NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.
Written by Tracey Jones and Heather Baker
On July 26, 2022, the Full Commission issued another extended benefits decision, Messick v. Walmart Stores, Inc. The panel consisted of Vice-Chair Griffin, Commissioner Taylor and Commissioner Goodman. In this case, the Full Commission awarded the claimant extended benefits. The issue of extended benefits was not an issue at the Deputy Commissioner level. The Deputy Commissioner issued an Opinion and Award finding compensable aggravations to claimant’s pre-existing left knee condition and mental health condition, awarded ongoing TTD benefits, and ordered payment for claimant’s dental treatment related to a post-accident fall. Defendants did not appeal the findings or conclusions related to causation, but appealed on the issue of whether the first date of disability versus the date of injury was controlling in regard to determining the indemnity benefits and/or extended benefits owed to claimant under N.C.G.S. § 97-29.
Claimant sustained two compensable injuries; one to her lumbar spine and another to her right knee. Her lumbar spine injury was pre-2011 statutory reform and her right knee injury was post-2011 reform. Both injuries were accepted by Defendants. Defendants also authorized benefits for psychological treatment as a part of the claim. Ultimately, claimant required, among other treatment, a spinal cord stimulator, a knee replacement surgery, and a knee replacement revision procedure, along with increased psychological treatment for depression, which included a 20-day psychological support and physical reconditioning program where she weaned off Oxycodone. Eventually, claimant’s left knee became problematic, and she required a left total knee replacement, which claimant’s doctor opined was the result of her accepted right knee injury. She was ultimately assessed with failed back syndrome, chronic low lumbar pain, and chronic knee pain.
As a part of litigation, the parties deposed nine experts, consisting of claimant’s medical providers and claimant’s vocational expert. In terms of disability, many providers deferred to other providers and/or a vocational expert, and claimant was assigned permanent sedentary restrictions with no repetitive bending or stooping; no lifting more than twenty pounds; no twisting; no kneeling; no climbing ladders or stairs; no walking more than forty yards at a time; and no sitting or standing for more than thirty minutes at a time. The claimant’s vocational expert concluded that there was no reasonable vocational probability that claimant would be able to secure a job and maintain gainful employment. He testified she had a total loss of wage-earning capacity, despite noting that claimant expressed multiple times she would prefer to be working and productive.
The good news is the Full Commission, in keeping with it’s other extend benefits decisions, clearly states that the standard in extended benefits cases is different than the normal standard for proving entitlement to temporary total disability benefits. Applying the revised standard set forth in the 2011 revisions to N.C. Gen. Stat. § 97-29(c), the Full Commission reiterated that to establish entitlement to extended compensation, a plaintiff must show that they have a total loss of the ability to earn wages in any employment. See N.C. Gen. Stat. § 97-29(c) (2021).
However, the Full Commission found the vocational expert’s opinion credible and concluded there were no jobs in the job market within claimant’s functional capabilities. The Commission found ongoing disability for claimant’s pre-reform injury, and the Commission also found a total loss of wage-earning capacity due to her compensable injury for the second post-reform injury. Claimant was awarded ongoing medical benefits and TTD benefits for the pre-reform injury until claimant returns to work or until further order by the Commission and awarded extended benefits for the post-reform injury. The Commission focused on claimant’s chronic pain, age, and length of time from being in any academic situation and relied on the only vocational expert to testify in the case to conclude that claimant has sustained a total loss of her wage-earning capacity.
This Opinion and Award once again demonstrates the importance of expert testimony in these extended benefit cases. The physicians deposed all found claimant’s pain complaints credible and either would not comment on claimant’s ability to work or deferred to a vocational expert as to whether there were jobs available that claimant could perform. The only vocational expert that was deposed clearly testified that claimant had suffered a total loss of wage-earning capacity because of her restrictions and chronic pain complaints. In order for defendants to successfully defend these cases, they must retain or have testimony from both medical and vocational experts that the claimant has some wage earning capacity. If defendants can successfully present this evidence, past cases suggest that they will prevail and extended benefits will not be awarded.
Written by: Matt Marriott
Over the last year, we have seen an uptick in claimant attorneys requesting a second opinion on treatment options under N.C. Gen. Stat. § 97-25(b) and that defendants 1) issue a prepayment for that visit and 2) pay beyond the NCIC fee schedule amount for the visit.
Claimant attorneys argue there are not any medical providers in North Carolina who will accept payment of just the fee schedule amount for second opinion visits and do not require any prepayment. Therefore, they contend they are being deprived of their right to a second opinion on treatment options under N.C. Gen. Stat. 97-25(b) if defendants do not pay a prepayment as well as more than the fee schedule amount for the visit. Additionally, many attempt to argue that the NCIC Fee Schedule does not specifically lay out a billing code for second opinion on treatment options visits under N.C. Gen. Stat. 97-25(b).
While there is no binding case law from the NC Court of Appeals or Supreme Court on these issues, the Full Commission issued a decision in May 2022 that provides a comprehensive analysis explaining:
Commissioners Taylor, Phillips, and Goodman explained in Wyatt v. The Golden Mint, Inc., I.C. No. 20-038523 (May 2022), that N.C. Gen. Stat. § 97-90 continues to prevent medical providers from forcing defendants to pay any kind of prepayment for a visit. The Commission specifically stated:
The charges assessed by healthcare providers for medical compensation under the Act are subject to the approval of the Commission. N.C. Gen. Stat. § 97-90(a) (2021). No “physician or hospital or other medical facilities shall be entitled to collect fees from an employer or insurance carrier until he has made the reports required by the Commission in connection with the case.” Id. “[A] request for a specific prior approval to charge shall be submitted to the Commission for each such fee or charge.” Id. Any health care provider who willfully or intentionally undertakes to submit charges for health care that was not furnished is subject to an administrative penalty, assessed by the Commission, not to exceed ten thousand dollars. N.C. Gen. Stat. § 97-88.3(a)(1) (2021). The clear intent of N.C. Gen. Stat. §§ 97-26 and 97-90 “is to assure that medical and related expenses incurred by an injured employee for which the employer or his insurance carrier is to be liable shall be kept within reasonable and appropriate limits, and the responsibility for the enforcement of these limits rests upon the Industrial Commission.” Morse v. Curtis, 20 N.C. App. 96, 99, 200 S.E.2d 832, 834 (1973), cert denied, 285, N.C. 86, 203 S.E.2d 58 (1974). Wyatt at 9-10.
In addition to confirming in Wyatt that N.C. Gen. Stat. § 97-90 prevents defendants from being compelled to pay a prepayment for a second opinion, the Commission also confirmed N.C. Gen. Stat. § 97-26 prevents defendants from having to pay beyond the fee schedule for a N.C. Gen. Stat. § 97-25(b) second opinion evaluation on treatment options. The Commission held:
N.C. Gen. Stat. § 97-26(a) requires the Commission to adopt by rule a schedule of maximum fees for medical compensation. The Commission, pursuant to that mandate and in compliance with the North Carolina Administrative Procedure Act, 150B et seq., has adopted 11 NCAC 23 Subchapter J Fees for Medical Compensation. 11 NCAC 23J .102(b)(1) sets the maximum reimbursement rate for professional services for evaluation & management at 140 percent of the Medicare base amount. While the Act also contemplates instances in which the fee schedule does not apply to a particular type of service and in those instances, the maximum reimbursement to which the provider is entitled is “the usual, customary, and reasonable charge for the service or treatment rendered,” this option is only available when the Fee Schedule does not apply. See N.C. Gen. Stat. § 97-26(c) (2021). The Commission, in its discretion, takes judicial notice of American Medical Association, Current Procedural Terminology (CPT®) (4th ed. 2019) and specifically the full description of CPT code 99456. Id. at 43. Pursuant to the North Carolina Rules of Evidence, the Commission concludes that this information is capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. See N.C. Gen. Stat. §8C-1, Rule 201(b) and (c). In this instance, the fee schedule’s enumeration of services for “evaluation & management” and the CPT code 99456 description in its entirety contemplates examination by a non-treating physician with a medical history, exam with a diagnosis, assessment of capabilities and impairment, “development of future medical treatment plan; and completion of necessary documentation . . . .” A 97-25(b) second opinion examination encompasses an extensive medical history, a physical exam, diagnosis, assessment of capabilities and impairment, and development of future medical treatment plan. Thus, the Medical Fee Schedule and specifically CPT code 99456 contemplate and encompass the professional services involved in a second opinion examination. Wyatt at 8-9.
After verifying that defendants do not have to pay beyond the fee schedule for a second opinion evaluation on treatment options under N.C. Gen. Stat. § 97-25(b), the Commission established that $301.23 was the correct amount under the fee schedule for a second opinion under N.C. Gen. Stat. § 97-25(b), as laid out in CPT code 99456.
A decision from the Full Commission is not binding case law in the same way an opinion from the NC Court of Appeals or Supreme Court would be. With that said, Wyatt establishes that the Full Commission sides with defendants about not being responsible for any kind of prepayment when a plaintiff requests a N.C. Gen. Stat. § 97-25(b) second opinion evaluation on treatment options, and about not being responsible for payment beyond the fee schedule for such a visit.
While this issue remains a hot topic and could evolve in the future once the appellate courts address the issue, for now, defendants are within their rights to not issue any prepayment or pay beyond the fee schedule when a plaintiff attorney is demanding that those conditions be met.
Finally, based on Wyatt, CPT code 99456 is the correct billing code to apply to a second opinion evaluation under N.C. Gen. Stat. § 97-25(b), and the correct fee schedule amount is $301.23 for such a visit.
Written by: John Tomei
In these challenging economic times, which include inflation and rising costs of workers’ compensation coverage, one way employers can reduce their workers compensation insurance coverage costs is to request the inclusion in their policies of deductible provisions. In addition to premium cost savings, deductible plans can improve employers’ cash flow, provide increased tax deductions, and allow for more control over workers’ compensation costs.
An excellent source of information regarding workers’ compensation insurance deductibles can be found in the North Carolina Rate Bureau’s North Carolina Workers Compensation Basic Manual, particularly in Rule 5 – Policy and Endorsements, sections of which are referenced in italics below. Rule 5 – Policy and Endorsements of the North Carolina Workers Compensation Basic Manual
In North Carolina, each insurer transacting or offering to transact workers’ compensation insurance in North Carolina may offer deductibles to employers. Deductible coverage is affected by attaching the Benefits Deductible Endorsement, WC 00 06 03 to the policy. However, it is important to know that an insurer is not required to offer a deductible to an employer.
To the extent an insurer is agreeable to offering a deductible to an employer, deductibles may be available for total combined medical and indemnity benefits in amounts of $100, $200, $300, $400, $500, $1,000, $1,500, $2,000, $2,500, and $5,000 per claim. A selected deductible applies on a per claim basis. More specifically, the deductible must apply separately to each claim for bodily injury by accident or disease.
A deductible does not affect the claims adjustment process. If a claim occurs, the insurer will investigate the injury, pay providers for medical treatment, and make disability payments to eligible workers. The insurer will then bill the employer for the deductible portion of the claim. As noted in the Manual, the claim is first paid by the insurer, which will then be reimbursed by the employer for any deductible amounts paid by the insurer. The employer is liable for reimbursement up to the limit of the deductible chosen. The payment or nonpayment of deductible amounts by the employer to the insurer is treated under the policy insuring the liability for workers’ compensation in the same manner as payment or nonpayment of premiums.
The applicable loss elimination ratio (LER) represents the percentage of losses removed when an employer is responsible for losses up to the deductible amount. LERs vary by deductible amount and hazard group. As one might expect, the LER is a key variable used in determining the policy premium credit.
So, the good news for employers in North Carolina is that deductibles are permissible, with varied amounts, on a per claim basis. The insurer pays the claim, and then seeks payment of its deductible from the employer thereafter. If the employer does not repay the insurer for the deductible amount paid by the insurer, then it is treated as non-payment of a premium. Understandably, the amount of the deductible has an impact on the loss elimination ratio (LER), which is used to calculate the policy premium credit.
Written by: Lindsay Underwood
The North Carolina Court of Appeals issued a new decision concerning medical treatment, and what evidence is necessary to prove causation and establish compensability.
In Mahone v. Home Fix Custom Remodeling, the claimant worked for a home remodeling company. On July 24, 2018, the claimant climbed into the attic of a potential customer to take measurements for an estimate and the floor beneath him collapsed. The claimant fell twenty feet and landed in the staircase area of the lower level of the home. He suffered severe injuries to his cervical and thoracic spine, and fractured ribs on his left side. When EMS responded to the injury, the claimant was unconscious. The claimant underwent an immediate surgery for his spinal injuries. Following surgery, a cognitive screening and mental assessment was completed to evaluate for a possible traumatic brain injury (TBI). It was determined inpatient neuropsychological services were not warranted, though the claimant was provided with verbal and written information regarding treatment for a mild TBI. On November 2, 2018, Dr. Lance Goetz wrote a letter stating the claimant was hospitalized and under his care. In that letter, Dr. Goetz stated the claimant had incurred a traumatic brain injury with loss of consciousness. Dr. Goetz was not deposed as part of the case, and the physician who was deposed did not provide an opinion on the TBI or causation either in his records or during his testimony.
Defendants denied the claim on the basis that there was no employer/employee relationship. At the Deputy Commissioner level, the main issues presented were whether the claimant was permanently and totally disabled, and what attendant care the claimant was entitled to. Following the hearing, Defendants accepted compensability of the spine, rib fractures, and hematoma of the parietal bone. The TBI was not accepted. The Deputy Commissioner found that claimant had failed to present evidence regarding how many hours per day he required attendant care, or the appropriate rate of care. Further, it was not yet possible to determine whether the claimant met the requirements for permanent total disability. The claimant appealed to the Full Commission. The Commission entered an Opinion and Award finding the claimant had not presented sufficient medical evidence of causation linking his TBI to the July 24, 2018 incident, and, thus, the claimant was not entitled to medical compensation for the treatment of his TBI. The Commission found the claimant required attendant care but there was insufficient evidence in the record on which to base such an award. Both parties appealed to the Court of Appeals.
The Court ultimately found the Commission applied the incorrect legal standard in denying that the claimant’s TBI was not compensable. The Court opined the Commission erred in stating that the claimant was required to present expert testimony, either at a hearing or deposition, to a reasonable degree of medical certainty, that the TBI was causally related to the accident. The Court held the appropriate standard is that the claimant is required to present expert opinion evidence, not necessarily in the form of testimony, that it is likely that the accident caused the claimant’s injury. Thus, the letter written by Dr. Goetz in which he opined that the claimant’s TBI was likely the result of his July 24, 2018 incident was sufficient to establish causation. The Court reversed the Commission’s Opinion and Award with respect to the compensability of the claimant’s TBI and remanded to the Commission to make findings and conclusions applying the correct standards of proof.
Though we do not have the final decision on remand, this case is a good reminder that if you want to contest compensability or causation of a specific aspect of the claim, you must have evidence to combat the claimant’s evidence, even if said evidence is in the form of a letter or a medical record. In this case, it was likely assumed that since Dr. Goetz did not testify, and did not provide an opinion specifically to a reasonable degree of medical certainty, that his causation opinion would not be sufficient. The Court of Appeals clearly disagreed, and specifically noted that testimony is not required by the Court to establish causation. All that is necessary is opinion evidence. In the event you are presented with a medical report or correspondence from a physician, in which it appears causation is established, even if not to a reasonable degree of medical certainty, it is a necessary next step for defendants to obtain counter evidence, and take deposition testimony of both the claimant’s physician, and any IME or 2nd opinion physician, to support the defense.
Written by: Julie Hooten, Tracey Jones, and Shivani Shah
In a recent decision issued by the North Carolina Court of Appeals, Judge Chris Dillion remanded Blackwell v. N.C. Dep’t of Pub. Instruction back to the Full Commission where a claimant’s appeal to convert her weekly benefits to a single, lump-sum award was denied.
The claimant was a former high school teacher who was injured on the job breaking up a fight. She was diagnosed with multiple physical and mental injuries and the Full Commission found her to be permanently and totally disabled and awarded weekly benefits. The claimant later requested her award to be converted into a single, lump-sum payment, as per by N.C. Gen. Stat. §97-44 (2018). Both the Deputy Commissioner and the Full Commission denied her request and she appealed. The sole issue on appeal was whether the Commission erred in concluding that a lump-sum award under Section 97-44 is never allowed where the sum of future installments is uncertain. The Commission relied on the “Uncommuted Value Clause” of N.C. Gen. Stat. §97-44 and reasoned that it prohibits any lump-sum award which would exceed the sum of the future installments that are being replaced. The Commission denied the claimant’s request on the basis that a lump sum award was not allowed in any situation where the number of future payments was uncertain. Under the original Opinion and Award, the claimant was eligible to receive weekly benefits for the rest of her life. As a result, the number of future installments the claimant was entitled to receive was unknowable because her weekly compensation could be terminated upon her death or a showing that she is capable of returning to suitable employment. The Commission thus concluded that a lump-sum award could exceed the amount she would have otherwise received had she continued to receive her benefits in weekly installments.
In its decision, the Court of Appeals noted that it has held that awards for permanent disability may be paid in weekly installments or in one lump sum. The Court acknowledged that the Commission has the authority, in unusual cases, to award a lump-sum even where the sum of future benefits is not certain, if there is competent evidence tending to show how long the claimant was reasonably likely to receive future benefits. Competent evidence would include a mortality table to determine life expectancy. The Court also indicated that the Commission should discount the sum of expected future benefits when there is competent evidence to set an appropriate discount rate.
The Court’s decision was, essentially, a roadmap for the Commission. First, the Commission should determine whether the claimant has shown her situation to be an “unusual case.” Second, the Commission should consider any competent evidence, such as the mortality table in N.C. Gen. Stat. §8-46, to determine the number of installments that the claimant is expected to receive under her current award. Lastly, in calculating the award, the Commission may discount the expected future installments to a present value.
The Court of Appeals established steps for the Commission to determine whether a lump-sum award is appropriate. The conclusion by the Court of Appeals that a lump sum payment for ongoing weekly installments may be an option is concerning for defendants in workers’ compensation cases. In permanent and total cases, it would behoove the Plaintiff’s Bar to request a lump sum payment in every case in order to collect a fee and ensure their client receives the most benefits he or she can get. However, the Court of Appeals did note that the lump sum award should be ”in the best interest of the employee” and that phrase should be “construed narrowly.” The Court specifically said that trying to reduce credit card debt would not be a reason to grant such an award.
It will be interesting to see how the Commission defines “unusual” in this case. If it is read narrowly, defendants may not have as much to worry about and the implications of this case may be minimal, but if the Commission defines “unusual” broadly, defendants will surely see the ramifications of this case for years to come. We will continue to monitor this case to determine its full impact.
If you have questions about the recent court decision, or other aspects of a workers’ compensation claim in North Carolina, reach out to a member of our Workers’ Compensation team.
Written by: Matthew Flammia
In North Carolina, an injured employee may recover damages from both the workers’ compensation carrier as well as a third-party tortfeasor. In accepted claims, where a third-party causes the compensable injury, the workers’ compensation carrier is provided an automatic lien against any third-party recovery that the injured employee receives arising out of the compensable incident. North Carolina General Statute § 97-10.2 even creates a right for the workers’ compensation carrier to seek subrogation against the third party independently.
According to the statute, the injured employee has the exclusive right to file a suit against the third-party for twelve (12) months. Thereafter, the workers’ compensation carrier has the right to file a subrogation claim until sixty (60) days before the expiration of the statute of limitations. Finally, the injured employee and workers’ compensation carrier can always work together and jointly pursue the third-party claim.
If there has been an accepted workers’ compensation claim caused by a third-party tortfeasor, insurance carriers may have subrogation rights, and there is a chance that an insurer could recover some of the money paid towards the claim. If the injury is caused by third-party negligence, immediately place all parties on notice of the insurer’s subrogation rights and begin to investigate the claim on the best way to recover money paid towards the claim.
If you have questions about subrogation rights or other aspects of a workers’ compensation claim in North Carolina, reach out to Matthew Flammia or a member of our Workers’ Compensation team.
By Nicole Graci of Hamberger & Weiss LLP (NY) and Daniel Hayes of Teague Campbell Dennis & Gorham LLP (NC)
The NWCDN has re-established its Medicare Compliance Committee, and what great timing! On January 10, 2022, the Centers for Medicare and Medicaid Services (CMS) updated the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide, which it does periodically, but this update sent shockwaves throughout the Medicare compliance community. As our first act as a committee, we offer the following analysis of what has become known as “The 4.3 Update.”
CMS’ 1/11/22 update to Section 4.3 of the WCMSA Reference Guide is a strong message about CMS’ view of evidence based or non-submit WCMSA products. On March 15, 2022, CMS updated the Reference Guide again, to clarify that message.
CMS expressed its concern that products commonly called “evidence-based” or “non-submit” MSAs are not adequately protecting Medicare’s interests. Here is the full text of the 1/10/22 update,
4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care
A number of industry products exist with the intent of indemnifying insurance carriers and CMS beneficiaries against future recovery for conditional payments made by CMS for settled injuries. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement. As a matter of policy and practice, CMS will deny payment for medical services related to the WC injuries or illness requiring attestation of appropriate exhaustion equal to the total settlement less procurement costs before CMS will resume primary payment obligation for settled injuries or illnesses. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount.
There has been an increase in the use of evidence based or non-submit WCMSA products in the last few years. Under the theory that CMS’ method for calculating a WCMSA results in inflated medical and prescription expense, resulting in higher settlement costs, evidence based or non-submit MSAs are calculated using alternative methods, resulting in reduced treatment and medication over a claimant’s lifetime and less expense. These products are often accompanied by “guarantees,” offers of post-settlement professional administration of MSA funds, structured WCMSAs and, in some cases, reversionary interests. In response to the 1/11/22 update, the purveyors of evidence based or non-submit MSA products immediately published analyses, arguing that CMS was contradicting the well-established legal reality that CMS pre-settlement approval of a WCMSA is voluntary. Detailed arguments were presented, outlining how CMS was overreaching its authority. CMS responded with the subsequent update on March 15, 2022.
However, a close reading of the January and March updates and review of the Medicare Secondary Payer statute and accompanying federal regulations reveals that the updates are consistent with CMS’ long standing policy that CMS pre-settlement approval, although not required by law, has been and continues to be recommended. The March 15, 2022 update softened the language of the January update, notably changing “will deny” to “may at its sole discretion deny” in reference to post-settlement payment of Medicare covered, causally related services. In addition, the beneficiary/claimant’s burden to attest to proper expenditure of the MSA funds is clarified to include a showing that, “both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.” CMS also clarified that its policy applies to notifications of settlements using evidence based or non-submit MSAs from 1/11/22 forward, but that it is flagging pre-1/11/22 notifications as well. CMS went on to reiterate the legal requirement of the Medicare Secondary Payer statute, regulations, and CMS memorandum that primary payers are obligated to consider Medicare’s interests at settlement, while recognizing that all settlements do not meet the CMS work review thresholds for pre-settlement approval of a WCMSA. It is well known that the CMS work review thresholds are internal and are not safe harbors.
The full text of the March 15, 2022 update is below, with changes highlighted,
4.3 The Use of Non-CMS-Approved Products to Address Future Medical Care
A number of industry products exist for the purpose of complying with the Medicare Secondary Payer regulations without participation in the voluntary WCMSA review process set forth in this reference guide. Although not inclusive of all products covered under this section, these products are most commonly termed “evidence-based” or “non-submit.” 42 C.F.R. 411.46 specifically allows CMS to deny payment for treatment of work-related conditions if a settlement does not adequately protect the Medicare program’s interest. Unless a proposed amount is submitted, reviewed, and approved using the process described in this reference guide prior to settlement, CMS cannot be certain that the Medicare program’s interests are adequately protected. As such, CMS treats the use of non-CMS-approved products as a potential attempt to shift financial burden by improperly giving reasonable recognition to both medical expenses and income replacement. As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate. This will result in the claimant needing to demonstrate complete exhaustion of the net settlement amount, rather than a CMS-approved WCMSA amount. Notes: This official policy shall apply to all notifications of settlement that include the use of a non-CMS-approved product received on, or after, January 11, 2022; however, flags in the Common Working File for notifications received prior to that date will be set to ensure Medicare does not make payment during the spend-down period. CMS does not intend for this policy to affect any settlement that would not otherwise meet review thresholds. This comment does not relieve the settling parties of an obligation to consider Medicare’s interests as part of the settlement; however, CMS does not expect notification or submission where thresholds are not met.
CMS did not change its prior WCMSA Reference Guide language, making it clear that the submission process is completely voluntary, as follows:
There are no statutory or regulatory provisions requiring that you submit a WCMSA amount proposal to CMS for review. If you choose to use CMS’ WCMSA review process, the Agency requests that you comply with CMS’ established policies and procedures.
WCMSA Reference Guide., pp. 1, 9 (emphasis original). Of note, this italicized language is found twice in the Reference Guide.
The Medicare Secondary Payer statute and accompanying regulations have always afforded CMS the authority to deny payment for work-related treatment if a settlement does not adequately protect Medicare’s interests. See 42 C.F.R. 411.46, emphasis added:
§ 411.46 Lump-sum payments.
(a) Lump-sum commutation of future benefits. If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment.
(b) Lump-sum compromise settlement.
(1) A lump-sum compromise settlement is deemed to be a workers' compensation payment for Medicare purposes, even if the settlement agreement stipulates that there is no liability under the workers' compensation law or plan.
(2) If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers' compensation by releasing the workers' compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.
(c) Lump-sum compromise settlement: Effect on services furnished before the date of settlement. Medicare pays for medical expenses incurred before the lump-sum compromise settlement only to the extent specified in § 411.47.
(d) Lump-sum compromise settlement: Effect on payment for services furnished after the date of settlement -
(1) Basic rule. Except as specified in paragraph (d)(2) of this section, if a lump-sum compromise settlement forecloses the possibility of future payment of workers' compensation benefits, medical expenses incurred after the date of the settlement are payable under Medicare.
(2) Exception. If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses.
Essentially, the January and March 2022 updates did not change anything regarding a primary payer’s obligation to protect the Medicare fund by considering Medicare’s future interests at time of settlement. Similarly, the updates did not change the CMS work review thresholds for pre-settlement approval of a WCMSA. Most importantly, the updates did not change the well-established tenet that CMS pre-settlement approval of a WCMSA is voluntary. Rather, the updates simply made clear CMS’ position that evidence based or non-submit MSAs will be scrutinized for consistency with the methodology that CMS uses to evaluate WCMSAs that are voluntarily submitted. This should not come as a surprise, as CMS put considerable resources behind developing a methodology for WCMSA review, engaging review contractors, and promulgating its methods through memorandum, town hall teleconferences, webinars, a robust website, and the WCMSA Reference G.
Certainly, finding a primary payer that never disagreed with a CMS counter-higher WCMSA proposal would be akin to finding a unicorn. All primary payers can cite examples of CMS approved WCMSAs that include outlandish prescription medications, surgeries that will never take place and treatments extending a lifetime for claimants who will cease treatment shortly following settlement. An evidence based/non-submit MSA is a permissible way for a primary payer to address those concerns, but not the only way. Depending on risk tolerance of the parties, CMS submission may still be preferred. Careful preparation of a WCMSA for submission to CMS, especially one prepared by counsel, includes implementation of legal strategies based on state specific workers’ compensation laws and treatment guidelines, and use of contrary medical evidence and/or litigation to effectively reduce prescriptions or treatment BEFORE submission to CMS. The resulting, palatable, CMS approved MSA effectuates settlement, as both the primary payer and the Medicare beneficiary/claimant can be secure in the knowledge that CMS has blessed their schism, evidenced by a CMS pre-settlement approval letter.
Practice Tip: As always, parties should adequately consider Medicare’s interests, whether or not the settlement will qualify for voluntary submission to CMS for formal review. The decision to participate in the voluntary submission process or use an evidence based or non-submit MSA should be made in consultation with counsel or other vendors who are well versed in Medicare compliance matters, and with full cooperation of the parties, on a case-by-case basis.
References:
https://www.cms.gov/files/document/wcmsa-reference-guide-version-35.pdf
Stay tuned for more activity by your Medicare
Compliance Committee - paperless conditional payments, forthcoming Section 111
reporting penalties, Medicare Advantage Plan Liens and more coming your way!
Meet the members live in Nashville at the NWCDN national conference, where we
will be presenting a Medicare Compliance update. Please contact Nicole
Graci of Hamberger & Weiss LLP (NY) or Daniel Hayes of Teague Campbell
Dennis & Gorham, LLP (NC) for more in
Written by: Julia Hooten
Employers and adjusters in North Carolina have encountered the seven-day waiting period requirement when an employee is injured on the job and is out of work. While seemingly clear and straightforward, actual application of the seven-day waiting period to certain occupations or situations can be daunting.
In North Carolina, the first seven days of disability are not payable to an injured employee unless that injury results in a disability of more than twenty-one days.
N.C. Gen. Stat. §97-28, the statute governing the seven-day waiting period, specifies:
“No compensation, as defined in G.S. 97-2(11), shall be allowed for the first seven calendar days of disability resulting from an injury, except the benefits provided for in G.S. 97-25. Provided however, that in the case the injury results in disability of more than 21 days, the compensation shall be allowed from the date of the disability. Nothing in this section shall prevent an employer from allowing an employee to use paid sick leave, vacation or annual leave, or disability benefits provided directly by the employer during the first seven calendar days of disability.” [emphasis added]
But what if the injured employee is someone who works twenty-four-hour shifts, and what if the days missed are not consecutive? Or, what if the employer continues an employee’s salary, does that count toward the waiting period? Let’s take a deeper dive into these frequently asked questions related to the seven-day waiting period.
First, let’s examine the seven-day waiting period for an employee who may work irregular hours or a longer shift. In the situation of an employee who works twenty-four hour shifts fewer days per week rather than the standard work week of five days, the employer and adjuster should be thinking in hours instead days. In this situation, if the twenty-four-hour shift employee misses more than forty hours, then they would be eligible for total indemnity benefits if they missed more than the hourly equivalent of twenty-one days (840 hours).
Likewise, if an employee is disabled for more than twenty-one days because of the work injury, regardless of whether those days are consecutive, the employee is entitled to the waiting period.
If an employee misses more than twenty-one days as a result of a work-related injury, the employee would be entitled to the initial seven-day waiting period, but additional payment would not necessarily be owed since salary was continued.
In contrast, if an employee used sick pay for that first week of disability and was later out for more than twenty-one days, the employee would have to be reimbursed – paid weekly indemnity benefits – for that initial period.
When thinking about when the seven-day waiting period begins, employers and adjuster should confirm whether the employee was paid for the date of injury. If the employee was paid, then the waiting period begins the next workday when the employee was scheduled to return to work. If they were not paid for that workday, it begins on the date of injury.
Similarly, if an employee is partially disabled as a result of the work injury, they may still be entitled to the waiting period if unable to work a full work week. In that case, the employer or adjuster would compare the employee’s post-injury reduction in hours. If the employee misses more than the hourly equivalent of twenty-one days, they are entitled to the initial waiting period.
Is an employee, who was not disabled but ultimately receives a rating which exceeds three weeks/twenty-one days, entitled to the waiting period? Simply put, yes. If the permanent disability is more than twenty-one days in and of itself or if the permanent disability is more than twenty-one days when added to the period of temporary disability, the employee is entitled to payment for the initial seven-day waiting period.
Navigating whether an employee in North Carolina is entitled to the waiting period in certain circumstances can be less than clear for employers and adjusters. It helps to keep accurate records of the employee’s post-injury work schedule and earnings. Be mindful that even with diligent recordkeeping, questions can arise.
If you have questions about the seven-day waiting period, or other aspects of a workers’ compensation claim in North Carolina, reach out to Julia Hooten or a member of our Workers’ Compensation team.
Written by Matt Flammia
In North Carolina, most COVID-19-related workers’ compensation cases are rightfully being denied. The thought initially with COVID-19 claims, and still to a degree with the Delta variant, was that while a claimant will have a difficult time establishing a compensable claim, there are several occupations (i.e., health care workers, first responders, etc.) that could have some compensable situations. However, with the spread and infection rate of the Omicron variant, there is an argument to be made that no COVID-19 claims are compensable at this time and that COVID-19, like the flu, should now be considered an ordinary disease to which the public is generally exposed nationwide as well as in North Carolina.
For COVID-19 workers’ compensation claims in North Carolina, a claimant has the burden of proving: (1) That they were at an increased risk of contracting the virus when compared to members of the general public; and (2) a causal connection between their specific infection and their employment. In other words, the claimant must prove that they were infected while at work, as opposed to outside of work. Further, the claimant’s employment must have placed them at an increased risk of contracting COVID-19.
We are close to two years since the beginning of the pandemic and there still has not been a filed decision from the North Carolina Industrial Commission on the compensability of a COVID-19 claim. This speaks to how the COVID-19 claims are being handled in North Carolina.
Based on recent numbers from the North Carolina Industrial Commission, there have been approximately 5,364 COVID-19 claims filed with either a Form 18 or Form 19. Of those, approximately 40% have no response to the filed Form 19. Of the remaining 3,252 claims that do have some type of a response, it appears that approximately 65% of them were denied with a Form 61; approximately 13% were accepted on a Form 60; and approximately 21% were paid pursuant to a Form 63, without prejudice. In comparison to prior pandemic figures, it appears that the Form 61 denial rate has increased slightly.
Looking ahead, the denial rate likely will increase as additional Omicron variant claims are filed. Simply put, as the transmissibility of the COVID-19 variants increases, there is less of an increased risk in most employment settings, except for limited situations. Compared to the start of the pandemic, contact tracing has become impossible as individuals are more active, and masks have become optional throughout the State of North Carolina. For these reasons, we contend that COVID-19 should now be considered an ordinary disease to which the public is generally exposed and argue that almost no COVID-19 claims are compensable at this time.
If you have questions about the compensability of COVID-19, or other aspects of a workers’ compensation claim in North Carolina, reach out to Matthew Flammia or a member of our Workers’ Compensation team.
Written by: Lindsay Underwood
The most recent case to analyze futility has been issued by the North Carolina Court of Appeals. The case, Monroe v. MV Transportation, relies heavily on the Griffin v. Absolute Fire Control, Inc. case that came down last year to support its findings.
In Monroe, the claimant was in her late 40’s when she sustained her injury. She had a bachelor’s degree, but was working part time as a bus dispatcher and driver for the employer, earning $10.50 per hour. She had been receiving SSD benefits since 1994 for an unrelated medical condition (PTSD). On the date of injury, the claimant slipped while inspecting a bus, hit her left shin, and twisted her back and right knee. On November 7, 2016, she received restrictions of alternating between sitting and standing, and no lifting over 20 pounds.
The claimant’s claim was denied initially but was ultimately heard before Deputy Commissioner Lori A. Gaines and the claim was determined to be compensable. The claimant’s disability was also an issue for hearing, and the claimant introduced medical records that showed her work status as “unable to work secondary to dysfunction.” Her medical providers testified they would have recommended work restrictions. Deputy Commissioner Gaines found that the claimant was disabled from November 7 through November 14, 2016, when she was written out of work. Further, Deputy Commissioner Gaines held that the claimant had been disabled thereafter until she returned to work. The Full Commission disagreed. It was noted that the claimant was 51 years old, was a part-time dispatcher and bus driver earning $10.50 per hour and had been receiving SSD since 1994. The Full Commission found that the claimant had not produced sufficient evidence to demonstrate a post-injury job search, or that looking for employment would be futile. Thus, because she had not looked for work, she was not disabled and could not meet her burden.
The claimant appealed to the Court of Appeals and argued futility. Under Russell, a plaintiff can meet her burden of proving disability by showing she is capable of some work, but it would be futile to look for other work because of pre-existing conditions like age, unrelated conditions, or lack of education. In this case, The claimant argued that the Commission’s findings of fact were insufficient to support the conclusion that she failed to provide any evidence of futility. Specifically, she argued the record contained ample evidence of futility considering her restrictions and other factors unrelated to the injury. The Court in this case cited Griffin. In that case, the claimant was 49 years old with a ninth-grade education, prior work experience limited to construction, and permanent restrictions of no lifting greater than 20 pounds as a result of the work injury. The Court in Griffin found that the Commission’s conclusion that there was “no evidence” to support futility misapplied the law and they reversed for additional findings as to whether the claimant demonstrated futility since the only factual findings in the record were consistent with a conclusion of futility.
The Court felt this case is analogous to Griffin. The claimant was in her 50s at the time of the hearing, had been receiving SSD benefits unrelated to the work injury for several decades, and despite her bachelor’s degree, was working a part-time transportation job earning $10.50 per hour, and was restricted to no lifting over 20 pounds. The Commission still concluded the claimant had not otherwise presented evidence to establish disability and made no findings regarding the claimant’s medical records labeling her work status as “unable to work secondary to dysfunction.” The Court was essentially unable to reconcile the Commission’s findings “or lack thereof” to its conclusion that the claimant failed to present any evidence showing futility.
This case was ultimately vacated and remanded to the Full Commission for additional findings as to whether, under Russell, the evidence the claimant presented is sufficient to establish disability by futility. This case is yet another reminder of how the Court will treat disability arguments regarding futility. Based on this decision, as well as Griffin, it is a good idea for defendants to have labor market surveys, or other vocational assessments completed to support their defense that a claimant is not disabled as alleged. It is also important to note that this case does not eliminate other “futility” factors that need to be present like age, education level, and work experience, to demonstrate that returning to work is futile.
If you have questions about disability arguments regarding futility, reach out to Lindsay Underwood or another member of our Workers’ Compensation team.