Updates in Funding of Future Medical in Workers’ Compensation: Arizona Now Allows for Full and Final Settlements; Opana ER Removed from Market
Heather Sanderson
July 24, 2017

There are two recent updates which may impact workers’ compensation payers looking to finalize and foreclose future medical expenses and which additionally may impact claims that involve a Medicare Set-Aside (MSA).

I. Arizona Passes Bill 1332 Allowing for Full and Final Settlement of Workers’ Compensation Claims
Senate Bill 1332, signed into law by Governor Ducey on May 8, 2017 which will allow for full and final workers’ compensation settlements in Arizona effective October 31, 2017. Previously, workers’ compensation claims were not allowed to be settled permanently. Because the claimant always had the lifetime right to re-open a claim, settlements of workers’ compensation claims were rare. SB 1332 will now allow a workers’ compensation payer and claimant settle a claim once and for all. The full Bill can be found here; however the noteworthy components/requirements of SB 1332 include:

  • The parties may settle or release all or any part of an accepted claim and the period of disability is terminated.
  • There must be a projected cost of all reasonable anticipated medical costs and the parties must take reasonable steps to consider the interests of Medicare, Medicaid, the Indian Health Service, and the United States Department of Veteran Affairs, including establishing a Medicare savings account if necessary.
  • Further, the parties must have conducted a search for and taken reasonable steps to satisfy all medical liens.
  • The full and final settlement between the parties is not valid and enforceable unless it is approved by the Commission. When determining whether to approve a settlement, the Commission must consider whether the settlement is in the best interest of the employee by considering (1) whether the employee’s injuries are stabilized, and (2) the permanency of the employee’s injuries.

Commentary: Workers’ compensation payers in Arizona will now be able to settle workers’ compensation claims as full and final come October 31, 2017. If the claim involves a Medicare beneficiary or a beneficiary that is reasonably expected to become a Medicare beneficiary within 30 months of the settlement, an MSA should be contemplated as part of the settlement, and if applicable, conditional payments should be reimbursed to Medicare. Clearly, Arizona’s legislature was contemplating that the Commission would ensure Medicare’s interests were considered prior to approving a settlement from the statutory language. We stand ready to assist in Arizona claims that will be settled full and final later on this year with a suite of MSA solutions, including our standard Workers’ Compensation Medicare Set-Aside (WCMSA) (submittable to CMS) as well as our Evidence Based Medicare Set-Aside (EBMSA) (not designed for submission to CMS).

II. Opana ER Removed from Marketplace by FDA
The first opioid drug is being removed from the marketplace by the Food and Drug Administration (FDA), Opana ER. As of July 7, 2017, it was announced that Opana ER would be removed from the market entirely due to safety concerns for misuse and abuse.

Commentary: Due to the fact that Opana ER will no longer be available in the marketplace and is no longer FDA approved, Opana ER will no longer be included and allocated for in MSAs, nor will it be covered by Medicare. Opana ER was a costly drug, and the question then becomes, what opioid will the Medicare beneficiary take instead of this drug? The Centers for Medicare and Medicaid Services (CMS), when approving an MSA, generally looks to the last 3-6 months of prescription history to determine which drugs to allocate for in the Part D portion of the WCMSA. Ideally prior to submission of an MSA to CMS the claimant can demonstrate several months of efficacy with a safer, less costly pain management regimen rather than inflated use of costly opioids.