Tag Archives: California

Using California’s Independent Medical Reviews to Challenge the Set Aside Amount

Article by Rafael Gonzalez, Esq. Vice President, Strategic Solutions HELIOS Settlement Solutions

Article by
Rafael Gonzalez, Esq.
Vice President, Strategic Solutions
HELIOS Settlement Solutions

Introduction

What happens when Medicare requires that a Workers Compensation Medicare Set Aside include the future costs of medical treatment and prescriptions that may not be covered under a state workers compensation law particular or applicable to the claim? What is CMS’ policy on situations where a state statutory provision, administrative rule, regulatory provision, or case law indicates the recommended care is not allowed, permissible, or otherwise awardable as part of or resulting from the workers compensation claim?

What about the legal dispute resolution process? Short of an executive branch administrative law judge or constitutional member of the state judiciary system rendering a decision on the merits of the claim as to whether medical care and/or prescriptions requested are or are not related to the workers compensation claim, what is the Centers for Medicare and Medicaid Services doing with administrative decisions on the compensability of such requests? In other words, will CMS recognize and give credibility to non-judicial, but statutorily authorized methods of medical conflict resolution such as California’s Independent Medical Review?

The Medicare Secondary Payer Act

Section 1862(b)(2) of the Social Security Act indicates that Medicare may not pay for a beneficiary’s medical expenses when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.” See also 42 C.F.R. § 411.21. As a result, the Medicare Secondary Payer Act (MSP) not only requires parties to take Medicare’s past interests into account, but also consider Medicare’s future interests into account when settling future medical care related to a workers’ compensation claim by making sure Medicare remains the secondary payer at all times. 42 USC Section 1395y(b)(2).

Medicare Set Asides

Although not statutorily mandated, the “preferred” manner for parties to take Medicare’s future interests into consideration when settling future entitlement to medical benefits related to the workers compensation claim is through the creation of a Medicare set aside (MSA). In addition, the parties to a workers’ compensation (WC) settlement may voluntarily choose to get the Center for Medicare and Medicaid Services (CMS) approval of the MSA amount in order to establish that they have in fact taken Medicare’s future interests into account and to further provide certainty with respect to the amount that must be properly spent before Medicare becomes the primary payer for the work comp claim-related care.

Workers Compensation Medicare Set Asides

As defined by CMS, a workers’ compensation Medicare set aside (WCMSA) “allocates a portion of the WC settlement for all future claim-related medical expenses that are covered and otherwise reimbursable by Medicare.” WCMSA Reference Guide, Section 3.0 (1/5/2015). Therefore the goal of establishing a WCMSA is to “estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for claim-related conditions during the course of the claimant’s life, and to set aside sufficient funds from the settlement, judgment, or award to cover that cost.” WCMSA Reference Guide, Section 3.0 (1/5/2015). Thus, only future medical costs and prescription needs that have been determined to be related to the claim, and for which the employer/carrier is legally responsible for under the state specific workers compensation law, are to be included in the WCMSA.

When State Law Conflicts with CMS Policy

But what happens when Medicare requires that the WCMSA include the future costs of medical treatment and prescriptions that may not be covered under the state workers compensation law particular or applicable to the claim? What is CMS’ policy on situations where a state statutory provision, administrative rule, regulatory provision, or case law indicates the recommended care is not allowed, permissible, or otherwise awardable as part of or resulting from the WC claim? What is CMS or its Workers Compensation Review Contractor (WCRC) doing in such situations? Are they excluding such care and prescription costs based on state law, or are they including these in the MSA allocated amount nonetheless?

The WCMSA Reference Guide specifically addresses this issue. Section 9.4.3 specifically indicates that “the WCRC strives to comply with the laws of the state determined to be the appropriate state of venue. The reviewers research the applicable state regulations.” Section 9.4.4 specifically states that “CMS will recognize or honor any state-mandated, non-compensable medical services and will separately evaluate any special situations regarding WC cases. A submitter requesting that CMS review the applicability of a state WC statute must include a copy of the statute with the submission and indicate to which topic in the submission the statute applies.”

California’s Independent Medical Review Process

What about the legal dispute resolution process? Short of an executive branch administrative law judge or constitutional member of the state judiciary system rendering a decision on the merits of the claim as to whether medical care and/or prescriptions requested are or are not related to the workers compensation claim, what is CMS doing with administrative decisions on the compensability of such requests? In other words, will CMS recognize and give credibility to non-judicial, but statutorily authorized methods of medical conflict resolution such as California’s Independent Medical Review?

Senate Bill 863 was passed by California’s Legislature on August 1, 2012 and signed by Governor Brown on September 18, 2012. Among its many changes, the bill, which took effect on January 1, 2013, made significant changes to California’s workers’ compensation system by introducing a new process called independent medical review (IMR) to resolve disputes about the medical treatment of injured employees. As of July 1, 2013, medical treatment disputes for all dates of injury are to be resolved by physicians through IMR, rather than through the court system.

A request for medical treatment in the workers’ compensations system must go through a “utilization review” process to confirm that it is medically necessary before it is approved. If utilization review denies, delays or modifies a treating physician’s request for medical treatment because the treatment is not medically necessary, the injured employee can ask for a review of that decision through IMR. California Labor Code §3610.6(h).

The decision issued by the IMR is deemed to be the determination of the Administrative Director (AD) and it is binding on all parties. If the disputed treatment is determined to be medically necessary, the claims administrator must promptly implement the decision unless it disputed liability for the treatment on a basis other than medical necessity or it files an appeal. If the disputed treatment has already been provided, the claims administrator must reimburse the medical provider within 20 days. If the disputed treatment has not been provided, the claims administrator must authorize the treatment within five business days. California Labor Code §3610.6(h).

If either party is unsatisfied with the IMR determination, the dissatisfied party may file a petition with the Workers’ Compensation Appeals Board (WCAB) within 30 days of the mailing of the final determination. The final determination is presumed correct. Should the WCAB reverse the final determination, then the WCAB returns the dispute to the AD for either assignment to a different IMR, or assignment to a different medical reviewer where a different IMR is not available. California Labor Code §3610.6(h).

If after going through the IMR process and obtaining a decision that such requested care is not permitted or authorized by the specific state statute, CMS through its WCRC still includes such treatment or prescriptions in the WCMSA, the parties have the option to submit a re-review request of the approved WCMSA amount. WCMSA Reference Guide, Section 16.0 (1/5/2015). When either party disagrees with CMS’ decision because either one believes (1) CMS’ determination contains obvious mistakes; or (2) there is additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal and which warrants a change in CMS’ determination, either party may request such re-review. WCMSA Reference Guide, Section 16.0 (1/5/2015).

Challenging CMS’ Inclusion of Medical Care and Prescription in the MSA

Helios Settlement Solutions recently submitted several California MSAs to CMS without any of the medical care and prescriptions denied by the IMR. However, despite such uncontroverted evidence, the WCRC included the medical services which had been denied by the IMR in the approved WCMSA. As a result, our team requested re-review, or reconsideration.  We argued that the post traumatic stress disorder, cervical condition, and pain and psychiatric disorders included in each of the MSAs should be excluded because an IMR had concluded that such treatment was not medically related and necessary as a result of the work comp claim. CMS had included such services in each case based on its policy that it would not provide deference to an IME opinion.

Our team however argued that the IMR is not an IME, but a resolution process conclusion mandated by California’s workers compensation law and therefore such opinion should be upheld, allowing the post traumatic stress disorder, cervical condition, and pain and psychiatric disorders to be removed. Our position was that pursuant to California Labor Code §3610.6(h) (Senate Bill 863), the IMR decision is final and binding upon the parties. We therefore argued that CMS cannot include such medical services in the WCMSA where the employer/carrier is not legally responsible for same under California’s state law.

In response to our request for reconsideration, CMS removed the unrelated post traumatic stress disorder treatment (saving $251,507), treatment for the unrelated cervical condition (saving $187,876) and unrelated pain and psychiatric medications (saving $70,383).

Conclusion

The Medicare Secondary Payer Act not only requires parties to take Medicare’s past interests into account, but also to consider Medicare’s future interests into account when settling future medical care related to a workers’ compensation claim by making sure Medicare remains the secondary payer at all times. Although not statutorily mandated, the “preferred” manner for parties to take Medicare’s future interests into consideration when settling future entitlement to medical benefits related to the workers compensation claim is through the creation of a Medicare set aside. A workers’ compensation Medicare set aside allocates a portion of the work comp settlement for all future claim-related medical expenses that are covered and otherwise reimbursable by Medicare. If however state law conflicts with CMS policy, CMS will recognize or honor any state-mandated, non-compensable medical services and will separately evaluate any special situations regarding the specifics of the work comp case.

Senate Bill 863 was passed by California’s Legislature on August 1, 2012 and signed by Governor Brown on September 18, 2012. The bill, which took effect on January 1, 2013, made significant changes to California’s workers’ compensation system by introducing independent medical review to resolve disputes about the medical treatment of injured employees. As of July 1, 2013, medical treatment disputes for all dates of injury are to be resolved by physicians through IMR, rather than through the court system. The decision issued by the IMR is deemed to be the determination of the Administrative Director and it is binding on all parties. If after going through the IMR process and obtaining a decision that such requested care is not permitted or authorized by the specific state statute, CMS still requires inclusion of such treatment or prescriptions in the set aside, the parties have the option to submit a re-review request of the approved amount.

Helios Settlement Solutions is committed to making sure that any set aside we produce, and which is ultimately approved by CMS, includes only those items that are related to the claim, awardable pursuant to state law, and allowed under Medicare law. As a result, we are always on the lookout for any administrative orders, findings of a court, or regulatory body conclusions that pursuant to state law has the authority to conclude whether such medical care is related to the claim and awardable under state law. Upon verifying same, our experienced and knowledgeable staff will produce a WCMSA that will not include any medical services or prescriptions denied by the IMR, and should CMS include such items in the WCMSA, guide you through the current CMS appeals process, allowing for re-review or reconsideration of its approved set aside amount.