Group Health Reimbursement in the Worker’s Compensation Arena (An Interactive Discussion of Best Practices) Presented by: Douglas M. Feldman Lindner & Marsack, S.C. 411 E. Wisconsin Avenue, Suite 1800 Milwaukee, WI (414) (414) (facsimile) Presented to: NASP Subro Rocks! November 1-4, 2009 Colorado Springs, Colorado

Are All Reimbursement Claims Created Equal? Don’t all states have the same procedure? If the procedures aren’t the same, then how do I know what to do in each state? Do I have to file a specific form with the court? Won’t my reimbursement provision protect my interest even if we can’t intervene? What if the parties tell me that I have to reduce my interest due to a fee schedule?

Are All Reimbursement Claims Created Equal? The parties have told me that the treatment I am claiming reimbursement for was unauthorized. What does that mean? What happens when the worker’s compensation carrier gets credit for payments we have made? What remedies do I have in intervention states versus non-intervention states?

Contractual Right of Reimbursement Created by contract language including: Provision that excludes payments for work-related injuries. Provision that entitles the plan to reimbursement out of any award or settlement, whether or not the claim settled on a disputed basis.

Most States Do Not Allow Subrogation in WC Cases Collateral sources are not permitted to step into the shoes of an injured member in most states. This is why plan language is paramount to establishing a right of reimbursement. A health carrier or disability carrier’s interest will almost always rely upon contract language in a worker’s compensation case.

Intervention v. Non-Intervention Alaska Arkansas California Connecticut D.C. Georgia Indiana Louisiana Michigan Minnesota New Jersey Tennessee Alabama Arizona Colorado Delaware Florida Illinois Idaho Kansas Maryland Missouri Mississippi Nebraska Wisconsin

Am I a “party in interest”? What does it mean to intervene in a WC case? Do I have to intervene or can I just enforce my contract provisions? How do I protect my interest if I am not considered a party to the claim?

Non-Intervention Best Practices Notice – Letter to all parties and the Court. Ask that the WC Court award reimbursement in the event the claim is found compensable. Keep up with developments in the claims process. Know pre-hearing and hearing dates. Be available for settlement negotiations. Be persistent. Follow through regarding enforcement of all policy provisions, including filing suit.

Intervention in Minnesota Best Practices Early identification of claim. File application to intervene under Minn. Stat (1) in timely fashion. Pay attention to all dates and be available. Hire effective representation, not plaintiff’s attorney. Participate in settlement conference.

Intervention in Pennsylvania Best Practices Intervene as a subrogated party under 77 P.S. Section 671 during the pendency of the proceeding. Failure to timely intervene may extinguish a health/disability carrier’s rights. Be aware of and available for all dates. Participate in settlement negotiations. Have effective representation, not plaintiff’s counsel.

Forms Most states do not have a specific intervention form, even if they are an intervention state. There are exceptions, such as Michigan’s Form C. A simple motion to intervene can be used in most intervention states. In many intervention and non-intervention states, a letter providing a notice of lien to the parties and court is most effective if no form is required. A notice of lien letter should be sent in all cases, whether intervention is permissible or not.

Model Language Group Health Reimbursement Language Is Essential to Recovery in a Worker’s Compensation Matter. Ideal language will include both an exclusion for any work-related treatment as well as a solid reimbursement provision that includes reimbursement out of any award or settlement received, even if a claim settles on a disputed basis, reserving all defenses.

Exclusions This policy does not provide benefits for: Treatment of any bodily injury or sickness that is sustained by an employee or covered dependent that arises out of, or as the result of, any work for wage or profit when coverage under any Worker’s Compensation Act or similar law is required for the employee covered dependent.

Worker’s Compensation If benefits are paid and we determine you received Worker’s Compensation for the same incident, we have the right to recover as described under the “Recovery Rights” provision. We will exercise our right to recover against you.

Worker’s Compensation Cont’d. The recovery rights will be applied even though: The WC benefits are in dispute or are made by means of settlement or compromise. No final determination is made that bodily injury or sickness was sustained in the course of or resulted from your employment. The amount of WC due to medical or health care is not agreed upon or defined by you or the WC carrier; or The medical or health care benefits are specifically excluded from the WC settlement or compromise

Right of Reimbursement If benefits are paid under this policy and you or your covered dependent recovers from a responsible party by settlement, judgment or otherwise, we have a right to recover from you or your covered dependent an amount equal to the amount we paid.

Reimbursement Agreements Should I require them? What effect do they have? How effective are they in aiding recovery? Oh no! We don’t have a signed reimbursement agreement. Now what? Do any states require this additional contract before we are entitled to reimbursement?

Hold Harmless Agreements In some jurisdictions, WC carriers will agree to indemnify and defend the employee against any claims for reimbursement that the group health carrier may assert subsequent to settlement. This is an attempt to freeze group plans out of settlements.

Hold Harmless Agreements Are Our Friends Use the hold harmless agreement to your benefit. It equals a deep pocket. Use detective work and threats of civil suit to scope these agreements out. Ask for copies of settlement documents. Follow through with enforcement of policy provisions, even if it means filing suit. This will usually force the WC carrier to open their reserves.

Which states have Fee Schedules? Alabama Alaska Arizona California Colorado Connecticut Delaware D.C. Florida Georgia Hawaii Indiana Kansas Kentucky Maryland Massachusetts Michigan Minnesota Mississippi Nebraska Nevada

…more fee schedules New Jersey New Mexico New York North Carolina Pennsylvania Rhode Island Texas Utah Vermont Virginia Washington West Virginia Wyoming

What is a Fee Schedule? Many states statutorily provide a fee schedule and mandate that medical expenses do not exceed set fees. Some states adhere to usual and customary fees. Some states mandate that the amount billed by a provider or paid by a collateral source is the amount the WC carrier must pay in a compensable claim. Some states have fee schedules but still allow reimbursement to health insurers for the amount paid per the contract with the provider.

Fee Schedules and Settlement Do bills have to be adjusted for the fee schedule if the case is settled on a disputed basis? What arguments can I make when faced with fee schedules and requests for reduction of paid amounts?

Which states have NO Fee Schedule? Idaho Illinois Iowa Louisiana Maine Missouri New Hampshire Ohio Oklahoma Oregon South Carolina South Dakota Tennessee Wisconsin

Authorized Treatment and Employer Directed Care The WC carrier raised the defense that they did not authorize treatment that I am claiming for reimbursement. Is this a viable defense? What if the claim was adjudicated compensable, but the WC carrier is still refusing to reimburse us because they did not authorize our treatment?

Authorized Treatment and Employer Directed Care The WC carrier raised the defense that the participant changed physicians and our bills are not authorized because the physician was unauthorized. What arguments can I make when a case settles on a disputed basis and treatment was not authorized?

Credit to Employer for Group Benefits To Employee Many WC Acts provide for a credit to the employer for employer sponsored group benefits that are paid to or on behalf of the employee. Most of them also require reimbursement to the group plan if the WC carrier is responsible for the loss. Some only give credit for the pro-rata portion of premiums paid by the employer, but the employer is still responsible for reimbursement to the group carrier if the claim is compensable and the benefits are related.

Know the Law of the Applicable Jurisdiction What is the law in that state with respect to compensability of WC claims? What is the law regarding pre-existing conditions? What is the standard with respect to proving an occupational disease? Is intoxication a viable defense? What other defenses are viable?

Negotiation of Reimbursement Interests Make the carrier or claimant argue the merits of the case. Ask for documentation of pre-existing conditions, intervening medical causes, and expenses or periods of disability that are not being claimed. Ask for a analysis and valuation of the case as if the claimant made a prima facie case for every element he has claimed so you can compare evaluate the settlement he received. Pro-rata settlements may be the best route if the parties have backed up their arguments.

Summary of Best Practices Identify claim early Know the law of the jurisdiction involved Notice, Notice, Notice Know the merits of the claim Know your plan language Present your claim properly at hearing Know trial/hearing dates Analysis of Hold Harmless Agreement Understand who you are negotiating with and why Have competent representation, not plaintiff’s counsel.