Insurance

The Georgia Subsequent Injury Trust Fund (SITF ) recently instituted a new policy pertaining to the settlement of workers' compensation claims in cases requiring Medicare Set-Aside (MSA) trusts.

The SITF has now placed a cap on MSA allocation funds as part of a workers' compensation structured settlement. If the annuity quote, including seed money, exceeds $150,000.00, the SITF will not reimburse any amount over $150,000.00 for the MSA allocation.

In fact, the SITF settlement manager suggests that in some cases the employer/insurer consider contributing the balance above the $150,000.00 threshold if the case is one that, based upon risk analysis, should be settled. Otherwise, the SITF recommends considering bifurcating settlements, and settling the indemnity portion of the claim while reassessing the medical component of the claim at a later time.

Employer/Insurer Funding Overage Contrary to SITF Risk Mitigation Objective

Clearly, the suggestions of the settlement manager that the employer/insurer consider funding any overage runs contrary to the entire concept of the SITF itself which is designed to mitigate risk and exposure based upon a pre-existing injury that was not completely the responsibility of the subsequent employer/carrier. In crafting settlement policy in the face of the increasing uncertainty surrounding Centers for Medicare and Medicaid Services (CMS) and MSA approval, the settlement manger appears to defeat the purpose of the fund itself.

Based upon the SITF policy and the increasing instances of counter higher demands by CMS across the industry, it is not surprising to see MSA policy being shaped that discourages settlement of medical benefits and workers' compensation cases in general. Whether an intended consequence of Medicare policy or not, insurers now clearly recognize that the current MSA review and approval process is a significant obstacle to both the delivery of benefits to injured workers and the ability to properly identify risk and exposure in any case.

I believe that similar policies will be offered in the coming months. However, there are alternatives to the CMS / Workers' Compensation Review Contractor (WCRC) review and approval process that can be utilized in order to ensure both Medicare Compliance and receipt of needed settlement funds to injured workers.