New Georgia W.C. Law to Impact Ultimate Values for Certain Workers’ Compensation Medicare Set Asides
Roy Franco
October 8, 2013

Several amendments to O.G.G.A. Section 34-9-200 (Georgia Workers’ Compensation Act) recently took effect after passing the Georgia legislature by unanimous vote.    One amendment, noteworthy for Workers’ Compensation Medicare Set Asides (WCMSA) is a new 400 week limit imposed on medical benefits for claims occurring on or after July 1, 2013 for non-catastrophic injury claims.   This change in the law harmonizes medical benefits with a similar limitation on Indemnity benefits for non-catastrophic injuries that occurred several years ago.    For claims occurring on or before June 30, 2013, lifetime medical benefits remain in place.

The Medicare Secondary Payer Act, as interpreted by the Centers for Medicare & Medicaid Services (CMS), requires Medicare’s interests be protected when a workers’ compensation claim is settled.  CMS reserves the right to not recognize a settlement if it appears to represent an attempt by the Parties to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition.   See 42 C.F.R. §411.46(b)(2).  To allow Parties the ability to settle with “peace of mind” that CMS would not interfere with their agreement, a recommended process was created for approval by the Agency of a WCMSA.  When approval is secured in this manner, CMS, through its contractor will issue a letter that the WCMSA “adequately considers Medicare’s interest.”   While not a perfect system, it is the best method available for Parties to bring certainty in concluding a settlement agreement.  This recommended process certainly allows for Parties to come up with alternatives, but without approval, such alternatives carry risk of a workers’ compensation claim potentially re-opening to litigate claims against CMS.
When evaluating a potential Georgia workers’ compensation settlement which will include a WCMSA, the Parties must first determine if the new medical benefit limitation is applicable which depends on possibly two factors.   First, did the injury or illness occur on or after July 1,2013?   If the answer to that question is yes, then the medical benefits are possibly limited, if and only if, the injury or illness is non-catastrophic as defined under O.C.G.A. §34-9-200.1(g).    Because Indemnity benefits were already limited for non-catastrophic injury cases in Georgia, the law is fairly settled on what constitutes non-catastrophic.    The easy cases are injuries involving amputations, severe paralysis, severe head injuries, severe burns, and blindness.  However, the statutory definition for non-catastrophic injury also includes situations where the nature and severity prevents the employee from being able to perform his or her prior work and any work available in substantial numbers within the national economy for which the employee is otherwise qualified.  This left a possible open door for injured workers’ to possibly claim every injury as catastrophic involving disability.  However, the Courts have narrowly interpreted this part of the statute in Davis v. Carter Mechanical, Inc., 272 Ga. App. 773 (2005) in favor or the employer.  Consequently, the injured worker can only demonstrate catastrophic injury for unlimited benefits where they can establish that no potential positions existed in the national economy that for the injured worker, not that there were no actual job openings.  As a consequence, the expected increase in catastrophic injury filings that were expected when the indemnity benefits were limited, never matured; and  we can expect the status quo with this new law.  Expect  WCMSA submissions to include SSDI disability situations which will need to limit medical benefits because of the new law.
For situations where the new medical benefits limitation in place for the claim, the WCMSA takes on more of a legal determination than a clinical one.  No longer would a rated age be necessary, all that is in play are the remaining medical benefit weeks.    Also, the CMS contractor responsible for WCMSA review will need to be educated on the new Georgia law as part of any submission.   This would include appropriate references to Medicare regulations which CMS admits it remains in the primary plan position where benefits are not authorized under the law.  In addition to regulations, developing legal precedent should also be presented to the review contractor for their analysis.  The point here is to arm the Contractor with the analysis as to why rated age is not being used to calculate the time period medical benefits should be payable under the WCMSA.
The review contractor should learn to treat Georgia workers’ compensation claims subject to this new benefits limitation in the same manner they presently treat non-subscriber claims out of Texas which also includes a limitation on medical benefits.  If the contractor should disagree, it may make sense for the Parties to proceed to the Board and seek approval of the settlement, and then consider appeal rights under the new SMART law.   While the WCMSA process is recommended and the Parties have no right of appeal, the issue being appealed is not the value of the WCMSA, but the Contractor’s determination not to apply the law that requires CMS to be the primary plan for benefits not covered by the workers’ compensation law or plan.
Franco Signor provides both clinical and legal analysis when it prepares the WCMSA.  Clinical analysis is appropriate to make certain the right medical and prescription benefits are related to the injury and/or illness being released, however, legal analysis is necessary to make certain the review contractor is taking into consideration the elements of state law that places Medicare into a primary plan status.  We see several states developing its law to limit abuses to life-time medical benefits.   An example is California in passing and implementing SB 863.  This law provides for an expedited method to modify medical treatment plans.  Treatment that falls outside the plan is not covered by the workers’ compensation law or plan and should be leveraged in preparing the final WCMSA for approval to the review contractor.  We look forward to assisting you in your next WCMSA preparation and submission to the review contractor.