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My favorite day of the year

This year Father’s Day and the Summer Solstice fall on the same day – making for a very long day here in upstate NY with lots of daylight so I can loll around while being waited on (well, maybe not that last part).

While I was busy inundating your inbox with posts on the profitability – or lack thereof – of workers’ comp, a bunch of other stuff happened.

Another shot in the subrogation/third party liability battle was fired by Kentucky’s Medicaid program.  According to WorkCompCentral’s Ben Miller, hundreds of letters have been sent to work comp insurers in an attempt to ascertain if specific individuals’ medical care is due to a work comp injury.  The rationale is clear; Medicaid doesn’t want to pay for medical care it doesn’t have to.  As a taxpayer I completely support this.  Where it could get really sticky involves settled claims; if the work comp insurer/employer has settled the claim, my assumption (always dangerous) is the settlement requires the claimant to use those funds to pay for injury-related medical care.

What if the claimant doesn’t have any of the settlement dollars left?  If the claimant doesn’t pay, is the work comp insurer/employer liable? Who’s going to be stuck with the bill; the claimant?  the provider? Medicaid? another insurer?

Oh boy.

A terrific article in Harvard Business Review on what private equity investors do when they buy companies notes three distinct types of “engineering”; financial, governance, and operational.  Lots of insight, data, and examples make this a must read for anyone considering a transaction, or trying to understand how PE firms work.

Activity in the oil patch is slowing down, but claims counts are not going up.  Reuters quotes a Travelers insurance exec who’s a bit surprised about this; I have a call into Travelers to see if we can get more insight into the issue, and will share whatever I learn.

The new, updated Washington Guidelines for Prescribing Opioids for Pain are out; a product of the Agency Medical Directors (AMD), the new guidelines address opioid usage for many different conditions, cover special population issues, and update and expand a variety of treatment- and risk-assessment-related topics.  With five years’ experience under its belt, the AMD have learned a lot, lessons that other jurisdictions would be well-served to consider.

Finally, for many families in Charleston – and elsewhere – this Father’s Day is anything but joyful.  If I may be so bold, I’d suggest we strive to be part of the solution.

6 thoughts on “My favorite day of the year”

  1. The issue of who is responsible for payment when claimants settle their WC claim has been an ongoing issue here. We’ve been told that the funds that the claimant receives is to pay for ongoing Medical care related to their WC injury, as there is probably not a private plan out there that will cover a work related visit. However patients that have a government funded insurance plan state that we have to bill their private insurance, is this accurate? Then there is the matter of the threshold amount and how/when does that come into play. Would love to know the solution.

    1. Hi Patti – welcome to MCM.

      Generally speaking, claimants who have settled their WC claims are supposed to use those settlement funds to pay for care related to their claim. I don’t follow your question about the government funded insurance plan; these individuals shouldn’t have a “private” insurance plan.

      1. We find that a lot of the patients that receive settlements, exhaust their funds on other things such as paying off bills, buying a new car, etc, leaving no money left to pay for medical, then apply for Medicaid. My understanding is that Medicaid is income based, if a claimant spends the settlement money recklessly, they have nothing to claim and then pick up Medicaid insurance.

        1. Thanks Patti – My guess is other states will do what Kentucky is and refuse to pay for WC-related care. “When?” is the question.

  2. Joe:

    Great insights. The Kentucky Medicaid subrogation is a precursor to a much bigger problem when you consider all 50 state Medicaid programs and Medicare. While CMS requires set-asides, there is no guaranty that the injured worker will responsibly manage those funds. I can see a time when settlement set asides will have to go into some type of managed account, like an HSA, to make sure the funds are used appropriately. Otherwise, the taxpayers or insured health care users will end up bearing the cost of the irresponsibly managed settlements.

  3. The practice of settling out the injured worker’s future medical costs for a discounted lump sum has always created potential for a burden on public health care programs like Medicaid and Medicare and even on health insurance programs. Set aside programs are not the answer as long as there is an opportunity for the injured to self-administrate their set-aside. As a sophisticated workers’ comp professional with extensive background in medical bill review for my state, I would never advocate self-administration. Self-administration requires that the patient open an interest bearing account for the set aside monies and submit proof to the agency that the monies have indeed been ‘set aside.” The patient must negotiate with the health care provider to accept payment to the applicable workers’ comp fee schedule for each and every service rendered, pay for the service and keep a detailed accounting of expenses paid and submit it to the agency annually. While I certainly possess the skills and expertise to do this, why would I ever want the administrative hassle? As long as injured worker attorneys are paid based on a percentage of the lump sum settlement amount which is larger if it includes future medical costs, they are not likely to adequately explain to their clients the complex obligations of set-aside self-administration or the potential ramifications of spending the set-aside money on a new car or paying off bills. I agree that it is likely that a managed account like an HSA is going to likely be developed for set-aside monies but am concerned that there isn’t an existing contract benefit administrator equipped to handle the jurisdictional bill review and payment processing nightmare associated with such a HSA.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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