Group Bids To Unsnarl Medicare Comp Impact

Eric Oxfeld, president of UWC, Strategic Services on Unemployment & Workers' Compensation–a business group that is part of a coalition pushing for changes–explained that Medicare has instituted procedures requiring workers or insurers who reach a workers' comp settlement to notify and obtain approval from Medicare if they are eligible for the government healthcare benefit.

The agency's concern is that if the settlement does not set aside a sufficient amount for medical care, the claimant might eventually file a claim with Medicare for treatment of a workplace injury that should be covered by workers' comp.

Settlements, which must also have state regulatory approval, are generally reached in cases where there are disputes over appropriate care or whether some or any of the injury is work related. Such agreements give insurers a final figure for a claim and give the worker a complete picture of what their award will be.

According to Mr. Oxfeld, Medicare has aggressively involved itself, but the system "doesn't have the staff to handle this and they haven't gotten clear guidance on what amount is adequate."

As a result, he said, settlements have been held up for as long as a year, and in many cases the parties to the settlement have to pay for consultants and advisors to provide assurances that Medicare's interests are protected.

Medicare demands sometimes actually reduce the amount a worker would receive, he added. In some cases, the demand for a set-aside may be more than double the indemnity in the settlement agreed on, according to Mr. Oxfeld.

If the settlement fails to meet Medicare standards, workers can lose benefits, attorneys can be sued for malpractice and everyone–workers, employers and insurers–are at risk of having to pay Medicare double, according to Mr. Oxfeld.

This, he said, has produced "a nightmare for everyone in the comp system" and a rare confluence of interests among attorneys, insurers and employers.

As a result, the American Bar Association's House of Delegates, made up of representatives from bar groups throughout the nation, has passed a resolution urging Congress to make more than a dozen changes in the present system. Among the changes they call for is that the Centers for Medicare & Medicare Services (CMS) justify and clarify their procedures, meet a deadline to approve a settlement or lose their say in it.

Other points include barring CMS from determining or adjudicating the amount any primary payer owes, and requiring the cost of protecting Medicare's interest and the expense of getting CMS approval to be funded from money allocated for Medicare.

Mr. Oxfeld said that the coalition working for changes, in addition to the UWC, include the American Insurance Association and various self-insured employers, as well as attorneys for injured workers and insurers. At this point, he said, efforts towards legislation involve informal talks with members of Congress from both parties.

Peter Ashkenaz, a representative for CMS in Washington, said in an e-mail that the agency "agrees with many of industry's concerns and issues, and we continually address those issues."

For instance, he noted, "we recognized the difficulty in using medical-inflation factors to calculate the WC Medicare Set-Aside Arrangement, so we discontinued the use of that requirement. We are striving to provide a CMS review decision within a 60-day timeframe and have hired a contractor to help us reach that goal."

He added that CMS listens "very carefully to the workers' comp industry and makes every effort to operationalize policy with both the beneficiary and the industry in mind."