Experts Detail Perils To Comp Insurers

NU Online News Service, Aug. 18, 1:30 p.m. EDT

ORLANDO, FLA.--Unconventional threats to the workers' compensation system, ranging from Medicare system red tape to recession problems to employers liability difficulties, are multiplying, experts said at an industry conference here.

The warnings came from three panelists during presentations at the Workers Compensation Educational Conference presented by the Florida Workers' Compensation Institute in partnership with The National Underwriter Company.

Speaking at the session were Katie Fox, compliance and resolution manager for MSP Med Insights; Kathy Kukor, senior consultant at Risk International Services; and Darrell Brown, U.S. workers' compensation practice leader at Sedgwick CMS.

Ms. Fox described problems that are caused when Medicare makes conditional payments for medical treatment of injured workers who are Medicare eligible but awaiting workers' comp settlement monies to arrive.

When those payments do come to pass, Medicare looks to recover what it has shelled out, she explained. "If we pay, Medicare doesn't want to pay."

Ms. Fox said great care must be taken with the drafting of comp settlement agreements with set asides to ensure that the recipient pays what is owed to Medicare.

If the money is not paid by the beneficiary, Medicare authorities "can come after whomever they want," dunning insurers or third-party administrators, she said.

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

Settlements of more than $25,000 require notification for anyone within 30 months of qualifying for Medicare.

Ms. Kukor defined liability insurance as employers' coverage for liability for bodily injury (by accident or disease) to employees, occurring within the scope of their employment, when that liability is not covered by workers' comp.

Such policies are not state mandated, so coverage is defined by the policy language, which she said employers should make sure is clearly written, to reduce ambiguity.

Among her other advice, she said employers should try and negotiate away exclusions for punitive damages, give all policies a careful read and "know what you've got."

Ms. Kukor said employer negligence and unsafe work conditions are the most common fuel for employers' liability claims.

In 2008 and 2009, she said employer liability claims have been on the rise, driven in part by legal action that has meant a deterioration of the workers' comp system as the exclusive legal remedy for workers claiming injury.

She closed her presentation by projecting a slide that warned, "Our best advice...prepare now for the next wave of litigation."

On the topic of litigation, Mr. Brown warned of impacts of a Michigan case, Brown vs. Cassens, that the U.S. Supreme Court has allowed to proceed. In this case, lawyers for workers' comp claimants have brought a civil racketeering case against an employer and a third-party administrator.

The plaintiffs allege that the defendants conspired to pay unqualified doctors to give fraudulent medical opinions supporting denial of comp benefits.

Mr. Brown mentioned problems brought on by the recession, concerning how to deal with a comp claim from a worker who no longer has a job to return to.