Archive for February, 2010

The Medicare Secondary Payer Statute: In Search of Ariadne’s Thread

Monday, February 8th, 2010

In Greek mythology, Daedalus built the Labyrinth for King Minos of Knossos to contain the awful half bull/half man Minotaur. Theseus eventually killed the Minotaur, but only found his way out of the Labyrinth because Ariadne had given him a magic thread to mark his way in and out of the maze. I’m beginning to think that American health care makes the Labyrinth look like an easy walk across Boston Common on a sunny day. And, so far at least, no one seems to have found the magic thread.
Workers’ compensation medical care is now getting whipsawed by two powerful and unstoppable forces: the Medicare Secondary Payer Statute (MSP) and the inexorable aging of the baby boomer generation.
We’ve written about these two looming catastrophes in the past. Seventy-eight million baby boomers are hard to ignore, and the MSP issue is starting to remind me of the 1958 horror movie, The Blob , wherein a gelatinous creature grew gargantuan by eating everything in its path. Two things have already occurred in the new year that bode well for continued growth of the MSP Blob.
The insurance industry goes a-begging
Last week the American Insurance Association, the National Association of Mutual Insurance Companies and the Self-Insurance Institute of America wrote to the Department of Health and Human Services Secretary Kathleen Sibelius asking her to delay the 1 April 2010 implementation of MSP mandatory reporting requirements. You can find the reporting requirements here.
The new regs lay a heavy burden on the comp insurance industry, referred to in the regs as Responsible Reporting Entities (RREs). (Such unfortunate acronyms bring me back, alas, to my days in the military.) RREs must report to the Centers for Medicare and Medicaid Services (CMS) any workers’ compensation claims that involve ongoing medical payments, with the exception of most medical only claims. In their letter, the organizations list five reasons they believe an implementation delay is necessary. The first items are all about process: security protection, a lack of guidance from the CMS and an insufficient period for testing the proposed reporting procedures. The fifth reason, which is really the first reason, is the economic big stick which, when deadlines are missed, will slap fines of up to $1,000 per day per claim upside the heads of RREs. Ouch!
There’s a lot more to it, and we’ll be writing more about it in the coming months, but for now it’s enough to know that the insurance industry is on its collective knees asking for a delay in the implementation of reporting requirements that have already been delayed and extended once.
Inedible Maryland Crabcake?
The second thing affecting MSP that happened in the new year may or may not turn out to be a big deal. On 4 January 2010, the Maryland Workers’ Compensation Commission issued emergency regulations that require CMS approval for all workers’ compensation settlements, not just the ones that meet the review thresholds in the CMS User Guide, version 2.0. The commission is requiring CMS review of virtually every claim up for settlement.
The new procedures require that every settlement pass through CMS before the Commission will approve it. Here is an excerpt from Maryland’s emergency regulations:

A settlement that falls within the Medicare thresholds must be approved by CMS before it will be approved by the Commission.

A settlement the falls outside the Medicare thresholds may be approved by the Commission provided that the settlement agreement:

1. Contains a statement confirming that the interests of Medicare have been considered in reaching the settlement; and

2. Identifies the amount of the proposed settlement:

a. Apportioned to future medical expenses;or

b. Set-aside for future medical expenses through a formal set-aside allocation

3. The apportionment of the amount of the settlement associated with future medical expenses shall be supported by medical evidence such as a medical opinion or evaluation.

While it remains to be seen if the Commission’s action will significantly delay settlements or increase costs in Maryland, it’s reasonable to assume that it will. As any workers’ compensation professional knows, the longer a claim stays open, the more it costs. As a result, the Maryland approach to Medicare set asides is not a good candidate for replication in other states.
A Magic Thread
As I write this, I’m about to leave for San Antonio for the 2010 Health and Productivity Forum, sponsored by the Integrated Benefits Institute and the National Business Coalition on Health. I’ll be participating in a panel discussion organized and led by Broadspire’s Gary Anderberg, one of the smartest people I know. Our panel will be addressing workers’ compensation medical care and costs and the effect health care reform may have on both. I sure hope that Gary has brought a few spools of Ariadne’s thread. We’re going to need some magic to guide us through this formidable labyrinth.

Health Wonk Review and other news briefs

Friday, February 5th, 2010

Get the latest scoop from the health policy blogosphere at this week’s excellent “Health Wonk Review – so what do we do now?” edition. Joe Paduda at Managed Care Matters is our most capable host this week. Kudos to Joe, who is the visionary and founder of Health Wonk Review, a biweekly compendium of best posts from more than 80 participating health policy bloggers, journalists, and organizations. It’s been a particularly useful guidepost to the health care reform efforts.
Happy birthday to RIMS – RIMS is celebrating its 60th anniversary as an organization this year. You can look back at the 60 year-history in the current issue of Risk Management, which now is available in digital editions. The current January/February issue also includes articles on the the soft property/casualty market continuing in 2010, a multi-generational perspective on communication, steps to avoid when investigating an employee for fraud, and steps to reduce stress.
Mea culpa, medical styleWhat happens when doctors who err say they are sorry to their patients? Kevin O’Reilly examines the issues surrounding medical disclosure and apologies when things go wrong in an article in American Medical News. Thirty-five states have laws offering some kind of legal protection for physicians who express regret or empathy to patients who experience an adverse event, and some hospitals that have adopted “I’m sorry” policies have experienced drops in both the numbers and costs of claims. But in looking at some of the legal issues, some attorneys counsel caution. Thanks to David Harlow of HealthBlawg for pointing us to this interesting article, in which he is quoted.
Social networking – At the LinkedIn Workers’ Compensation Forum, there have been some lively discussions this week . One on an Illinois Supreme Court ruling which found that an employer is liable for continued TTD benefits to an employee who was accommodated on light duty and terminated for cause, and another on proposed Colorado legislation that would put limits on an employer’s ability to spy on employees in workers’ comp cases.
Preventing retail fatalities – There has been a decade-long drop in the number of retail workers who died as a result of workplace violence – from 286 in 1998 to 167 in 2007. Of that number, nearly half were employed in late-night establishments: 39 in convenience stores, 32 in gas stations, and 7 in liquor stores. OSHA has updated its guidance for prevention: Recommendations for Workplace Violence Prevention Programs in Late-Night Retail Establishments.
Manufacturing declines – At Comp Time, Roberto Ceniceros looks at the the steep downward slope of manufacturing jobs in California and in the nation, and raises the question of this decline’s long term impact on workers comp premium production and services.
Workplace wellness – The Health Affairs blog recently featured a pair of posts on workplace wellness programs. Jaan Sidorov makes the case for why wellness incentives belong in the workplace. In response, Alec Balch examines more issues surrounding incentives: whether financial rewards and penalties should be tied to an employee’s coinsurance premiums, and to what extent incentives should be based on the employees ability to meet certain health standards vs wellness program participation.
Regulatory forecast – A rundown of the U.S. Department of Labor’s (DOL) regulatory agenda for 2010 is available on Human Resources News. There’s a strong emphasis on safety. Thanks to HRhero for the pointer.
Case law – Featured on the LexisNexis Workers’ Compensation Law CenterThe Top 10 Bizarre Workers’ Comp Cases for 2009 makes for a fascinating read.
Bad employee of the month – we offer our nominee. She will just have to try harder if she wants to earn a slot in the Insurance Fraud Hall of Shame – the class of 2009 features some rather egregious offenders.

Toyota: Hands Off!

Wednesday, February 3rd, 2010

Toyota, the world’s largest automaker, is in the midst of a public relations nightmare. Over two million vehicles have been recalled for a problem with acceleration: gas pedals are prone to sticking, which leads to unstoppable cars hurtling along at high speeds. For months, Toyota denied that there was a problem. Well, there is no denying it now. U.S. Transportation Secretary Ray Lahood has advised owners of the vehicles not to drive them. [Update: he is backpedaling from his statement.]That’s over two million people who are not supposed to drive for the foreseeable future. With all due respect, Mr. Secretary, in this culture where the automobile is less a luxury than an essential, what are these millions of drivers supposed to do?
For the sake of clarity, here are the specific vehicles with a pedal problem:
2007-10 Camry
2009-10 RAV4
2009-10 Corolla
2009-10 Matrix
2005-10 Avalon
2010 Highlander
2007-10 Tundra
2008-10 Sequoia
2004-09 Prius
2007-10 Tacoma
2009-10 Venza
We frequently blog the compelling issue of personal risk management: the myriad decisions we all make in mitigating risk and prolonging the chances of living to see another day. Well, we have here a crisis of huge proportions that confronts Toyota drivers with some very difficult decisions. In keeping with our usual mandate, we will try to focus primarily, but not exclusively, on the implications for workers comp.
At the head of the line are companies that operate Toyota fleets, or that have employees operating Toyotas leased by the employer. At this moment there are irrevocably immense liabilities in allowing employees to continue to drive the vehicles listed above. Of course, the usual “to and fro” issues prevail in determining whether employees injured in an accident are covered by workers comp. (Astute readers will recall that in California, anyone driving a company car is covered by comp 24/7.) But even where comp should be the “exclusive remedy,” employers are vulnerable to suits alleging “wilful intent” should they insist that Toyota drivers stay behind the wheel. Prudent risk managers will rent alternative vehicles until the Toyotas have been repaired.
For employees driving their own Toyotas, the “to and fro” rule prevails. However, what happens when an employee is “in the course and scope” of employment and gas pedal lock leads to an accident? Will the employer be held liable for the injuries to third parties? Should employers prohibit employees from driving the compromised Toyotas while working? If yes, how are these employees supposed to do their jobs? Who pays for the replacement vehicles?
Secretary Lahood has accelerated the risks associated with the Toyota recall. He has put the nation on notice than any use of the above vehicles entails unreasonable risk.
This all brings to mind a Toyota ad campaign from an earlier decade. The slogan was: “Get your hands on a Toyota. You’ll never let go.” I remember thinking at the time that there was a gruesome ambiguity to the wording. The image of a dead driver behind the wheel of a crushed vehicle rose up in my (admittedly hyper-active) imagination. Well, that slogan has come back to haunt the automotive giant. This is no time to put your hands on the wheel of a Toyota. Until this immanent hazard is addressed, it’s definitely time to let go.
We just noticed that Renaissance Alliance’s Consumer Insurance Blog has a post on what to do if you experience sudden acceleration – it includes a video and some tips from Consumer Reports – whether you own a Toyota or not, it’s a good safety skill to learn

Twitter feeds we recommend

Tuesday, February 2nd, 2010

For workers’ comp news and other links in between blog posts, we encourage you to follow @workcompinsider on Twitter. If you aren’t yet on Twitter, you may want to think about it. Even if you aren’t ready to engage, it can be a great way to follow industry buzz. You may already be following many blogs and news sources through RSS (syndicated) feeds via news readers – we do, too. But Twitter feeds add diversity and immediacy as well as the potential for engagement. You don’t have to have messages fed to your mobile devices, you can choose to follow folks on your Twitter home page or via a service like TweetDeck.
Here are just a few of the interesting Twitter feeds that we follow – most are insurance- or work-related:
@AIADC – The American Insurance Association “represents approximately 350 major insurance companies that provide all lines of property and casualty insurance”
@sthomas_eea – by Stephanie R Thomas, “economic/statistical expert & consultant specializing in employment issues”
@ijournal – daily insurance news headlines for the Property Casualty industry
@mashable – “The hottest Twitter news, Twitter tips and Twitter help”
@TheClaimsSPOT – Snippets from the blog of Marc Lanzkowsky, founder of Lanzko Consulting “Spotting process improvements & cost savings for claims & related orgs”
@ClaimsMagazine – by Eric Gilkey, Editor-in-Chief of Claims magazine
@safetycommunity – “the first online community created exclusively for the workplace safety industry,” hosted and maintained by the folks at Ansell Occupational Health
@HRHero – by Tony Kessler, Group Publisher at HRHero. Information on employment law for HR and business pros from law firms in all 50 states, D.C., and Canada
@MWConsultingLLC – a company that focuses on OSHA compliance through employee training and proficiency
@NIOSH – The National Institute for Occupational Safety and Health
@hpandpsafety – “Specialists in workplace safety with emphasis on maintaining OSHA compliance”
@OccHealthSafety – Occupational Health & Safety Magazine; Carla Saavedra, Jr. Web Editor
@Health_Affairs – “The Policy Journal of the Health Sphere”
@workforcenews – News about workforce management and HR issues from Workforce Management magazine
@fastompany – “empowers innovators to challenge convention and create the future of business”

One Toke Over the Line

Monday, February 1st, 2010

My colleague Julie Ferguson raised some fascinating issues relating to the growing movement to approve marijuana as a medication. As is so often the case, the implications for workers comp diverge substantially from general health issues. A toke may be just what the doctor ordered for pain management, but in the context of the workplace, any such prescriptions are likely to preclude actually reporting to work.
Here are just a few reasons why the use of medical marijuana is incompatible with the workplace:
– I cannot think of any job suitable for a person who is experiencing a marijuana high (actuaries? Just kidding)
– You cannot operate a motor vehicle or any piece of equipment safely while under the infuence of marijuana
– Imagine the impact on co-workers when a fellow employee lights up a joint. (“Note from a doctor. Yeah, right! By the way, who is your doctor?”)
– Smoking is prohibited by law in virtually all indoor workplaces. “Accommodating” a marijuana smoker by allowing him/her to light up outside of the building raises issues for co-workers and the general public, not to mention the police.
It will be very interesting to see how strongly state legislatures step in to protect medical marijuana users. As Julie pointed out, no state is currently requiring that employers offer “reasonable accommodation” in this situation; it is unlikely that any will do so. The day may come when marijuana makes the list of approved medications in the workers comp system, but prescriptions for weed are unlikely to be accompanied by a return-to-work release from the doctor.
Medical marijuana, along with alcoholic beverages and prescribed opiates, may be legal substances, but employees under their influence do not belong in the workplace. Employers should place the burden of proof squarely on the shoulders of the treating doctor, who must be able to certify in writing that the prescribed use of pot does not put the employee, co-workers and the public at risk for injury. Quite frankly, unless someone works from home, I don’t see how this burden of proof can be met. When it comes to performing a job safely, any toke is a toke over the line.