New Proposed WC Regulations in Maryland

Maryland is again proposing regulations affecting workers’ compensation settlements as it relates to ensuring that Medicare’s interests are protected before a settlement will be approved. The previous proposed regulations from 2010 were never adopted and have expired. It is suspected that they were never adopted due to the fact that the regulations required CMS submission when CMS Memos and communications state that the submission process is voluntary and not a mandatory process.

The new proposed regulations are much less stringent and seem to harmonize with CMS directives in that they allow for approval of settlements without mandating CMS review and approval of an MSA. In addition, the proposed regulations require a statement that the insurer shall reimburse Medicare for any conditional payments that are determined to be the responsibility of the employer/insurer in a non-compromise case. These regulations should be more palatable to the workers’ compensation industry and still allow for adequate protection of Medicare’s interests. Public comments can be submitted through October 11, 2011. Following are the pertinent details of the proposed legislation:

B. Future Medical Expenses.

(1) A settlement involving future medical expenses, including future pharmaceutical expenses, may be approved by the Commission provided that the settlement agreement:

(a) Contains a detailed statement explaining how the interests of Medicare have been considered in reaching the settlement; and

(b) Identifies the amount of the proposed settlement:

(i) Apportioned to future medical expenses; or

(ii) Set aside for future medical expenses through a formal set-aside allocation

(2) 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.

(3) A formal set-aside allocation shall comply with the guidelines established by Medicare for set-aside allocations.

(4) In determining whether a set-aside allocation and settlement may be reviewed and approved by the Centers for Medicare and Medicaid Services (CMS), the Commission shall apply the most current Medicare review thresholds set forth in the memoranda or regulations available on the CMS website.

(5) A settlement within the Medicare review thresholds may be approved by the Commission provided that, in addition to the requirements set forth in §B(1) of this regulation, the settlement agreement contains a statement acknowledging:

(a) That the settlement is within the CMS review thresholds;

(b) That the parties voluntarily have elected not to submit the settlement and formal set-aside allocation to CMS for review and approval; and

(c) That the parties are aware that CMS may refuse to pay for services related to the injury and may assert a recovery claim against any entity, including a claimant, provider, supplier, physician, attorney, or private insurer.

To view the proposed legislation click here.

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