Orlando

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Unconventional threats to the workers' compensation system aremultiplying, ranging from Medicare set-aside hassles, torecession-related challenges, to employer's liabilitycomplications, experts warned at an industry conference here.

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Conflicts with Medicare are a particularly vexing problem forworkers' comp carriers when older workers are hurt, or whenlongtime injured employees become eligible for the program,according to Katie Fox, compliance and resolution manager for MSPMed Insights, a GAB Robins company.

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She and two other panelists were part of a panel on“unconventional threats” during the annual Workers' CompensationEducational Conference. The session was part of the National Trendsprogram put together by National Underwriter inpartnership with the WCEC organizers–the Florida Workers'Compensation Institute.

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Ms. Fox described problems caused when Medicare makesconditional payments for medical treatment of injured workers whoare Medicare-eligible but awaiting workers' comp settlement moniesto arrive.

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When those payments do come to pass, Medicare looks to recoverwhat it has shelled out, she explained. “If we pay, Medicaredoesn't want to pay,” she noted.

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Ms. Fox said great care must be taken with the drafting ofsettlement agreements with set asides to ensure that the recipientpays what is owed to Medicare. If the money is not paid by thebeneficiary, Medicare authorities “can come after whomever theywant,” dunning insurers or third-party administrators, sheadded.

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What's more, Ms. Fox warned that improperly reporting the statusof a claim by a Medicare-eligible worker can result in a fine of$1,000 a day.

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Settlements of more than $25,000 require notification for anyonewithin 30 months of qualifying for Medicare, she pointed out.

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Kathy Kukor, senior consultant at Risk International Services,defined employer's liability insurance as coverage for liabilityfor bodily injury (by accident or disease) to employees, occurringwithin the scope of their employment, when that liability is notcovered by workers' comp.

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Such policies are not state mandated, so coverage is defined bythe policy language, which she said employers should make sure isclearly written to reduce ambiguity in claims-execution.

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Among her other advice, she said employers should try tonegotiate away exclusions for punitive damages, give all policies acareful read, and “know what you've got.”

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Ms. Kukor said employer negligence and unsafe working conditionsare the most common fuel for liability claims.

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Employer liability claims have been on the rise in 2008 and2009, driven in part by legal action that has meant a deteriorationof the workers' comp system as the exclusive remedy for injurycompensation, she noted

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She closed her presentation by projecting a slide that warned:“Our best advice…Prepare now for the next wave of litigation.”

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Darrell Brown, U.S. workers' compensation practice leader atSedgwick Claims Management Systems, reviewing litigation trends,warned about the fallout of a Michigan case, Brown vs.Cassens, that the U.S. Supreme Court has allowed toproceed.

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In this case, lawyers for workers' comp claimants brought acivil racketeering case against an employer and a third-partyadministrator. The plaintiffs allege that the defendants conspiredto pay unqualified doctors to give fraudulent medical opinionssupporting denial of workers' comp benefits.

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Mr. Brown also mentioned problems brought on by therecession–for example, how to deal with a workers' comp claim froman employee who no longer has a job to which to return.

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