CMS Apportionment (California)

[vampireinthenight]

Now I love the feds and all, but this is something I have been biting on for a while but haven't gotten around to massaging it much. Admittedly, I have not delved into the federal law, so if some of you have, maybe you can enlighten a little.

How about apportionment of medical care when it comes to funding MSA?

Is there a federal law that prohibits it? We are all accustomed to the blanket assumption that it cannot be done in WC, but why not with set-asides? If a doctor can opine that 50% of a persons future medical treatment is due to non-industrial arthritis, why not apportion that amount out of the MSA? Theoretically, this would be treatment that Medicare would have had to provide whether or not there was an industrial injury.

Anyone want to chime in?

[stevepsca]

I don't see that it matters. The payment in a C&R for future medical, is based on the need of treatment on an industrial basis. That is all the ER/IC is paying the IW for... if there were no C&R, and no MSA, the treatment would be provided on an industrial basis. When IW seeks treatment to work injury, and the underlying condition is determined as 'compensable consequence', that becomes industrial based treatment.
The IW is assuming liabilty for all treatment post C&R, it's technically out of pocket to the IW, not Medicare. Those funds/MSA are there only to protect Medicare interests (where the ER/IC would normally have held liability) When the money is exhausted, Medicare is going to pay for all treatment anyway.

How do you know which symptom is being treated... the arthritis, or the cervical spine...? Do you treat the DDD in the morning, and the spine injury in the afternoon... ? Is the arthritis, or DDD onset due to the broken neck or herniated disk ?
Calculate the WCMSA funding based on the industrial medical needs. The basis for approval by CMS is their view and determination that Medicare interests have been protected. Basically, that the IW does't take a trip and shift liability to Medicare prematurly.

I've thrown this around since 1997 when I had to begin thinking about the day coming to address this issue. What I've found is it's up to the parties to submit a MSA proposal to CMS that will meet their threashold under the MSPA and protect Medicare interests... the rest of the conversation just doesn't matter. I've not seen a fed law/rule/memo that addresses an apportionment issue. I don't think it matters by the time CMS is to review a proposal. The only reason the potential treatment needs are spelled out in a proposal is to determine the potential costs. Post settlement, CMS doesn't care what the money is used for, as long as it's used for services Medicare would normally be responsible for.

This is from another bolg I've found informative from time to time...

The Medicare Secondary Payer ("MSP") program is not limited to conditional payments made prior to settlement or to an arbitrary group of workers' compensation settlements between $25,000 and $250,000, depending on Medicare entitlement. The MSP statute simply states that Medicare may not make payment for the medical treatment where another party is responsible. In most states, workers' compensation laws provide for lifetime medical treatment of work injuries; therefore, by law, Medicare should never make payment for any medical treatment related to a work injury, even after the claim is settled. In most liability settlements, an injured party is compensated for past as well as future medical treatment, once again alleviating the need for Medicare coverage of that injury. Because most everyone will become entitled to Medicare, either by attaining retirement age, receiving Social Security Disability Benefits for a certain period of time, or under special circumstances such as developing end stage renal disease, Medicare has exposure in nearly every insurance claim settled. Hence, all parties to any insurance settlement should be aware of the need for a Medicare Set-Aside allocation.
http://medicaresetasideblog.com/2008/04 ... lable.aspx

[vampireinthenight]

The payment in a C&R for future medical, is based on the need of treatment on an industrial basis. That is all the ER/IC is paying the IW for...

Right but "industrial basis" is a term of art. In actuality, even if a person is treating for a spinal condition on a weekly basis before the industrial injury and then there is some increase because of the injury, the IC has to pick up all of it, even the non-industrial part, because, like you point out, it is not possible to only treat part of the spine which may be due to DDD. So, even though the treatment is provided for on an "industrial basis", only a small part of it is industrial in nature.

How do you know which symptom is being treated... the arthritis, or the cervical spine...? Do you treat the DDD in the morning, and the spine injury in the afternoon... ? Is the arthritis, or DDD onset due to the broken neck or herniated disk ?

While I appreciate your point, we actually do this in WC all the time when there are multiple defendants. FMC is divided up among any number of defendants based on proportional share, ie. what their injury contributed to the whole. We do the same thing with PD, except there we are able to apportion out non-industrial conditions.

Keep in mind, I'm not suggesting that the treatment itself be parceled out. At the time of settlement, the treatment is reduced to a dollar amount. The dollar amount can be easily segmented, even when the treatment may not.

Let's face it, Medicare is getting a windfall here. Treatment Medicare normally would have had to pick up when a person retires is now being shifted to employers through injuries, even minor ones.

Medicare may not make payment for the medical treatment where another party is responsible.

That's the sticky part, and where I would like to know how iron-clad it is. In part because it conflicts with other parts:

Medicare should never make payment for any medical treatment related to a work injury,

This is the rub. It's not related. It pre-existed or was non-industrial.

[jpod]

I think the answer is yes you could apportion future medical treatment under an MSA. But to prevail either Medicare would have to sign off on the MSA value, or one needs a judicial finding on apportionment. To achieve that one would assume adequate medical opinion would have to support such and if so CMS would approve it as part of the MSA. This would not help the defendant in anyway since the defendant is liable for medical without apportionment at least in California. So the C&R would pay for the total future worker's compensation liability and the MSA value would be a subset of that total. Medicare would only be able to track the subset of MSA funds, not the apportioned funds that the employee gets to pocket. So money in the C&R that is for a worker's comp covered benefit, but not a Medicare covered benefit, is the employee’s to spend as they see fit (it is a stretch to come up with an example but let’s say money in the C&R for hearing aids - something Medicare does not cover -don't ask me to come up with a valid scenario where hearing aids would be apportioned from an MSA but not a C&R).

The problem is I think it is unlikely anyone will be able to convince CMS to sign off on such an MSA.

There may come a time when applicants besiege the WCAB with DORs asking for a judicial finding that their current need for treatment is unrelated to the claim C&R’d years ago. It is unclear to me whether the WCAB would entertain such endeavors when there is not an award for future medical treatment.

[medlink]

Apologies for not posting a reply until now. Fortunately, Jpod explained the preliminary approach to apportionment in the MSA with "But to prevail either Medicare would have to sign off on the MSA value, or one needs a judicial finding on apportionment. To achieve that one would assume adequate medical opinion would have to support such and if so CMS would approve it as part of the MSA." These strategies were more applicable prior to June 1, 2009, when CMS would consider the signed court order and the submitter could prevail with certain issues, such as apportionment of medical treatment, particularly when the decision was based on an AME report.

Since then, CMS implemented it's April 3, 2009 Memo which announced that CMS will begin independently pricing future prescription drug treatment costs/expenses beginning June 1, 2009 in Workers’ Compensation Medicare Set-aside Arrangements (“WCMSAs”). While generic substitution was allowed, the pricing is to be calculated using average wholesale price (AWP) and we (MEDLink MSA and other MSA Allocators) 'scrambled' to submit the previously completed MSAs before the deadline.

On June 2, 2009, CMS posted guidance on its website intended to clarify its Memo dated April 3, 2009, This guidance touched upon several topics (partial list): 1) Tapering of Use: CMS will consider all evidence when the treating physician believes tapering of prescription drug use is possible and is in the best interests of the beneficiary. 2) Utilization Review: CMS will consider utilization review reports indicating that a beneficiary should be taking none, fewer, different or less frequent drugs. However, reports of actual drug use from treating physicians will be given more weight than these utilization review reports. Thereafter, CMS has considered the treating physician over the AME or even UR when confronted by conflicting opinions. Not to cast dispersion on any profession but usually an Orthopedic Spine Surgeon or Neurological Surgeon surgeon would prevail over a nonsurgeon treater when it involves surgical treatment issues.

Just a thought, but I suspect that CMS will continue to give greater weighting to the treater in California MSAs, in view of the Governor's recent signing of the treater predesignation legislation. So returning to apportionment of medical treatment, it will be difficult to prevail unless the MSA Allocator works with the parties to present the appropriate documents ie. medical, legal, court etc. Under the current economic & Medicare climate, it could be a 'Sisyphus' type uphill battle, but not impossible.

Janice Skiljo Haris, RN MS MSCC CNLCP
* MEDLink Medicare Set-Asides (MSA)
* MEDLink Life Care Plans (LCP)
tel: (415) 399-9769
email: jharis@camedlink.com

[stevepsca]

I wouldn't disagree with you... but look at this as though there were no MSA..

When calculating FMC you come up with the potential needs of the IW... and cost projections. The IW is assuming liability of the FM out of pocket. Done.
Where the IW is Medicare eligible, Medicare just wants the portion Medicare would 'normally be responsible for' deposited into an account they can track. It's still the IW's money... None goes to Medicare. If the claim were not closed on medical the ER/IC would continue liability, now the option is there to cash out and shift liability to the IW. Medicare is protecting the tax payer..not the IW.

I understand what you are referring to with apportionment to medical... and I can relate directly... I have a100%PD under the old schedule... cervical spine. I am Medicare eligible. And we are working on a C&R. Under the new PDRS there may/may not be some apportionment to cause due to DDD or arthritis. I know there is arthritis since the surgeries. IF there was causation to the 100% PD, say 50%, obviously that would reduce the indemnity by half. For FMC and WCMSA purpose you'd like to see the medical award reduced by half as well in funding the MSA. (?) Medicare pay half, and I pay half of the bill when I seek treatment for my industrial injury.

Would that same scenario prevail with a GHP, or private pay policy ?
Medicare is not a general health care entitlement... I/we pay a premium each pay period the same as one would for the GHP or private pay health care policy.

How would the bills be split up where the IW is married, spouse has GHP coverage for IW. With a few perameters, the GHP pays first, then IW/MSA, then Medicare. As you can only use the MSA for services Medicare would normally be responsible for, and the GHP cannot exclude pre exsisting, including industrial injury. There the liability for the injury is shifted to the next GHP/IC, then IW/MSA then Medicare.
You are not shifting liability to the government. It's the same as shifting liability for TTD to SDI, or STD/LTD policies. The ER is liable for the injury 'for life'... apportionment to medical in a FMC award where there is Medicare eligiblility (it's not ''entitlement'') and a MSA is shifting liability directly to the IW.

Let's face it, Medicare is getting a windfall here. Treatment Medicare normally would have had to pick up when a person retires is now being shifted to employers through injuries, even minor ones.

The ER liablity with a FMC settlement sees a definite end to the liabilitiy. The IW is never afforded that luxury.
I would have to imagine the bulk of WCMSA's are not provided to retirees... but middle age, some younger employees who are Medicare eligible through SSDI award, or application threasholds for Medicare eligibility. In some cases that FMC/MSA money has to last a lifetime. In some cases, Medicare never does kick in.