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New federal legislation would ease employer and insurer administrative frustrations and more quickly close workers compensation medical claims that require set-aside amounts to meet federal Medicare secondary payer laws, experts say.
The current system--which prevents closing certain state-regulated medical workers comp claims until claims set-aside amounts are approved by the U.S. Centers for Medicare and Medicaid Services--is plagued by confusion and months-long delays, the Coalition for Medicare Secondary Payer Reform said last week.
While the federal agency says it aims to complete Medicare set-aside reviews in 60 days, some cases have taken up to two years to resolve, said Melissa Shelk, vp of federal affairs for the American Insurance Assn. in Washington.
According to the coalition of employers, insurers and claimants' attorneys, the delays leave injured workers in limbo and their claims unpaid, the coalition said.
Employers and insurers complain that CMS lacks formal rules, so its decisions often vary and can change without warning. That leaves employers and insurers confused. Obtaining clarification about CMS decisions adds to the delays.
One substantial problem for employers results from differences in how state workers comp systems and the CMS calculate medical claim costs, said Douglas Holmes, president of the Washington-based business group UWC-Strategic Services on Unemployment and Workers' Compensation.
Workers comp claimants and employers or their insurers settle medical claims according to state guidelines, which usually require paying medical expenses only until the claimant recovers.
In contrast, Medicare budgets for medical care for a much longer time period because the typical claimant's age means their recovery may stretch out indefinitely, said Mr. Holmes, who is also the coalition's coordinator.
"So there ends up being confusion about which standard applies" when determining set-asides, Mr. Holmes said (see sidebar, page 19). "We need some certainty about what portion of the settlement is derived through the state work comp system and what portion of that is going to be set aside for Medicare because, until (employers) know what that is, they can't complete the settlement."
Coalition members also take issue with the CMS' appeals process.
"If you get into a dispute about the right amount (set aside), you just keep going round and round," Ms. Shelk said.
The coalition also says, even once a claim has been settled, the federal agency can seek more funds from employers, insurers and even the claimant.
CMS did not return a telephone call seeking comment.
The coalition supports the Medicare Secondary Payer and Workers' Compensation Settlement Act of 2007--H.R. 2549--that was introduced in the U.S. House of Representatives by Reps. John Tanner, D-Tenn., and Phil English, R-Pa., May 25. The legislation would "speed up the process a lot," said Jill Dulich, senior director of Marriott International Inc.'s Claims Services in Santa Ana, Calif.
Among other steps, the proposed law would:
Currently, an injured employee can self-administer" the set-aside funds, which should be placed in an interest bearing account, or the employee can hire a third party to do so, observers say.