The MSP Private Cause of Action
The private cause of action and its double damages rule is vested in Medicare via the MSP statute, and it's used to discourage PPs from trying to avoid reimbursing the federal agency for payments it made on its member's behalf. Simply by making the reimbursement payment to the federal agency, the payor eliminates the risk of having to pay it twice (as well as the added costs of litigating the issue).
Confusion was wrought, however, when the MAPs organizations invoked the MSP private right of action and its companion double damages claim, while defendants declared them to be ineligible to do so because they are not Medicare. The challenges instigated a series of federal court fights to determine when, if ever, and under what circumstances a MAPs agency had the standing to invoke the MSP private right of action rule. So far, three federal circuit courts have weighed in on the issue, and other courts in both federal and state jurisdictions are watching to see how the concern ultimately rolls out.
The Medicare Secondary Payer (MSP) law requires that "Responsible Reporting Entities" (RREs) notify the Centers for Medicare and Medicaid Services (CMS) when a Medicare beneficiary (or soon-to-be beneficiary) is injured. Failure by an RRE to notify CMS of such an injured person may result in significant “civil monetary penalties” (CMPs), according to federal law. CMS has announced that it will begin developing rules around enforcing this CMP provision in late 2019. The announcement raises several questions that are of concern to insurers of any sized company (including self-insured companies).
MSA Confusion Reigns in Third-Party Liability Cases
The confusion caused by gaps in CMS regulations regarding Medicare Set-Asides (MSAs) continues to grow. An aging population ensures that more people will become potential Medicare claimants if they are injured for any reason. While CMS has provided clear guidelines around the development of MSAs when injuries occur on the job, it has not been so forthcoming when those injuries occur in a third-party liability setting. Without such guidelines, both applicants/claimants and their legal representatives face potentially devastating consequences if they fail to 'guess correctly' about the appropriate use or non-use of an MSA in a third-party liability case.
The unique and evolving constellation of symptoms and conditions caused by the virus are not just confusing medical personnel, however. Legally, there are new challenges presented by the virus that have never before been seen by the WC and legal systems. As cases flowing from these issues mature and claimants seek support as they recover, their claims will most likely change how work-related COVID cases - and cases originating from the pandemic itself - are managed in the legal setting.
Medical Pricing Impacts MSA Values
Workers’ Compensation Insurance plays an integral part in America's economy by allowing employers, either privately or through their workers’ compensation insurers, to cover the medical costs stemming from on-the-job injuries. As a corporate expense, the funds used to pay those premiums and fees are taken off the top of corporate revenues, so keeping them as low as possible is essential to ensure that the company remains economically viable.
Additionally, the value of those fees is a critical component of Medicare Set Aside accounts (MSAs), which are used to cover injury-related expenses after the injured worker has left the job. Employers who are responsible for generating and funding those MSAs should be fully aware of the costs for professional medical services in their community to ensure the value of the MSA covers the actual future costs of needed medical services.
Why Workers’ Comp? Why MSA's?
The concept of worker protection through employment is a recent one, but its history can be traced back to European labor practices. The improvements made in working conditions in the United States have been hard-won and rest on the backs of workers who suffered without protections. The Industrial Revolution brought new challenges to working conditions and compensation, which eventually led to the development of worker protections. The creation of workers’ compensation insurance was a critical step in protecting workers and their families.
In the Workers’ Compensation (WC) world, evaluating the appropriateness of a Medicare Set Aside account (MSA) is (or should be) a standard case management practice for any person with a work-related injury who is nearing or over the age of Medicare or Medicaid eligibility. However, because setting up the MSA in a WC case remains optional per Centers for Medicare and Medicare Services (CMS) regulations, many injured workers and their work- or insurer-based case managers elect not to submit an MSA proposal to CMS. Instead, after filing the requisite notice to CMS that a Medicare-eligible person suffered an injury at work, they then resolve the case without further consideration of the interests of that federal agency. Their failure to include CMS in those deliberations, however, may lay the foundation for significant barriers for the injured person in the future.
Incoming Changes to WCMSA Activities
Everyone updates, including the Centers for Medicare and Medicaid Services (CMS). In October, the CMS released its updated Medicare Set Aside (MSA) reference guide, version 3.0, which replaces version 2.9 released just in January of this year. As participants in the MSA system make changes to reflect the new guidelines, they should be careful to note and follow the new standards.