WC Opt Outs and MSAs
In a recent blog post by Bob Wilson at WorkersCompensation.com [http://www.workerscompensation.com/compnewsnetwork/from-bobs-cluttered-desk/22602-federal-intervention-in-workers%E2%80%99-comp-will-opt-out-be-the-final-straw.html] about the opt out movement across the nation, he cautioned that federal intervention is probably not the solution to the workers’ compensation problem, citing the CMS oversight of MSAs as a prime example of why. But what I found interesting was that Bob likely arrived at that correlation based solely upon the total insanity that is the CMS WCMSA program rather than the reality that some of these proposed opt out provisions are not without MSA ties. Because CMS apparently believes that the egg-shell plaintiff theory applies to all insurance claims and that if you ever pay for any treatment even once that you own that injury forever, some of the opt outs are trying to implement lifetime spending limits so that when it comes time to do an MSA, you are not paying for all current treatment and contingencies in perpetuity with no exceptions. Another plan proposes to wrap benefits around “current employment status” and clearly defines a situation where Medicare is to be primary when a Medicare eligible claimant is not in current employment status. Why even mention Medicare in state WC legislation if not your intent to coordinate benefits to your favor? So perhaps those 10 prolific ranking Democrats should investigate the federal government’s likely role in the opt out movement because clearly CMS’ bad behavior with regard to MSAs was a consideration in the drafting of these proposals.
As with all attempts to reduce the impact MSAs have on claim settlements, I can’t help but caution our state legislators to not lose sight of crossing that fine line as to what the feds may consider the intentional shifting the of burden of long term care of work injuries to Medicare. I absolutely, whole heartedly believe that there is no Medicare Secondary Payer exclusion where there is no underlying state law obligation to make payment, particularly in the case of state workers’ compensation laws protected from federal intervention by the 10th Amendment of the U.S. Constitution. However in cases where the state law is purposefully written to arbitrarily end the payment obligations regardless of the state of the injury, such as the 400 week limit in Georgia, the Supremacy Clause may come into play and federal laws such as the MSP would supersede such provisions. Even without the Supremacy Clause, CMS is already empowered by 42 CFR 411.46 to disregard any work comp settlement that intentionally attempts to shift the burden to Medicare. So why poke the bear when we don’t have to with regard to at least the issue of MSAs.
Given that the theme here is opt out, my primary reaction spurred by all of the recent media buzz is if so many employers are willing to embrace state opt out proposals, taking control of an entity’s entire work comp obligation outside the state program, then why are more not willing to simply opt out of CMS’ voluntary WCMSA approval program? It is entirely voluntary without so much as a state or federal law or regulation mandating or controlling it. No legislation needs to be written and passed to simply not participate and in doing so, all of the costly unreasonable mandates created by CMS can be easily resolved. Rather than the attempts at writing arbitrary benefit limits into the state laws or opt out plans that harm only those truly in need of lifetime care, simply own your responsibilities to those same injured workers without CMS involvement and come up with other creative ways to provide for post-settlement medical care. Use your captives, buy insurance, find prepaid medical plans – do anything other than ask CMS how much to set-aside and then put that into the hands of the injured worker and hope for the best. So long as Medicare never makes a related payment, CMS does not care what you did to address the issue of future medicals. Implement programs that achieve that goal and that will be one less complaint the industry would have about the work comp system.