Medicare conditional payment compliance is difficult enough. When you add complex asbestos-related workers' compensation claims to the mix, it can create a recipe for confusion for insurance carriers, self-insureds, and third-party administrators.
Asbestos-Related Workers' Compensation Claims Background
The Centers for Disease Control (CDC) indicates that each year an estimated 1.3 million construction and general industry workers' in the United States are potentially exposed to asbestos. Onset of asbestos-related illness can take a significant time to manifest itself from the point of initial exposure — sometimes 10 to 40 years. Because the onset of asbestos-related diseases can be so delayed, individuals are often Medicare-eligible while their claims are pending.
Common Issues and Best Practices
Pay Attention to Applicable Workers' Compensation Laws
Due to the long latency period, asbestos cases can involve many insurers and employers all dealing with the same claimant. Local rules for exposure cases can have a major impact on handling the conditional payment obligations. Some states have adopted the common law doctrine known as the last injurious exposure rule. Under this rule, liability for occupational disease resulting from exposure to injurious substances during more than one period of employment is assigned to a single employer or insurance carrier.
Other jurisdictions provide a claimant with the option of election: In this procedure, a claimant can elect to assert claims against one or more employers or insurers. For example, the practical effect of California’s rules governing occupational exposure provides claimants with the option of election against the last employer or the employer with the greatest amount of exposure.
It is important to understand how applicable state-level workers' compensation guidelines may intersect with Medicare Secondary Payer (MSP) provisions. States that allow for election or that have adopted the last injurious exposure rule create scenarios in which some payers may face greater (or lesser) exposure — including conditional payment exposure.
When multiple defendants are involved, the insurer that bears the primary risk will often take the lead investigating Medicare conditional payments. Since this entity bears most, if not all, of any potential conditional payment exposure under the MSP, it will often coordinate reimbursement to Medicare or engage the Benefits Coordination and Recovery Center (BCRC) in disputing conditional payments.
Ensure Communication and Coordination
In multiple-defendant situations, it is important for all parties to ensure proper communication with the lead defendant representatives and other involved parties. Medicare conditional payments can become a hot potato when there are multiple settling defendants, but thorough communication mitigates this risk substantially.
Poor communication can result in multiple reports of injuries, incorrect dates of incident, and other issues that lead to conditional payment cases containing discrepancies and errors — all arising from the same case. If a global settlement is reached, the preference is often to consolidate conditional payment claims data into a single recovery case with the lead defendant. This procedure allows the settling parties to combine all outstanding recovery claims into a single case at the BCRC, allowing for one-time final resolution of conditional payments. It is also critical that settlement documentation outlines exactly how Medicare conditional payments were addressed, including recovery and reimbursement procedures and obligations between all settling parties.
An insurer may have many factual and legal bases for denying or disputing an asbestos claim. The BCRC always defaults to a position of viewing all payers as primary payers responsible for reimbursing conditional payments. While it is beyond the scope of this article to expound upon the differences between how MSP provisions operate relative to different insurance coverage types, it is important to note that the available procedure to dispute conditional payments in denied workers' compensation claims does not translate to the third-party liability insurance.
This article addresses only a few — albeit critical — issues related to workers' compensation asbestos claims and conditional payment compliance. When combining complicated claims and complex compliance obligations, questions are bound to arise. For more information on how to navigate these issues, please contact Shawn Deane, assistant vice president of product development, at email@example.com.