A new law on the books introduced in the Senate on Dec. 18, 2007 and signed by the President on December 29, 2007 is going to have significant impact on how the workers' compensation system operates in the future concerning Medicare Secondary Payer (MSP) issues.
For years it has been a dirty little secret in the Workers' Compensation Industry that the insurance carriers were shifting the medical liability from themselves to Medicare. Enacted in 1980 the Medicare Secondary Payment Act has had major enforcement problems and Medicare has continued to bleed dollars. Struggling with the issue and after major reports of a failing system, Medicare in 2001 issued the famous Patel Memorandum establishing a system where the workers' compensation industry would be required to obtain Medicare consent before future medical benefits could be compromised. Medicare also established a recovery program from benefits that were paid in the past and actually the responsibility of the workers' compensation system.
Plagued by the multiple network of workers' compensation programs and reluctant players in the system to provide data, Medicare has struggled to establish a efficient program. Attorneys, claimants, insurance carriers and the agencies themselves have been reluctant to provide information to Medicare and in turn Medicare has had to seek information through convoluted reporting procedures.
A stagnating system has caused those in the workers' compensation industry to complaint that that the process is too slow and that the workers' compensation has been placed on life support systems. Additionally, the major stakeholders in the system, the insurance carriers and the employers have made failed attempts to cut Medicare off at the knees by eliminating and reducing the past due recoveries and the potential future medical payments.
The Medicare, Medicaid, and SCHIP Extension Act of 2007 requires workers' compensation carriers to submit information to Medicare on a schedule and in a format prescribed by the Federal government or be subject to a $1,000 a day fine for each violation.