Tag Archives: progressive casualty insurance

An Unprecedented Work Comp Ruling

The March 2016 opinion  in Negron v. Progressive Casualty Insurance by a federal district court was an unprecedented ruling against Progressive for filing a false or fraudulent claim under the Medicare Secondary Payor Act (MSP) and causing a governmental agency (Medicare) to wrongfully pay for benefits. The decision raises a broad issue for workers’ compensation.

Before MSP, Medicare and other federal programs paid for medical services even if the beneficiary was covered by another program. With increased longevity and escalating medical costs, though, the federal government could not continue to pay for medical costs that were already covered by other plans. Therefore, in 1980, Congress enacted MSP to bar Medicare payments where payment has been made or is reasonably expected to be made promptly by a primary plan. MSP also requires that certain claims-specific information be reported by liability insurance (including self-insurance), no-fault insurance and workers’ compensation insurance.

The connection to workers’ compensation comes because it allows an injured worker to potentially be  entitled to receive future medical benefits. Settlement of workers’ compensation claims is either by stipulation (future medical treatment is typically left open) or by compromise and release (where future medical issues are paid out). But if Medicare pays for a work-related condition covered by future medical payments that have been settled through workers’ comp, this could constitute fraudulently inducing a Medicare payment and be subject to the False Claims Act, a federal law that imposes liability on persons and companies that defraud governmental programs.

See also: Whistleblower Suits: Emerging Risk on MSP

Under the False Claims Act, private individuals may bring a lawsuit on behalf of the government in exchange for the right to retain a portion of any resulting damages award. Therefore an injured employee who is a Medicare recipient may bring an action against the responsible party if there was payment by Medicare for a work-related injury, and the worker would receive part of the recovery. This may seem far-fetched, but it could happen, so employers need to be prepared.

See also: The Search For True Healthcare Transparency

It would reduce potential overlap and complications if an employer needs pays only for conditions and treatment  that arise out of the course and scope of employment. The best approach to this is to have objective information as to what the employee’s physical condition was before an injury so he can be returned to pre-injury status.

An EFA-STM program can provide that baseline for musculoskeletal disorder (MSD) claims, a leading cost driver in worker’s compensation. MSD claims are often difficult to diagnose and treat, and oftentimes the individual does not receive appropriate care. The EFA-STM program evaluates either new or existing employees with a customized evaluation that is consistent with  the job. The baseline evaluation is not read until there is reason to think a work-related MSD might have happened. At that time, a second test is conducted to not only determine if there is a change in condition but to ensure that the employee receives the appropriate care for any work-related injury.