Employer Liability & COVID: A Tale of Two States

As is typical in every state-based worker's compensation (WC) case, determining relevant legal factors requires a balance of both state and federal law. The arrival of the COVID-19 pandemic and the workplace challenges it poses require employers to perform that same federal/state balancing act when their workers contract the disease.

However, the WC rules in each state can differ significantly from those of their neighboring states. Because of those disparities, how individual states are reacting to the health concern can dramatically impact the services and support employees might receive should they contract the illness at work. For example, Florida and Georgia are responding differently to the viral concern, which impacts the possible resolution of their WC cases. WC cases with similar fact patterns that arise in the separate states may resolve entirely differently based on where the injury/illness occurred.

No Federal WC Law ... There is no federal law that requires each state to have a WC capacity; every state has established its own WC industry. (The federal government itself has also established a WC system for workers who work in federally based jobs.) The consequence of having no federally defined WC requirement is the development of a loose, state-based network of WC laws and practices that operate differently from and independently of those found in the other states.

In some ways, the lack of standard, nationwide WC regulations is good because it allows the citizens in each state to determine the depth and breadth of their WC rules. In other ways, the lack of uniformity causes problems, as states make different determinations about whether their laws will include or exclude specific injuries or illnesses from WC protections.

... But Yes, Federal Occupational Safety and Health Law

While the federal government doesn't regulate WC issues per se, it does regulate how employers maintain their workplaces to keep their employees safe while at work. The 1970 Occupational Safety and Health Act (OSHA) established a 'general duty' clause that incorporates worker health and safety rules that are applicable in all states. It requires each employer to keep its workplace "free of recognized hazards that can or are likely to cause death or serious physical harm." The intent is to reinforce the basic principles set out in the state-based WC statutes: employers are responsible for the costs incurred when employees suffer injury, illness, or death while on the job.

Consequently, because the federal government enforces workplace safety rules and state governments enforce WC rules, employers must navigate between the two when

setting up the safety standards for their employees and then maintain those compliances when work-based injuries or illnesses occur. In many, many cases, a state-based WC case becomes more complicated and complex based on how its rules interpret and apply the relevant federal statutes.

(A relevant side note: there are federal laws that every state must follow because they flow from constitutional principles, such as those that prohibit discrimination against pregnant workers or workers with disabilities, as just two of many examples.)

WC Laws and the COVID-19 Pandemic

The lack of uniformity of WC rules across state lines has exacerbated the confusion around potential WC coverage for covid infections, causing significant consternation to many injured or ill workers who believe they may have contracted their COVID-19 illness while at work. The discussion centers around two critical points:

1. Do the states' WC laws provide guidance to include or exclude coverage for potentially work-caused COVID infections as a matter of course? In some states, an illness contracted due to exposure at work is considered a work-related illness and is covered. In other states, legislatures considered the virus to be within the class of 'routine community spread' diseases such as the flu, chickenpox, or measles. Community spread diseases are typically not considered covered by WC insurance.

2. If WC insurance doesn't automatically cover the costs of the illness, is there some circumstance at the place of business that increases the risk of contracting the virus, whether that's by the nature of the work or through a lack or lapse of compliance with proper safety protocols? Negligence or recklessness regarding COVID protections on the part of an employer may trigger WC coverage anyway or give rise to a separate civil claim for damages.

Having WC coverage for a work-related illness, including COVID-19, offers significant benefits for workers:

· It can provide supplemental funding to replace lost wages when local mandates require the worker to quarantine because of exposure or contraction of the disease.

· It can also cover medical and healthcare costs for care and treatment of the disease, which can be especially high if there's hospitalization involved.

· It may also provide a basis for long-term medical care and costs if the ill person develops long-term symptoms or permanent organ damage from the virus.

· For workers who are also Medicare recipients (or within Medicare eligibility limits), having employer-supplied WC insurance to manage covid-related health concerns alleviates any future challenges that may arise with their Medicare benefits. The Mandatory Secondary Payer Act (MSA) prohibits Medicare from paying for healthcare expenses that are legitimately the legal obligation of another party.

Not having WC insurance coverage for a COVID infection eliminates these supports for workers who cannot work because they've contracted the disease.

Because of these critical factors, and even with the federal governance in place, how a state government elects to manage its internal WC laws can profoundly affect how well its labor force withstands and survives the pandemic.

Florida and Georgia: A Tale of Two States Florida and Georgia present two very different WC perspectives that provide a good contrast for how, despite a common workplace safety mandate, workers in one state will (most likely) do better through the COVID crisis than those in the other.

How They are Similar

In many ways, the two states are similar regarding their policies for WC insurance:

· Florida requires every business with four or more employees to carry WC insurance; construction businesses in the state must cover all employees, regardless of their number and even if they are contractors and not employees in the technical sense.

§ Georgia requires companies with three or more workers to carry the insurance.

· Florida requires coverage for part-time workers unless they are independent contractors not employed in the construction industry.

§ Georgia includes part-time workers within its 'employee' classification.

· In both states, achieving a WC claim resolution usually happens through a negotiation between the injured worker, the employer, and the insurance carrier.

§ In Florida, these negotiations encompass all aspects of the case.

§ In Georgia, settlements fall into two classes:

§ a liability class that resolves all the liability concerns with the insurer making the required payment, and

§ a non-liability class that results in a closed case even when there's a dispute about 'benefit eligiblity' amongst the stakeholders.

· Both states have statutes of limitations for their WC rules, which govern when an injured worker can file a claim after an injury or an injury-related event. With a few exceptions, Florida claimants have two years to file claims for WC benefits, to receive medical care, or for lost wages.

· Georgia divides its limitation statutory provisions into three provisions:

· Injured or ill workers have one year from the date of injury to file a claim;

· If the worker receives temporary, total, or partial disability benefits that end, they have two years after that date to file a claim, and

· Each injured employee has one year after receiving a bill for medical treatment to submit it to their employer or the insurance company.

Both states will assess civil or criminal penalties on companies that fail to carry WC insurance or to follow the rules within those jurisdictions.

How They are Different

While the two states mandate similar but not identical standards for worker's compensation purposes, they differ significantly in their determination as to whether they consider a COVID-19 infection a 'work-related injury' to trigger WC coverage.

Florida In Florida, in Spring 2020, 2020, the Chief Financial Officer issued a directive (2020-05) declaring a presumption of WC coverage for that the state's 'Frontline State Employees' who test positive for COVID-19. The directive defines 'Frontline State Employees' as workers who 'require substantial contacts with populations known to or suspected of carrying a COVID infection.' Those workers specifically identified in the directive include police and law enforcement officers, firefighters, emergency medical technicians, paramedics, those who work in the healthcare field, corrections officers, and the FL National Guard members. The directive also contains a clause allowing for the state to deny coverage if it can prove that the sickened worker did not contract the infection while on the job.

Within months, however, the challenges of trying to provide healthcare support for a very indiscriminate illness became apparent. By the end of July 2020, nearly 12,000 Frontline employees had filed for WC benefits due to a COVID infection (65% of all claims made within the previous four months), but state insurers have refused all or some coverage for almost half of them. Despite the consequent uncertainty roiling the state's business community, state lawmakers have not stepped in to address the situation.


Unlike Florida, Georgia has not designated any individual occupation as one that is at higher risk of a COVID-19 exposure, so there are not yet any declared presumptions on behalf of frontline workers.

Instead, in August 2020, the Georgia governor signed into law the Georgia COVID-19 Pandemic Business Safety Act, which actually shields employers from liability for both workers and patrons who contract a COVID infection while on the business's premises. The law creates a presumption that anyone who enters a publicly open business or facility during the time of COVID-19 assumes the risk of contracting an infection. Therefore, the business owner is not liable for their illness, any injury it causes, or medical costs it incurs.

Remarkably, even healthcare facilities gain protection from liability unless their claimants can prove "gross negligence, willful and wanton misconduct, reckless infliction of harm, or intentional infliction of harm" regarding contracting a COVID-19 while on the facility's premises.


At the heart of the WC/COVID liability question is the reality that no one - not employers, employees, or WC insurers - considered the possibility of a global pandemic when establishing the terms and parameters of the WC agreement. Add that confusion to the already delicate federal/state law balancing act, and it's become clear that employers, employees, and lawmakers will have a more difficult time resolving WC claims arising from a COVID infection. It appears certain now that the COVID pandemic will trigger a significant litigation boom, and that employers – in Florida, Georgia, and across the country – will have an even bigger struggle making sense of their roles in the worker's compensation/worker health and safety arena.

Why It’s Imperative to Keep Workers COVID Safe

Pam Sornson, JD

Even with vaccines being issued across the country, COVID-19 continues to pose a serious health threat, especially to those workers who must report to an office or out-of-home worksite each day. Not only can contracting the disease have lethal consequences, but it can also cause long-term side effects that interfere with the everyday enjoyment of life. Employers should take every precaution possible to avoid a COVID-19 exposure in their place of business and ensure that appropriate remediation policies are in place if it does. 

Worksite Workers May Get Sick More Often

According to investigations conducted by the U.S. Centers for Disease Control and Prevention (CDC) in summer 2020, people who routinely reported to a worksite or office each day were almost twice as likely to contract a COVID-19 infection as those who worked from home. Researchers came to the conclusion after comparing how often study participants visited other possible infection sites, such as grocery stores, gyms, or salons. Those numbers were similar for both at-home workers and in-the-office workers, indicating that exposure in the community was comparable between the two groups. The study also eliminated 'essential workers' from its cohort since those workers are more likely to be exposed to the virus simply because of the work they do. The CDC used the study to encourage employers and businesses to take every possible precaution to ensure a safe, COVID-19-free environment for staff members.    

An Expanding Complex of Symptoms

Avoiding a workplace exposure to the coronavirus is becoming even more significant as sufferers continue to report an ever-growing list of unexpected symptoms. Initially, when COVID-19 infections were first reported, the majority of reported symptoms were similar to those caused by an influenza virus and were primarily related to an upper respiratory tract infection: fever, cough, aches, fatigue, headache, etc. One symptom - loss of sense of taste or smell or both - appears to be unique to this disease.  

As the pandemic progressed, however, doctors were stymied by COVID patients reporting a plethora of symptoms that popped up during an active virus infection but weren't typically experienced as a consequence of an upper respiratory viral infection:

Gastrointestinal issues (GI)

Some COVID patients reported nausea, vomiting, and diarrhea in addition to the more typical symptoms, while others reported only these symptoms. In China, one study recorded more than half of its participants were experiencing GI symptoms.  

Skin changes

Skin rashes also developed in some patients, who described them as raised and painful bumps that showed up on various parts of their bodies that did not respond to typical, topical skin treatments. 

COVID toes  

In some patients, rashes presented as what became known as 'COVID toes,' swollen and discolored toes on one or both feet. While many sufferers noted just changes in toe color and size, others reported itchiness, soreness, and blistering. In some cases, the COVID toes were the only symptoms of the disease and presented well after their actual infection

 Hearing loss

Another confounding symptom reported is hearing loss, possibly caused by the coronavirus. Some patients report suffering an onset of tinnitus (ringing in the ears) after their COVID diagnosis, and one JAMA- Otolaryngology autopsy study found evidence of the virus in the middle ear canals of deceased patients. Several respiratory viruses are known to impact hearing, but those symptoms typically clear once the infection

is contained. With COVID sufferers, there have been reports of lingering deafness even after other symptoms have receded. The virus may also play a continuing role in balance and dizziness symptoms reported by many COVID-19 patients. 

Blood clots

Another worrisome, potentially deadly symptom that the virus may cause is blood clotting. One blood clot specialist, physician Alex C. Spyropoulos, MD, suggested that as many as 40% of hospitalized COVID patients at his hospital died because of blood clots, primarily because they cause such damaging incidents like heart attacks and strokes. He describes the disease as being particularly aggressive regarding the development of blood clots and that patients who have the virus are three to six times more likely to develop blood clots than those who don't have COVID-19.   

Brain fog

Perhaps the most troubling and surprising symptom reported by many COVID sufferers is brain fog or confusion. Sufferers report a cognitive decline during and after experiencing more acute symptoms and, in many cases, continue to struggle mentally long after the virus has cleared the body. Studies conducted at Indiana University's School of Medicine reviewed the cases of 1500+ COVID survivors and found that almost two-thirds (59%) stated they had difficulties focusing in the weeks and months after their other symptoms had resolved. 

'Long COVID'

That brain fog is apparently typical of what doctors are calling 'Long COVID,' the continuation of symptoms that linger well after recovery should have been complete. The most commonly reported 'Long COVID' symptoms are difficulty breathing, chronic fatigue, and migraine headaches. Increasingly, though, cognitive dysfunction is popping up on symptoms lists. In a global study conducted in fall 2020, researchers discovered that many Long COVID brain fog sufferers couldn't return to work at full capacity for at least six months after recovering from their more acute COVID symptoms.

The study also attempted to gather into a single list all potential symptoms caused by the coronavirus. Reviewing the files of over 3,700 people, researchers recorded over 200 individual symptoms that affected ten different systems and 66 symptoms that lasted seven months or more.     

Employers Take Note

Even with the emerging health data indicating that a COVID-19 infection can cause significant havoc in a worker's life, many employers around the country are still reluctant to assert formal COVID-19 prevention practices at their workplace. In some cases, this reluctance may be because local governments haven't issued them, and business owners don't want or can't afford to incur the expense necessary to make those changes

In other cases, however, companies ignore new regulations designed to keep workers safe. In Michigan, for example, the state's Occupational Safety and Health Administration (MiOSHA) recently issued 23 citations against companies that violated its COVID-19 related "Emergency Rules," with each violation carrying a potential fine of up to $7,000. What makes these incidents so dismaying is that the breaches were so readily avoidable: the three most cited violations across all cases involved failing to require face masks, failing to maintain social distancing, and failing to have a preparedness and response plan ready in the event an infection was discovered. Each of these elements can be relatively simple to implement and enforce, especially when the health of a worker and the business itself are at stake. 

Why employers expose their workers to such potentially damaging conditions is a mystery. If nothing else, lingering brain fog and confusion should be of great concern to companies that rely on their workers to perform at optimal levels most of the time, especially those whose work entails precise movements or activities. Further, an undetected but infected worker also has the capacity to infect business colleagues and customers, which escalates the risk of loss to the business. In all cases, even just one case of COVID-19 at a workplace carries the potential for an expensive worker's compensation claim, and may even trigger a more serious civil claim, to boot.  

Follow Federal OSHA Guidelines 

The fact that there are many states that have not yet adopted COVID-19 safety rules shouldn't deter a company from implementing them anyway using the guidelines issued by the federal OSHA agencyFederal OSHA details the many steps needed to make a corporate facility ready for worker occupation again, especially those that have been shuttered due to coronavirus lock-downs. The organization also details the steps necessary to bring a worksite into compliance with federal COVID-19 standards, including conducting a hazard assessment, developing policies that protect worker safety, and maintaining open communication channels for workers who wish to report a COVID-19 related concern.     The emerging health data should act as a warning to employers who have not yet implemented employee safeguards to prevent or curtail the spread of coronavirus disease in their offices and workspaces. While some may think that such precautions are unnecessary, it's becoming increasingly clear that leaving anyone at risk of infection could have long-term consequences that may not take a life but still seriously curtail or negatively impact a worker's life. And even one sick worker imperils the health of the business itself. 

COVID-19 Costs to Medicare Beneficiaries – Who Pays for Those?

According to recent research, the COVID-19 virus has impacted America's aging population more than almost any other group. The diagnosis carries with it almost certain and dramatic changes in lifestyle and capacity for afflicted Medicare beneficiaries, many of whom are now concerned about the subsequent costs they may have to bear as a consequence of getting sick. While Medicare is working to address the challenges posed to this population by the virus, including how to cover those costs, some employed beneficiaries might find another resource through their worker's compensation insurance.    

Higher Age = Higher Risk of Serious Illness

The data suggest that Medicare beneficiaries or those who become eligible for that status within two years are more apt to get seriously ill should they contract the 2019 novel coronavirus. That reality is a major concern both for Medicare beneficiaries who have not gotten sick, as well as those who have employed it. As of winter 2021, over 62 million Americans were enrolled in Medicare, including those who engage through a Fee-For-Service model (FFS) and those who engage through a Medicare Advantage program (MA). 

Between January 1, 2020, and November 21, 2020, of those 62+ million seniors:

Many in these groups also suffer from a co-occurring health condition, which complicates both the significance of their illness and their recovery and long-term capacity. A large percentage of the FFS beneficiaries (79%) were also diagnosed with high blood pressure (hypertension); 49% were also diabetic, and another 49% suffered from chronic kidney disease. 

Age + Illness = Expense

The age and complicated medical history of these seniors increase the likelihood that they'll suffer more significant damage due to the disease. That situation will almost certainly generate higher costs, as well, for both acute and long-term treatments, a fact which concerns over 80% of participants in a recent MedicarePlans.com survey. Additional research indicates that they are rightfully concerned about a COVID-19 diagnosis's financial fall-out. Because of the variety of available Medicare plans and the varying terms each of those contracts contains, some Medicare beneficiaries will pay more for COVID-related healthcare services than others:

Basic Medicare

Medicare Advantage Plans

Approximately 24 million beneficiaries receive their Parts A and B Medicare benefits from a Medicare Advantage program, which also usually includes prescription drugs. 

Medicare Advantage plans also cap annual out-of-pocket costs; in 2021, that figure is $7,550.

Medicare Costs Looking Forward

Medicare is also looking ahead to determine how it can assist the country in meeting its future COVID-19 threats:

The cost to Medicare for COVID-19-related care was estimated at approximately $7.4 billion just for FFS COVID-19 hospitalizations between January 1 and November 21, 2020, with an average of $23,500 per hospitalized case. 

Another Payment Alternative

Despite the pandemic, many Medicare beneficiaries continue to work. A 2017 survey indicated that the 'Baby Boomers' (those born between 1946 and 1964) were not interested in retiring early. The employment growth rate for their 65-74-year demographic was likely to surpass 60% between 2014 and 2024. Clearly, COVID-19 has slowed that progress, but there are still millions of seniors who continue to work despite the turmoil caused by the disease. Sometimes that work may increase their risk of experiencing a COVID-19 exposure. 

If or when that exposure occurs, many of these workers may have another option instead of Medicare to cover their COVID-related healthcare costs. Many states now recognize that COVID-19 can be contracted through employment-related activities and therefore can be considered a 'workplace injury' for purposes of receiving workers' compensation insurance coverage. However, if or when they make that claim, they should also be sure to establish a Medicare Set-aside Account (MSA) to protect their Medicare funding for future healthcare costs that are unrelated to their COVID experience. 

Today's Medicare recipients and eligibles are facing more than just a devastating health threat; they are also contemplating possible impacts on their economic situation should they contract the virus. However, those who are working may have the opportunity for their worker's compensation insurer to pick up COVID-19 related costs to preserve their Medicare healthcare funds for future use. They should explore that possibility at the first sign of illness,    

Nuances on Achieving MSA Approval

Last month, we covered the 10,000' view of the system used by the Worker's Compensation Review Contractor (WCRC) to determine the merits of a Medicare Set Aside (MSA) account proposal. Not surprisingly, each separate element of the system also includes a series of smaller systems designed to clarify ever more granular information about the injured party, their injuries, their prognosis, and who will be covering those healthcare costs going forward. MSA professionals who master those more precise details are better prepared to achieve a swift and successful MSA acceptance when submitting their client's proposal.


Three Rules to Remember

When developing an MSA proposal, it's easy to miss critical but tiny details when your focus is on the much larger picture. However, in many instances, it is because of errors, confusion, or lack of the information that should be contained in these details that proposals get rejected or delayed. Delays occur when the WCRC doesn't get the data it needs to conduct a thorough review. Rejections happen when ill-prepared proposals reveal a claimant who is not eligible for Medicare, whose case doesn't meet the threshold, or when the case's legal issues aren't resolved (among many, many other reasons). Both delays and rejections are expensive because they mandate either additional work or waste the work that's been done. They also drag out the case for a longer period of time, incurring additional legal and other fees for associated services.


Here are three rules to remember when crafting an MSA proposal. Professionals who want to achieve the swiftest acceptance of their accurate and appropriate MSA proposal will have paid particular attention to these suggestions.


1)      Don't Skip the Prerequisites

It's best practice to ensure that all essential information is accurate and included in every MSA proposal, yet, often, it is these precise details that get missed.


Complete Information about the Claimant

In addition to the basics, the Claimants' name, date of birth, address, and Medicare Identity number (or social security number if not yet Medicare-eligible), the proposal must also include:


Proposals filed on behalf of claimants who are Medicare eligible must include:


Complete Information about the Legal Case

Because a workers’ compensation claim is at the heart of most MSA proposals, it is crucial to include:

Additionally, it is important to list out the details of the proposed settlement costs, including the total proposed settlement amount, which should cover economic values for:

Perhaps most importantly, include the total and detailed itemization of the proposed MSA amount, including the presumed costs of both medical care and drug costs. This itemized value is the cost Medicare would avoid paying because the WC insurer is assuming that obligation.


Complete Information about the Substance of the MSA

The proposal should also include clear documentation for each element of the MSA case - those details that are of specific interest to Medicare, including:



Complete Information about the Administration of the MSA

In addition to the factors indicating the case's financial resolution, the WCRC is also interested in the administration of the MSA once it is established. The MSA proposal should, therefore, include data detailing these activities, such as:



2)      Don't Muddy the Water

It's not unusual for an MSA proposal to include more than one injury, and CMS details how to manage those circumstances, too.


Document, Document, Document

The mandate to protect Medicare from paying for costs that aren't its rightful obligation is always the WCRC's primary concern, and multiple claims within a single submission can cloud the specifics of each. Ergo, asserting numerous injuries in a single MSA proposal also triggers the requirement to provide additional information to inform the WCRC about the proposed resolution of each of the cases. In these cases, the WCRC separates out each case according to the relevant date of injury (DOI).


Start at the Top

It is critical to inform the WCRC in the cover letter:


The WCRC wants assurance of a complete accounting for each individual claim, so it will look to the Claimant's proposal for information supporting those declarations. Some Claimants can lump all the DOI cases into a single MSA amount and are also able to describe how those distributions will work in execution. Other Claimants may separate each DOI case into a separate MSA and build out those MSA amounts accordingly.


If the WCRC doesn't get enough information about managing multiple injuries, it will close the file until it receives that data in writing.


Parse Out the Data for Each DOI

The proposal should include all relevant information identified by DOI regarding accepted and alleged injured body parts. Most helpful for the WCRC reviewer are the appropriate ICD-9 or ICD-10 codes (noting that the ICD-9 codes apply only to injuries sustained before September 30, 2015). Accompanying the codes should all associated payment histories, medical records, and detailed prescription histories for all medications received as a consequence of the injury.


Note, too, that if less than all claims have resolved sufficiently for an MSA discussion and claims will remain open, then the overall case is not yet eligible for review. 'Open' cases include those where there are some body parts still receiving treatment, where the insurance carrier continues to pay from some but not all treatments on a particular body part, or where medical claims are settled but pharmaceutical claims are not.


3)      Don't Miss the Mark on the Drug Data

A significant percentage of every MSA proposal covers the cost of prescription medications, and the WCRC will pay careful attention to the adequacy of the proposed prescription drug costs.


All treatments included in the MSA proposal must also be covered by Medicare and follow both national and local coverage guidelines.


The Medicare Set Aside account provides the best possible support for an injured worker who needs ongoing medical care for that injury. When carefully crafted and correctly submitted, the MSA proposal avoids unnecessary delays and provides the documentation required to get the account established and the Claimant moving forward.

Coverage in the Age of COVID-19

The COVID-19 pandemic has dramatically changed life around the world, halting whole global industries while shutting down cities, regions, and countries. The necessity of shuttering a company due to the coronavirus has caused immense financial and personal distress in virtually all industrial sectors. Millions of workers no longer have jobs as their employers closed up their business before its staff could transmit the virus. For many companies, that stress will be ongoing until society contains the spread of the virus, a valid vaccine is issued, or both.


At the same time, millions of others have also remained on the job, continuing their daily work despite the virus that permeates their community. Some fortunate employees can work from home, where they can stay both productive and safe. However, the nature of work of others exposes them to risks that did not exist before the time of the COVID-19 pandemic. Many of these 'essential' workers must continue clocking in, knowing that the style of their work or the people they serve might make them vulnerable to catching the coronavirus themselves. For these employees, the question of whether they can file a Workers’ Compensation (WC) claim because they got infected on the job remains unresolved.


When Not Working is Not an Option

'Essential' businesses provide or maintain the country's fundamental infrastructure: its food supply, energy supply, healthcare services, and more. Without them, other essential workers who are actively battling the virus would have no resources available to sustain their effort.


From a WC perspective, however, these essential workers are regularly exposed to the virus while at work. Their employers are rightfully nervous about a variety of possible scenarios:


The challenge is heightened by the fact that liability issues may arise if WC coverage is not available. COVID-19 has created a nightmare scenario for both workers and employers, where neither group has an assurance that the systems they have in place will protect them if they are affected by the virus.


WC Standards Also Cause Confusion

Fundamental realities of settled WC law may or may not apply to COVID-19 cases, but they will certainly pose a hurdle to those who want to resolve these claims expeditiously.


At first blush, several initial questions come to mind:


Monitoring Medicare Concerns

Employers who have employees who are (or soon will be) eligible for Medicare, or who already have a Medicare Set Aside (MSA) account should be very attentive to those life circumstances while the pandemic remains extreme. In many cases, these workers are members of vulnerable populations due to their age, ethnicity, etc., and a coronavirus infection could prove fatal to them.


Both situations raise questions about how the healthcare system will engage with those workers if they become sick with COVID because of their job. They will also muddy the legal water around the extent of the employer's mandate to cover the cost of work-related injuries or illness when those injuries occur due to a COVID-19 infection.


Eligible or Soon to be:

Workers who are moving onto the radar of the Centers for Medicare and Medicaid Services (CMS) because of their age or disability status must be conscientious about how they manage and record their risk of exposure to the virus. Most, if not all, of this population group will already have some form of pre-existing condition that will be covered by CMS funds once they begin drawing from their Medicare healthcare account. Assuming the worker can prove they became COVID positive while in the course of their employment, they'll also need to specifically parse out the healthcare services received in response to that illness and attribute those costs to the WC funder. It's crucial that they don't bill CMS for those expenses. They should also note that the COVID-19 disease may exacerbate their pre-existing conditions, which may require long-term WC coverage through an MSA to cover the expenditures flowing from that element of their recovery.


Workers with Existing MSAs

These workers have an established MSA account for a previous on-the-job injury, and the care they receive for that should not be affected by the fact that they've contracted COVID-19. However, they should note that many healthcare facilities are overwhelmed by treating COVID cases, so their ongoing treatments may be delayed or postponed until after the pandemic subsides.


This situation also raises the question of what would happen if the worker caught COVID on the job, got sick, and developed permanent damage requiring long-term medical services. Would that worker need to pursue an independent MSA to cover those costs? Could they add those costs to their existing MSA and have the WC carrier increase that fund value?


Again, careful diligence about recording healthcare practices and adverse symptoms by both eligible and existing Medicare recipients will help them determine how contracting the virus at work will affect their Medicare or Medicaid funding in the future.



This coronavirus is changing virtually all aspects of American life, including how workers receive care for on-the-job injuries or illnesses. The patchwork of state-by-state WC laws will enhance the confusion as those industry stakeholders struggle to comply with both their local and federal regulations around WC injuries and healthcare services. One thing is certain, however: the COVID-19 pandemic will cause not only millions of illnesses but also changes to long-settled WC laws as employers, employees, insurers, and government work to 'standardize' an unmanageable situation.

Will the New CRC Contractor Impact Your Business?

Since October 2015, the recovery of Medicare health care payments from both Group (GHP) and Non-Group Health Providers (NGHP) has been managed by CGI Federal. CGI is the first contractor for the Centers for Medicare and Medicaid Services (CMS) Commercial Repayment Center (CRC), which collects back from third-party entities provisional payments made by Medicare on behalf of its injured members. However, on February 9th, 2018, management of those recovery services transitions to Performant Financial Group. Entities currently involved in GHP and NGHP/Medicare member cases may want to rethink their MSA opportunities as the new contractor takes up the Medicare "recovery of funds" challenge.

CRC Seeks Refunds of Mistakenly-Made Payments

The purpose of the CRC is to identify and recover primary health care payments made on behalf of injured Medicare members when another entity carries the legal responsibility for those fees. Until 2015, CMS's Benefits Coordination & Recovery Center (BCRC) was responsible for tracking down and collecting these funds. That process became unwieldy, however, because that agency was tasked with collecting from not just third-party entities, but also from the beneficiaries themselves. Wisely, CMS elected to bifurcate the burden and transitioned off the third-party collections responsibility into the newly created CRC.

Since its inception, the CRC has been collecting mistaken payments from both GHP's, the injured member's employer's health care insurance provider, and NGHP's, other entities with the legal responsibility to cover these healthcare costs, including no-fault insurers, liability insurers, and entities that are self-insured.

Effect on Insurers

For many companies, the collection notice came as an unwelcome surprise. Many no-fault and liability cases had been open for years, sometimes decades, and the CRC was now demanding a refund of all Medicare provisional payments made in those cases. Companies scrambled to review their files for Medicare members and to set up systems to identify, respond to, and proactively work to resolve any and all affected open cases. Some companies had to reimburse thousands of dollars to the agency for claims paid years earlier.

MSA Cases Had an Easier Time

For worker's compensation cases, the number of repayment notices was significantly less than those issued in other Medicare-related cases. Since 2001, CMS has been a party to injury cases involving injured members and Worker's Compensation carriers. For both pre- and post-settlement purposes, legal representatives of the insureds and the insurers must consider Medicare's interest regarding future healthcare payments and include a Medicare Set Aside (MSA) agreement in the settlement when future health care coverage is required.  Consequently, worker’s compensation entities managing healthcare services through MSA's had no backlog of unreimbursed Medicare payments because they had budgeted for those costs as the case closed. In these cases, the services of the BCRC (and now the CRC) are unnecessary; Medicare's interest had been resolved before the case fully resolved.

Learning from the WC Example

The incoming CRC agent offers a heads-up opportunity for any entity dealing with Medicare members in any sort of injury case, regardless of whether it is based on a liability, no-fault, or self-insured claim. In 2017, CMS announced new set-aside procedures for NGHP's (Liability Insurance injury claims and No-Fault injury claims) that recommend establishing an MSA in the originating case. The new procedures may be enforceable as early as July 2018. Although that announcement indicated that the Worker’s Compensation Recovery Center (WCRC) would be reviewing the cases, it may eventually turn out that the new CRC contractor will assume those obligations. No matter who the overseer turns out to be, a best business practice mindset would suggest that entities that may be held accountable for future repayment of relevant Medicare healthcare costs should begin developing their MSA contacts and procedures sooner rather than later.

Certainly, looking at Performant's history and intentions, the new CRC contractor intends to pursue any entity that may owe reimbursement funds to CMS; in its announcement about the new contract, Performant noted its intent to staff the project with more than 250 employees dedicated to the Medicare cause. And the company has significant experience collecting funds for the government; it is also a Private Collection Agent (PCA) for the U.S. Treasury Department and a Recovery Audit Contractor for Regions 1 and 5. While Performant will not be the recovery agent for WC cases (that contract went to Capital Bridge LLC), the anticipated increase in MSA review volume suggests that it may assume some of those obligations in the future.

Launching the New CRC Contract

Two webinars hosted by CMS informed the Medicare healthcare community of the process by which the transition will occur:

Medicare Commercial Repayment Center – NGHP, P.O. Box 269003

Oklahoma City, OK 73216

Fax: (844) 315-7627 (new number)

Phone: (855) 798-2627 (maintained as the current CRC Call Center phone number)

8:00 AM – 8:00 PM ET

Looking Forward

The events of 2017 (new LMSA and NFMSA rules and two new contractors) will certainly trigger ancillary changes to MSA and CMS procedures in 2018. At CompExMSA, we will continue to seek out answers to your MSA questions and look forward to assisting both existing and new clients with their MSA practices, processes and needs.

Opioid problem, cutting into U.S. life expectancy

Opioid Treatment Offers Hope to Injured Workers

Despite increased press coverage and a growing sense of national alarm, America's opioid addiction problem continues to expand. The number of people dying of overdoses each year has skyrocketed so high that it is impacting the calculations that determine the average American lifespan. And tragically, in the majority of cases, treatment for the condition isn't available.

However, new research indicates that treatment is, in most cases, effective in stopping the cycle of addiction while also revitalizing the social, occupational, and psychological functioning of the addict. For employers with injured workers who take prescription pain medications, combining those medications with treatment and counseling offers a safer, less expensive course to help employees recover from their injury and avoid becoming addicted to their pain pills.

Opioid Addiction by the Numbers

According to Blue Cross Blue Shield, 21 percent of its commercially insured members filled an opioid prescription in 2015, while the number of its members diagnosed with an opioid addiction grew 493 percent in just the six years between 2010 and 2016. Meanwhile, the Centers for Disease Control and Prevention (CDC) estimate that, since 1999, more than 60 percent of all overdose deaths involved an opioid drug. The Agency further asserts that from the year 2000 through 2015, more than half a million people have died because of their opioid addiction and that 91 people die each day because of an opioid-related overdose.

Decreasing Life Expectancy Rates Caused by Opioids

Last week, the CDC reported that the large number of opioid-related deaths had reduced the average life expectancy by 2.5 months, or .21 years. The Agency used data collected from the National Vital Statistics System-Mortality file, which warehouses death data collected from all 50 states and the District of Columbia. When reviewing death data from the years 2000 through 2015, the national average lifespan grew by two years, from 76.8 to 78.8 years; however, that number would have been higher but for the immense number of opioid deaths. By comparison, alcohol-related overdose deaths were responsible for just a .02 year decrease in life expectancy. No other factor had a greater impact on the average national life expectancy than the number of opioid overdose deaths.

Opioid Addiction Impacts the Economy

An equally troubling statistic reveals that opioid addiction also explains why many "prime age" workers (those between 25 and 54 years) are unable or unwilling to find work. According to a 2017 study by Goldman Sachs (GS), the male American labor force has shrunk by ten percent since 1954, and in the opinion of a GC economist, "the opioid epidemic is [part] of the declining prime-age labor force participation, especially for men." According to a 2016 White House survey of unemployed workers, which used Federal Reserve Data in conjunction with survey data, of the 1.8 million workers "out" of work, almost half of the survey respondents - 881,000 - reported that they had taken an opioid drug the day before. (The status of "unemployed" was for reasons not related to retirement, student-status, disabilities, or caring for family members.)

Further, the opioid epidemic also stymies the chances of finding a job. The Federal Reserve Data also showed that, although the primary reason businesses were unable to hire workers was because of lack of skills, another significant reason was that those potential employees couldn't pass a drug test.

Opioid Treatment is a Rarely Invoked Option

Despite the fact that treatment interventions positively impact an addict's ability to stay sober for 18 months and reduce the number of overdose deaths, only one in ten people received any specialized treatment related to their addiction, according to a 2016 Surgeon General's report. That report posits that at least one reason for the lack of treatment for such a wide-spread concern is the current cultural belief that stigmatizes drug addiction as a moral failure punishable by criminal sanctions. Shifting the social perception to view illicit drug use as a healthcare concern and not a criminal concern may encourage both addicts and the people who care for them to be more proactive about pursuing treatment.

But Treatment Works

According to research conducted by the National Institute on Drug Abuse (NIDA), the supports offered by drug abuse treatment programs are effective in reducing drug use as well as helping recovering addicts to regain their social, psychological, and occupational function. The most effective substance treatment protocol includes a combination of both medicines (methadone and buprenorphine are considered "essential" by the World Health Organization) and behavioral interventions. And medication treatment is not simply exchanging one addictive for another; the medicines reduce the cravings and symptoms of withdrawal, which allows the brain to rebalance itself and heal from the toxic effects of the addiction.

Opioid Treatment: An Option for Employers

Consequently, more employers are considering adding addiction treatment options to the recovery protocol when their workers are injured on the job. Rather than risking the potential development of an addiction powered by prescribed pain medications, employers can prepare their employees to avoid that situation by receiving appropriate treatment before addiction sets in. The costs of supporting a drug addiction are always higher than the costs of treatment, especially when workers return to the job yet fail to resume their full capacity. Also, taking the opioid challenge into account when setting up the employee's recovery options keeps the worker's best interest at the center of that process.

There is no evidence that the opioid crisis is abating. Employers can elect to be part of the solution to the problem, however, by adding addiction treatment options to the recovery plan for their inured employees. They'll be saving money, but more importantly, they may also be saving the life of their valued worker.

What Could Happen After Settlement?

Settling a Workers' Compensation (WC) claim can be a long and arduous journey that many resolve through the establishment of a Medicare Set-Aside (MSA). However, the terms of these legally binding agreements are expected to cover all contingencies over the course of the worker's lifetime. What happens when circumstances change and the conditions of the settlement no longer achieve the goals of the injured party? A recent California case indicates that trying to change the terms of an MSA may end up being another long and arduous journey.

Setting Up the MSA

The Medicare Set-Aside (MSA) agreement is designed to provide resources for the long-term best possible care for a lingering injury and its consequences. Through the process of the workers' compensation case, the parties to the case - the worker, the employer, the insurance company and Medicare - negotiate to ensure proper compensation for the injured worker while containing the long-term health care costs to those related solely to the workplace injury itself. The resolution of the case, via a settlement agreement providing an MSA, is intended to ensure the worker's long-term comfort (as much as possible) and offer reasonable assurance to the insurance company and Medicare that the case will remain forever closed.

The Best Laid Plans ...

Recently in California, however, an MSA agreement was tested for its capacity to address all contingencies after the WC closes. There, an injured worker sought to change the terms of his MSA so he could eliminate the third-party contractor from the MSA agreement and assume its administration personally. The injured worker, Applicant Fernando Villalpando, filed a claim before a Worker's Compensation Administrative Judge where he argued that he was not satisfied with the care he received through the services of the MSA administrator and that his experience justified the modification of the agreement. By filing and arguing the case, however, Mr. Villalpando inadvertently revealed several legal anomalies specific to MSAs that are not yet resolved but will, in all likelihood, continue to arise in future MSA cases.

The Underlying Case

Villalpando based his WC complaint on injuries suffered between 2002 and 2003; the Compromise and Release (C&R) agreement containing an MSA and a third-party administrator, was reached in 2011.  Although the agreement contained a clause whereby Villalpando released the third-party company from liability for "failure to ... correctly administer a Set-Aside account ...," it may not have included language that allowed for such a modification at any time, even though the agreement was set to run for 29 years. Villalpando argued that the medications he was on when he agreed to the settlement prevented him from fully comprehending the nature of the contract; that the third-party administrator moved forward with the MSA without his consent, and that the MSA failed to include two medications potentially because they were too expensive.

The WC judge (WCJ) denied the petition because the Applicant had not shown that the administration of the account was inappropriate. Villalpando appealed, and the WC Appeals Board (WCAB) remanded the case back to the WCJ. In its written opinion, the WCAB spoke to the many unanswered questions posed by the case starting back when the MSA was established in the first place.

The WCAB pointed out:

The WCAB sent the case back not just to the WCJ, but also to Villalpando's original attorney, so he could get the legal assistance he needed to understand the terms of the MSA agreement and his rights and obligations contained within it.

Questions, Questions ...

The case offers insights for any entity charged with the crafting of an MSA agreement. At the least, they should consider and account for all possible future contingencies, including the need for any party to the agreement to seek a change to its terms after the case closes. Depending on the facts of each WC case, it may be wise to include language allowing the injured individual to review and modify terms after sufficient time as passed for that person to gain clarity about the sufficiency of the agreement to meet long-term needs. And, to alleviate the need for unnecessary judicial review, perhaps the MSA should include language that lists the requirements necessary for an injured person to self-administer their MSA and the evidence required to prove competency for that purpose.

By addressing the concerns revealed by the Villapando case into each MSA going forward, claimants, attorney’s, and MSA administration agencies may prevent the need for another long, arduous legal journey through the WCAB process.



Georgia’s “400-Week” Rule Perplexes MSA Participants

For almost all of its history, a settled principle of American jurisprudence is that federal law supersedes state law. When there is a question of which body of law should control in any particular case, when applicable, federal law almost always triumphs. The principle holds true for rules involving the Centers for Medicare and Medicaid (CMS), too. Federal rules supersede state laws in cases where the rights and obligations of Medicare beneficiaries and the medical professionals who serve them are at issue. Usually.

California Offers a Different Perspective

In California, recently, state law was deemed the governing rule in the case of California Insurance Guarantee Association (CIGA) vs. Burwell, 2017 WL 58821 (C.D. California, January 5, 2017). (See our blog post about this case, here). In that case, CIGA was protesting the CMS request for reimbursement of funds that were unrelated to the underlying worker's compensation claim. The U.S. District Court declared as guiding law a California case holding that state law determines whether an insurer has an obligation to make payments on behalf of its insureds. According to that state law, the insurer was not obligated to make those payments, and therefore CMS, as the Mandatory Secondary Payer, was not entitled to reimbursement for payments made on the insured's behalf.

Unsettled Legal Precedents

The California ruling adds a ripple to the already unsettled legal waters about who's in charge of what and when in Worker's Compensation (WC) cases where significant injuries have occurred. With the passage of the 1980 Mandatory Second Payer Act (MSP), CMS was relieved of being the primary health care insurer for Beneficiaries who got hurt on the job. Instead, the WC carrier and/or other contractually obligated insurers would pick up the medical costs tab and relieve CMS of the duty to make those payments.

Modifications to the federal Act became necessary when the recovery times for some Beneficiaries extended for years past the injury date. In WC cases, new federal rules added the "Medicare Set-Aside" (MSA) process. Here, within the original case, the primary insurer became obligated to "set aside" funding to cover the cost of all future medical expenses related to the workplace injury. This relieved CMS from ever having to provide coverage to workers who had primary coverage - for the life of the injury - through their WC carrier.

Georgia Steps Out

In 2013, however, Georgia passed a state law that limits its WC carriers to only 400 weeks of extended support for workplace injuries that occur after July 1st of that year. The only exception to the rule is if the injuries are deemed to be "catastrophic," in which case the 400-week limitation no longer applies.

On its face, the Georgia law appears to be in direct conflict with both the "federal rules are primary" principle, as well as the tenets of the MSP, which:

The 400-Week Rule Raises Questions for MSA Industry

The vast majority of WC cases in any state do not extend to 400 weeks (approximately seven years, eight months), so most Georgia MSAs will not be affected by the GA rule. However, for those cases that do extend beyond that timeframe, the current MSA practice is to fund the account for the life of the Claimant (when medical opinion supports that determination).

The first 400-week termination date will occur in or after February, 2021, 400 weeks after the rule’s July 1, 2014 implementation. In light of the California case decision, the state WC rule raises several questions:

At CompEx MSA, we are always looking out for our clients, no matter the state in which they work. On behalf of our Georgia consumers, we have reached out to Medicare and CMS for further guidance on these perplexing developments, but have not yet had a reply. Going forward, we don't know how CMS and Medicare will respond when the first Georgia eligible Beneficiary passes the 400 weeks and seeks coverage from CMS for work-related injuries. When that happens, we will be the first to report those events.

CMS Adds LMSA NFMSA Arrangement Rules

In a continuing effort to contain costs and remain fiscally responsible, the Centers for Medicare and Medicaid (CMS) is finally addressing inconsistencies in its payment processes based on the underlying nature of its Beneficiary's health care claims. Beginning October 1, 2017, the agency will launch two new set-aside procedures, one for Liability Insurance injury claims and one for No-Fault Insurance injury claims (collectively known as Non-Group Health Plans, or NGHPs). By doing so, CMS intends to reduce or eliminate payments made to Beneficiaries who have other insurance opportunities available to cover the costs of their injuries, regardless of the cause of those injuries.


The changes are in response to a long-awaited General Accounting Office (GAO) report that investigated Medicare program effectiveness in cases where there was also liability or no-fault insurance available. In its Change Request (CR) 9893, the GAO addresses the policies and program updates necessary to create Liability Medicare Set-Asides (LMSAs) and No-Fault Medicare Set Asides (NFMSAs), similar to Workers Compensation MSAs. CR 9893 also instructs Medicare contractors to deny payments when there is an LMSA or NFMSA account available.


Specifics of Denied Codes

After October 1, no Medicare payments will be made for claims related to diagnosis codes connected to an open LMSA or NFMSA. The contractor will use Claim Adjustment Reason Code 201 and Group Code PR. Additionally, the contractor will include the Remittance Advice Remark Codes that are appropriate to the case, such as:


Driven by Economics

After implementation of the rule that all NGHPs report payments made on behalf of injured Medicare beneficiaries, the GAO investigation revealed the workloads of all three CMS contractors grew significantly. During the three years from 2008 to 2011, the number of voluntary NGHP MSP reports rose from 142,000 to approximately 392,000; the number of recovery cases grew from 238,000 to about 480,000, and the number of Medicare Set-Aside proposals went from about 20,000 to about 29,000.


Each of these cases represented a situation where Medicare was asked to or had already covered costs that were or should be the obligations of another insurer. The agency estimates the savings of costs avoided or recovered totaled approximately $124 million over those three years. Because neither Liability insurers nor No-Fault insurers are currently required to establish Set-Asides for the future health care costs of injured Medicare beneficiaries, adding rules that require them to do so would reduce Medicare's obligation to pay for those when the primary insurance runs out.


CMS Follows Through on Previous Comments

In 2016, CMS sent out an Alert that it was contemplating expanding its voluntary MSA review process to include reviews of both NFMSAs and LMSAs. When it issued its Workers Compensation Review Contractor (WCRC) Request for Proposals (RFP), that document included language suggesting that the chosen Contractor would review LMSAs and NFMSAs, as well as its traditional Workers Compensation MSAs. The RFP also indicated that those reviews could begin as early as July 2018.


As of October 2016, CMS was still in the process of developing the guidelines for LMSA and NFMSA arrangements, especially the sub-regulatory guidance principles, although, at that time, it also noted that the guidance would be available "within the next two years." Establishing an LMSA or NFMSA may prove trickier than setting up a WCMSA due to complicating factors such as comparative negligence or apportionment issues; presumably, the guidelines will address these matters.


What does appear certain is that CMS will add fields to its Common Working File to account for LMSAs and NFMSAs by October 1, and that, beyond that date, providers will not be permitted to bill Medicare when the Beneficiary has an LMSA or NFMSA account available.


The GAO report suggests there may be significant financial savings available to CMS if liability and no-fault claims are subject to the same MSA requirements as workers compensations claims. Accordingly, it is more than likely that the agency has just started its process to capture those gains, and that the incoming instructions are just the first step.