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"What we're seeing, primarily in California, is an organization hired by the Department of Health Care Services to collect information from workers' comp self-insured employers or carriers for the purpose of determining if they have, perhaps, paid for . . . services that should be covered under workers' comp," said Darrell Brown, workers' compensation practice lead for third-party administrator Sedgwick CMS. "Much like the [federal government is using the] Medicare, Medicaid, and SCHIP Extension Act [to collect] information to determine whether or not there are recovery possibilities from workers' comp [under Medicare], we're starting to see some of that recovery on the state level, particularly for Medicaid."

Letter to workers' comp payers. The department's website says the action falls under its Workers' Compensation Recovery Program. The company hired by California has begun sending letters to self-insureds and carriers seeking information.

Medi-Cal is California's Medicaid program. According to its website, it is "a public health insurance program which provides needed health care services for low-income individuals." It is funded by the state and the federal government.

The letter cites California Labor Code (sections 14124.89 and 14124.90) saying it requires "every insurer, or health care service plan to provide information to DHCS concerning coverage of any beneficiary."

While the process is only at the data collection stage, it seems clear this is just the beginning, Brown said. "It's going to lead to recovery opportunities for the states, with their shrinking budgets. We absolutely expect it."

The letter indicates the agency is poised to pursue the necessary steps to collect monies it believes were inappropriately paid by Medi-Cal rather than a workers' comp payer.

"DHCS is required to recover payments made by the Medi-Cal program when workers' compensation insurance is available and the carrier is liable for payment," the letter says. It quotes the state Labor Code as saying any carrier "shall enter into an agreement with the department to permit and assist the matching of the department's Medi-Cal eligibility file against the carrier's claim files, utilizing, if necessary, social security numbers as common identifiers for the purpose of determining whether Medi-Cal benefits were provided to a beneficiary because of an injury."

It ends by asking for a contact person to arrange "for the secure electronic data transfer containing policyholder information on active and historic industrial related claims. Such information is confidential and shall not be used or disclosed for any other purpose without your company's express prior consent. Only subscriber files matching DHCS eligibility files will be utilized in this recovery effort."

State vs. federal efforts. It is especially troubling to Brown that the effort is state-based. It appears it will not go the way of Medicare collection efforts.

"MMSEA stands for Medicare, Medicaid and SCIP, so Medicaid is in the title, but the Centers for Medicare and Medicaid Services has specifically indicated it does not include Medicaid," Brown said. "On a town hall call, they've said that, so it's not covered."

The fact that the Medicaid reimbursement activity is state-based only is not good news for workers' comp payers. "For MMSEA you have a defined user guide that clearly spells out what they want," he says. "At the state level, a lot is being defined."

Brown says so far California is the only state he's aware of that is seeking information for possible reimbursement for its Medicaid payments.

"It's scary because we've developed a system for reporting Medicare information," he said. "If you have different states with different requirements, you don't have consistency. At least with Medicare, you have consistency."

Read more at the WorkersComp Forum homepage.

March 28, 2011

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