlement resolution program reinforces the need to START EARLY!  To take advantage of this program in a $25,000 or less case means needing to know if an individual is Medicare enrolled, and if so, how much in medical expenses has Medicare paid conditionally.  Having a formalized settlement process that integrates these core concepts will achieve efficiencies and enhance the effectiveness in settlement proceedings.  Such a formalized settlement process should include an analysis of the applicability of this small settlement resolution program.  Thus, screening a case/claim up front to verify entitlement, establishing a tort recovery record with Medicare early in the process and obtaining the first conditional payment letter from Medicare (all as part of a formalized settlement process) and resolution path is the proper path to take advantage of this small settlement resolution program.  Although Medicare currently does not intend to include exposure, ingestion or implantation cases in this program, the Alert identifies that this will be a work in progress.  As a result, if this program creates the intended results that benefit the settling parties, taxpayers and the Medicare program, an extension of this program in 2013 may not be out of the question. 

Medicare intends to issue additional guidance on how to participate in this program in January 2012.  The DRI MSP Task Force will provide further program details once they have been released.  Until then, we continue to stress the importance of verifying Medicare enrollment as early in the settlement process as possible, as that information will better define the scope of the settlement continuum; from reimbursement to reporting to potential future cost of care issues.

CMS Announcements on Fixed Percentage Option for Settlements of $5,000 or less, $300 Threshold Limit for Reimbursement, and Identification of Contractor for Medicare Secondary Payer Recovery

The Centers for Medicare and Medicaid Services (“CMS”) posted an alert (the “Alert”) that confirms that there has been an extension, in certain cases, of the reporting trigger date for Mandatory Insurer Reporting (“MIR”) under Section 111 of the MMSEA.  The Alert provides the new trigger dates based on gross settlement/judgment/other payment (“TPOC”)  values for claims as follows:

On September 23, 2011 the MSPRC announced that it would be adding a Self Service Information Feature to its current Customer Service Line that will provide automated conditional payment information over the telephone. It is scheduled to go live on September 30, 2011. The announcement suggests the advantages of the new telephone feature would be:

We find that it raises more questions than it answers. For example:

More information was promised although none has been received to date. We will keep you up to date as we receive the information.

It is rare for the paths of workers’ compensation and “The Worldwide Leader in Sports” to cross.  But that is exactly what happened over the last few months within the NFL labor dispute.  As the video of non-sanctioned player workouts rolled, and the bottom line “tweets” from players, owners, NFLPA reps, and the Commissioner scrolled, one of the major battles in the back room negotiations was the often overlooked issue of professional sports workers’ compensation claims. 

Typical of the workers’ compensation field, the issue was not flashy or headline grabbing.  Rather, it was more of a “where the rubber meets the road” point of contention.  At the crux of the battle was jurisdiction for injured players filing workers’ compensation claims, i.e., where can a player file his workers’ compensation claim.  The owners were fresh off an adverse federal court ruling in early 2011 which restricted the teams’ offset and reimbursement rights for team provided benefits and salaries when workers’ compensation benefits were also paid to injured players.  No doubt this intensified the owners’ desire to restrict the jurisdictions available to players for workers’ compensation benefits.  Conversely, the players refused to give ground on the workers’ compensation jurisdictional issue.  According to Super Bowl MVP Drew Brees, “ [we] will never let [the league] restrict our health and safety long term.”  

The NFL collective bargaining negotiations were taking place in Washington, D.C., but the epicenter of the debate was located clear across the nation in the State of California. Workers’ compensation legislation varies throughout our fifty states, and as a result, state specific benefits provided to injured workers also vary.  Some states pay higher monetary benefit rates, while others provide longer or more comprehensive medical benefit coverage.  It seems that California has both more lucrative monetary benefits and more comprehensive medical benefit coverage.  Plus, California has a very low jurisdictional threshold for filing a workers’ compensation claim.  In fact, it is reported that an NFL player who has played a game in California, even though an injury may not have occurred within that particular game, may still file a workers’ compensation lawsuit in California.  This is unlike many states where for jurisdiction to be proper there must be principal localization of employment which has as an element some degree of foreseeable future work performance. 

California and Florida currently share the highest number of professional football teams, each with three.  With professional football teams in San Francisco, San Diego, and Oakland, the comparatively high number of California team “home” games potentially expose numerous visiting franchises to literally hundreds of California workers’ compensation claims each season.  

With the low jurisdictional requirements, liberal monetary benefits and employee (and thus NFL player) friendly medical benefits, it is not surprising that team owners outside California want to restrict the locations of workers’ compensation claims.  Even if your local pro football team is located in a state where workers’ compensation benefits are more favorable to employers in general, the team will still have the added exposure for claims in a less favorable jurisdiction, such as California. The end result is a higher expense for providing workers’ compensation coverage in other states, like California. 

Ultimately, Drew Brees and the NFLPA were able to run out the clock in the collective bargaining negotiations (the new CBA does not include any restriction of workers’ comp claim locations) thus securing what will surely be hailed as an important victory for injured NFL players.  As the injury claims for repeat impact trauma and concussions with resulting mental and physical deficits increase, this will likely be a very significant and costly issue for the league.  The owners are not through fighting, though.  California legislation is currently in the works to close the jurisdictional loopholes which are being utilized by NFL players for workers’ compensation claims.  

No doubt, you will be hard pressed to find the final outcome of this issue on any SportsCenter broadcast.  But that doesn’t decrease the importance of this issue for NFL owners or regular employers throughout the nation.

Jonathan L. Berryhill, Esq. is the managing partner of Wilson & Berryhill, P.C., a Birmingham, Alabama defense litigation firm.  His practice centers on representation of employers, self-insurer funds, and insurers in all aspects of work related injuries and claims.  He is an active member of DRI and its Workers’ Compensation section, and also serves as the Vice Chair for the Workers’ Compensation Section of the Alabama State Bar.  You may contact Jonathan through the firm’s website at www.wilsonberryhill.com.

As was recently reported, tomorrow a federal district court in California will consider whether the Wal-Mart v. Dukes class action lawsuit recently reversed and remanded by the U.S. Supreme Court may proceed in the form of multiple class action lawsuits involving narrower classes.

On June 20, 2011, the Supreme Court issued its opinion in Wal-Mart v. Dukes. That decision, among other things, held that the proposed nationwide class of some 1.5 million female employees was not consistent with Rule 23(a) of the Federal Rules of Civil Procedure. Specifically, the Court concluded that Rule 23(a)(2) requires a party seeking class certification to prove that the class has common questions of law or fact, i.e., the claims must depend upon a common contention of such a nature that it is capable of classwide resolution. On remand, an open question remains whether the commonality requirement can be met if the gargantuan class action is broken down into hundreds if not thousands of smaller class actions.

Where do trial courts go after Wal-Mart v. Dukes? What do the "new and improved" classes look like if they are to pass the standard announced by the Supreme Court? As a matter of policy, what is the right outcome for our system of justice?

It is interesting that on the anniversary of the implementation of workers’ compensation in the United States, the State of Illinois is attracting national attention for a bill which proposes to abolish the workers’ compensation statute in that state.  A bill introduced by Senator Brady proposes to repeal the workers’ compensation statute and revert to a system seen in the early 1900s in which disputes between employees and employers following work place injuries would be litigated in the circuit court. In reality, most observers of the Illinois Workers’ Compensation system recognize this bill as unlikely to pass.  Although Senator Brady has stated he is serious about the content of his bill, most see the proposal as an effort at political posturing intended to force real discussion on workers’ compensation reform.

Beginning in late 2010, significant discussion on revisions to the workers’ compensation statute developed in large part due to the out of proportion expense incurred by Illinois employers when compared to employers in other states.  Active discussion continues on proposed changes in legislation and a bill introduced by Governor Quinn is rumored to be the subject of a vote soon.  The proposed bill from the Governor includes some administrative changes intended to increase accountability of the Workers’ Compensation Commission, and from a substantive standpoint includes proposals such as:

- Caps on carpal tunnel disability payments
- Reduction of temporary total and permanent partial disability rates to pre 2005 levels
- Denial of claims by intoxicated workers
- Capping wage differential awards at age 67, or five years post accident, whichever is later, as opposed to life
- Increased utilization review of physical therapy, occupational therapy, and chiropractic treatment

Other proposals which are part of the reform discussion in Illinois include the implementation of AMA guidelines for purposes of determining disability ratings, a change in the causation standard to require that the work injury be the primary cause, and reduction in medical fee schedule amounts. 

While it is unlikely that Illinois will abolish workers’ compensation, it is appearing likely that reform which will include some or all of the above proposals will occur in the near future.  The Illinois political process is such that it would be unwise to make any strong predictions as to the ultimate outcome, but chances are very good Illinois will remain in the modern world with continuation of its workers’ compensation statute.

Attorney Bill Pipkin & Robert Lewis of Crowe Paradis Services started off the morning with a thorough review of Medicare Set Aside provisions and their real life application in the WC world. New to the mix in 2010 will be a duty under §111 on employers/insurers/self-insurers to “self-report” WC claimants who are already receiving Medicare benefits.

A comprehensive review of state specific and federal challenges to benefits sought by illegal aliens was provided in the day’s second segment by Attorney David Wilson. In addition, David provided a nationally scoped state-by-state analysis of outcomes in challenged claims made by undocumented workers.

In the seminar’s last segment, sniffing out bogus claims, hilarious videos from real surveillance efforts were juxtaposed against practical pitfalls for both claims handlers and defense counsel. Steve Cassell of RSight Investigation shared his approach to surveillance efforts and his interpretation of the outcomes therefrom. Attorney Jeff Napolitano addressed the use of surveillance in WC claims before and during the legal process. Steve and Jeff were assisted by WC Committee Chair George Kagan in applying this segment's information and material to current defense files.

Now departing the 2nd Annual DRI National WC Review. Had a wonderful time; good food, good presentations, and good marketing opportunities. Got some CLEs, caught up with existing clients & DRI members, and spent some valuable face time with prospective clients. This event really offers everything you could want. Hope to see you next year.

To the backdrop of roaring thunder from tropical storm Ana, Robert Lewis and Bill Pipkin gave life to acronym hell--MSAs and Section 111 Reporting. I have not heard a more informative and knowledgeable talk on the subject. The WC Committee has and continues to lead the way on this subject.

With his usual dry wit and thorough knowledge, David Wilson told us how to respond to and perhaps reduce exposure in undocumented worker cases.

George Kagan, Steve Cassell and Jeff Napolitano brought to life what the FBI calls one of the Top 10 domestic threats, post-9/11: Insurance Fraud. We learned how to use a reasonable and unobtrusive investigation in an ethical and legal way to prove your case. Investigation videos are always a hoot, and sometimes helpful.

Many thanks to Craig Young, Jonathan Berryhill, George Kagan and all the usual suspects for putting on the class show of the week.

DRI's event concluded, FWCI's evidenced-base medicine was the order for the rest of the day. This too, is a DRI WC Committee top subject.

As expected, this is a great networking opportunity. Spent Monday evening at the bar of Tuscany Ristorante sharing food and wine with all who gathered there. The Banfi Cum Laude (as close as I ever got to those last two words) and the Cortona Syrah were the favorites. The rack of lamb rocked.

Wednesday, Bobby Stokes and I will head up the Texas Breakout Sessions for the FWCI. You should be here for the medical eBilling discussion. It's coming soon to a state near you. Our good friends from Aon and American Airlines, Mary Reed and Misty Hambright, respectively, will lead the employer's perspective session. Good stuff.

Well, the first day of DRI's 2nd annual WC Nat'l Review is drawing to a close. Heading back to the convention complex to catch Eddie Money in concert following the conference provided buffet dinner. Day 1 was a resounding success.

Craig Young, the seminar subcommittee chair, led off with a welcome to Orlando for attendees, and George Kagan, the WC committee chair filled in the blanks. The DRI seminar drew attendees from across the nation, emphasizing DRI & the Workers' Compensation Educational Committee's (WCEC; the DRI conference is partnered with them) theme that this ain't just for Florida folks anymore.

The opening segment featured "avoiding catastrophic claims from minor injuries." It was well attended and very thought provoking due in large part to the evidence based approach to medicine advocated by Drs. Nguyen and Randolph. Key to their presentation was an explanation of the Bradford-Hill Criteria for medical treatment, applying scientific principles to medicine. The attorneys on the panel, Bob Erlandson, Steve Habash, and Cristine Huffine translated the medical theory and evidence-based approach into practical application opportunities.

In the second segment, neuropsych Robert Barth, Ph.D. provided a fast hitting but informative list of 10 fundamental rules for attacking psychological claims. Dr. Barth also shared a website, www.asnr.org nomenclature, that defense counsel can use to decipher medical lingo on MRI & CT/myleogram reports. He shared the segment with attorney Susan Briggs, who counseled on the different approaches she's employed in defending psychological claims.

The last segment of the day was the industry panel, featuring attorney JC Roper along with Robert Johnson (McDonald's Corp) and Randy Fort (Meadowbrook). Many national topics were covered, stretching from incentivized return to work programs to developing and maintaining your defense practice, all with consideration of these trying economic times.

Time for dinner and some dancing.