By Mullen & Filippi

Spring is a time for looking forward with high hopes. The baseball season has just begun and, no matter how our team has done so far, we can each be hopeful for a good season. The vegetables we planted with good intentions are starting to grow, and we can be hopeful for a good harvest in the months to come. In that spirit of optimism for the future, we look this time at some developments in progress that we hope will produce improvements in workers’ compensation practice in the future. 

Proposed Legislation to Revise The Medicare Set Aside Process. It was recently reported that Representatives Patrick Murphy and Tim Murphy of Pennsylvania have introduced a bill in the House of Representatives, HR 4796, called the Medicare Secondary Payer Enhancement Act of 2010 (MSPEA), which, if enacted, could significantly improve the approval process for Medicare set asides in cases where they are required.

The proposed legislation would, among other things, create a procedure by which, up to 120 days before an anticipated settlement, a party could request a final demand from the Centers for Medicare and Medicaid Services for the amount required to reimburse Medicare. CMS would be required to respond to that request within 60 days. On receipt of the final demand, the parties could either accept, and include the demanded sum in the settlement, or appeal. Failure of CMS to timely respond would absolve the parties from liability to reimburse Medicare. Alternatively, up to 90 days before anticipated settlement, a party would be permitted to make a good faith estimate of the amount due to Medicare, and tender that amount. The tendered amount would be deemed to satisfy the obligation, unless Medicare contested the adequacy of the payment within 75 days.

We think allowing the parties to obtain CMS approval of set asides in advance of a settlement, and setting time limits for CMS to respond to such requests, would greatly streamline the current process and facilitate settlement of claims. HR 4796 was introduced on March 9 and was immediately referred to the House Ways and Means Committee and the Committee on Energy and Commerce. While there is no guarantee that the legislation as currently proposed will be enacted into law, we will be following the progress of this bill, and will report again as developments occur.

Proposed Changes to The Medical Treatment Utilization Schedule.  As we all know, as part of the workers’ compensation reforms in 2004, the legislature enacted Labor Code section 5307.27, which requires the administrative director to adopt a medical treatment utilization schedule (MTUS). Labor Code section 4600(b) provides that, until the MTUS is adopted, reasonableness of medical treatment is governed by the American College of Occupational and Environmental Medicine (ACOEM) guidelines. In March, the Division of Workers' Compensation posted proposed regulations to update the MTUS, and invited comments from the public. The comment period ended on April 8.

 According to a March 25, Newsline by the DWC, the proposed regulations include new definitions of terms, create a new grading methodology for evaluating medical evidence designed “to insure that treatment received by injured workers is current and consistent with advances in scientific medical evidence”, streamline utilization-review procedures, and require the DWC to post evidence reviews to assist utilization-review physicians and qualified medical evaluators to evaluate the quality of evidence supporting medical treatment requests.

 The DWC received 36 comments responding to the proposed regulations, from doctors, insurance company representatives, attorneys and others. Only one wholeheartedly endorsed the regulations as proposed. Of the rest, most expressed concern that the proposed regulations create uncertainty about the standard of care to be used to evaluate medical treatment, in that the regulations do not adopt one clear standard. Many also expressed confusion about whether or not ACOEM would still be a relevant standard. Many also expressed concerns that the new guidelines would result in delay of treatment to injured workers.

We applaud the DWC’s efforts to adopt appropriate medical treatment guidelines which ensure that medical standards are kept up to date. However, judging from the almost universally negative public response, it appears these regulations are still a work in procrss. We hope that the DWC will consider the public comments and use them to clarify the proposed regulations.

Update on Almaraz/Guzman.  The separate appeals of the WCAB’s decision to the Fifth District Court of Appeal (Almaraz) and the Sixth District Court of Appeal (Guzman) have been pending since October, 2009. Recent developments give us hope that we may be close to a decision, at least in the Guzman case.

Within the last three weeks, additional amicus briefs were filed in the Guzman case and submitted for filing in the Almaraz case. In Guzman, the California Applicants' Attorneys Association filed an amicus brief in support of the applicant on March 25. The California Society for Industrial Medicine and Surgery (CSIMS) also submitted an amicus brief in support of the applicant on March 29, which was accepted for filing on April 5. The California Society of Industrial Medicine and Surgery similarly petitioned to file an amicus brief in Almaraz on April 1, but the court has not yet ruled on whether the brief will be accepted. Of even more significance, the Guzman court asked the parties in March whether they wished to present oral argument. Counsel for the defense has requested oral argument, and we expect it will be scheduled in the next 30 to 60 days.

Usually, oral argument is the last step before the case is deemed submitted, and a decision follows not long thereafter. It is encouraging that the case has progressed to this point, and we look forward to receiving the Court’s decision soon. We remain hopeful that the decision, when it comes, will provide the workers’ compensation community with clearer guidelines for assessment of permanent disability.

<i>Mullen & Filippi is a workers' compensation defense law firm with 11 offices throughout California. This column was reprinted with the firm's permission from its client newsletter.</i>