Here is a truly bizarre case from Illinois that will likely send our many attorney readers scrambling for their statute books.

Christopher Washkowiak worked as a pipefitter. He suffered a serious work-related injury in 2009. The following year, his marriage broke up (dissolved as of August) and he settled his workers comp case in December. The settlement totalled $365K, plus a Medicare Set Aside (MSA) for an additional $70K. Washkowiak’s wife, Rosana, was entitled to 17.5% of the marital assets. She claimed not just 17.5% of the $365K lump sum settlement, but the same percentage of the MSA.

The initial trial court and the Illinois Appellate Court, 3rd District, ruled that Rosana was entitled to the money. Here is the Appeals Court ruling:

Unless there is something about an MSA that removes the MSA funds from the definition of “net proceeds,” the funds fall squarely within the dissolution decrees’s definition of “net proceeds” (paragraph 10).

The court goes on to say that “there is no question that the money is his [Christopher"s] and further that “it is not Medicare’s or [the employer's] money” (paragraph 15).

Finally, the ruling goes on to state that “if he incurs no such [medical] bills, he gets the money back” (paragraph 17).

It is worth noting that Rosana apparently does not have to wait to see if the funds are needed for future medical expenses. The court has foreshortened this process to the point where she gets the money now, as part of the divorce settlement.

Attention All Attorneys!
There are a number of parties who will be alarmed by this ruling:
The Federal Government: Medicare will surely object to the expenditure of MSA funds for non-medical purposes, diluting what is available for future expenses (and thereby defeating the purpose of the MSA).
Insurers and self-insureds: will be shocked to see funds set aside for future medical expenses being used for other purposes; this will inevitably lead to further inflation of future MSAs. (Indeed, Medicare might hesitate to sign off on any settlement prior to determining the relative strength of the marriage – and we all know how much stress disability puts on a marriage…Yikes!)

What if this divorce entailed the conventional 50/50 division of assets? Half the money in the MSA could be spent before the account even got started.

I have never heard MSAs referred to as claimant assets. In my limited understanding, the amount awarded to the claimant is separate and distinct from the MSA. Funds in an MSA can be used only to pay medical bills. In addition, I have never heard of a situation where unspent MSA funds reverted directly to claimants; they would likely revert to the insurer or the self-insured, whoever set aside the money. (If any of our attorney readers have any knowledge to the contrary, please let us know!)

MSAs carry a lot of baggage already: the MSA process slows down settlements while stakeholders wait for federal bureaucrats to check the numbers; MSAs seriously inflate the current cost of settlements, complicating an already complicated process. If this ruling in Illinois is upheld, if MSAs are truly marital assets, then, as the saying goes, “we ain’t seen nothing yet.”

Risk Roundup – Emily Holbrook hosts Cavalcade of Risk #152 at Risk Management Monitor

Florida’s pill war – Timothy Martin and Arian-Campo Flores of the Wall St Journal take in the Florida landscape after the pill mill crackdown in New Front Opens in the Florida Pill War. They note that, “One former hot spot in Broward’s Oakland Park now has just two pain clinics, compared with 26 a few years ago, said Lt. Pisanti. “It changed almost overnight,” he said.”
However, the addicts haven’t gone away. The authors note that, ” … drug users and dealers adapt to the changing landscape and pill demand shifts to retail pharmacies and other establishments that appear to have been set up to skirt the new restrictions.” The article talks about the pressure pharmacists are facing and an increase in forged prescriptions.

Pill pushing docs, take note – My colleague recently posted about the prosecution of Ohio’s Dr. Paul Volkman, the single most prolific prescriber of Oxycodone and related opioids in the entire country. (Four life sentences) Individual states and the feds are starting to get tough about cracking down on this stuff. Joe Paduda talks about the prosecution of drug-dealing docs in CA, FL, CO and other states. Also see Roberto Ceniceros’ blog post on the race to stop opioid abuse.

“Odd Lot” Doctrine – Dave DePaolo talks about the psychology of disability and the inter-relatedness of disability and mental health as illustrated by a case of a injured Wyoming worker. After his claim wended its way through the courts, the worker was granted permanent total disability benefits under the “odd lot” doctrine.

Is obesity getting a bum rap? – Maggie Mahar challenges assumptions about obesity in her post Obesity: Fact vs. Fiction at Reforming Health blog. As with everything Maggie writes, it’s worth a read!

ADA and Veterans – The Equal Employment Opportunity Commission recently released a new Guide for Employers on Veterans and the Americans with Disabilities Act (ADA). EEOC says that, “The revised guides … make it easier for veterans with a wide range of impairments – including those that are often not well understood — such as traumatic brain injuries (TBI) and post-traumatic stress disorder (PTSD), to get needed reasonable accommodations that will enable them to work successfully.” Related:
Guide for Wounded Veterans, which answers questions disabled vets may have about the protections and rights when returning to their former job or looking for civilian jobs.

Market Pulse – Clair Wilkinson of Terms + Conditions posts about more evidence of a slowly turning market citing new reports and studies.

Quick takes

• Cameras at company sponsored events
• Cash-Based Performance Bonuses May Be Hazardous To Your Company’s Health
• Hair, Formaldehyde, and Industrial Hygiene
• The ergonomics of dual computer monitors
• Supervisors and Employees Identify Major Obstacles to Workplace Safety
• Wellness Focus for March: National Workplace Blindness Prevention
• Retaliation: Most Common Charge And Still the Stupidest

I usually receive this question approximately once per month by email. I thought I would address the differences between a payroll and premium audit.

I received a WCIRB (Workers Comp rating organization for California) announcing that as of March 1, 2012 all coverage for Workers Compensation for the last five years was available. The captcha to get in the site was a little irritating, but likely a necessary evil so that a robo-logger could not pull all the data from the website.

I had not heard of the National Insurance Crime Bureau (NICB) until last week. The organization functions as a repository for questionable claims. The organization seems to be somewhat similar to the Index Bureau.

This is from the NICB’s website – The National Insurance Crime Bureau is a not-for-profit organization that receives support from approximately 1,000 property/casualty insurance companies. The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.

The NCIB centers on questionable claims, not all claims. Questionable claims (QCs) are those claims that NICB member insurance companies submit to NICB for closer review and investigation based on one or more indicators of possible fraud.

There are over 1,100 Property and Casualty insurance companies and self-insured organizations that comprise the NICB membership base.

A single incoming QC may contain as many as seven “red flags,” or reasons for further investigation. Each file is categorized according to type, such as property, casualty, commercial, workers’ compensation, vehicle, and miscellaneous.

The areas of possible Workers Compensation fraud that increased the most from 2010 to 2011 on a percentage basis were:

• Duplicate Billing – 207%
  
• Inflated Billing – 113%
  
• Material Misrepresentation on Employment App – 67%
  

The first two are based on questionable activities by medical providers. I found this a little surprising with all of the preferred provider networks and medical bill analysis and review companies that operate in today’s Workers Comp environment. Does this mean that medical providers have become more dishonest in the last two years?

The highest non-medical issue for referral to the NICB was the employee not accurately completing the employment application. Through the years, I have seen this occur often in claims. One of the main things left off of the employment application by the employee is the subject of prior injuries or ability to perform a certain job function.

The %’s above are from certain claims from a set group of insurance carriers or TPA’s. I do not think there was a large enough base to make any type of statistical inferences. The report can be found here. It may be worth a quick read. You will need a PDF reader to open the document.