Category: Daily News

The intrusion of claims for “medical” marijuana as treatment for an industrial injury is an insidious process. It proceeds in a state-by-state push headed toward a tipping point that may lead to an avalanche. Another state high court will soon rule on a case that may add, or subtract from the push.

The Maine Supreme Judicial Court will decide if state law requires Workers’ Compensation Insurance to pay for a millworker’s medical marijuana or if the insurer could be charged as an accessory in a drug deal under federal law.

The Bangor Daily News reports that Justices are set to hear arguments in the case at the Capital Judicial Center in Augusta, which will be the first time the state’s highest court has considered the question of insurance reimbursement for the cost of medical marijuana.

The case pits a former Madawaska mill employee, injured on the job, against the company that administers the mill’s insurance for injured workers.

Gaetan Bourgoin, now 58, of Madawaska, in 2015 sought reimbursement for medical marijuana prescribed for pain due to a back injury suffered in 1989 when he was 29 and working at what is now Twin Rivers Paper Co.

Bourgoin tried a variety of opioid-based painkillers over the years without relief, according to briefs filed in Portland.

In 2015, the Maine Workers’ Compensation Board ordered that Sedgwick Claims Management Services of Memphis, the third party that administers Two Rivers’ insurance plan, to reimburse Bourgoin for his medical marijuana.

The cost of the drug runs between $350 and $400 a month compared to the more than $2,000 a month it had cost for Bourgoin’s opioid-based prescription painkillers, Bourgoin’s attorney, Norman Trask of Presque Isle, said in his brief to the state’s high court.

Attorneys for the mill and Sedgwick appealed the decision, arguing that an insurer can’t be ordered to pay for marijuana since it is illegal under federal law, which trumps state law. The U.S. Department of Justice could prosecute insurance companies for reimbursing people for purchasing illegal drugs, they argued.

In addition to the conflict between state and federal marijuana laws, requiring reimbursement for medical marijuana violates the Maine statute that legalized the drug for medicinal use, Bangor attorneys Anne-Marie Storey and John Hamer, who represent the mill and its insurer, said in their brief.

The Maine Medical Use of Marijuana Act states that it may not “require a government medical assistance program or private health insurer to reimburse a person for costs associated with the medical use of marijuana,” Shorey and Hamer argued.

Trask countered that the state’s workers’ compensation law states that employees injured on the job are “entitled to reasonable and proper medical, surgical and hospital services, nursing, medicines, and mechanical, surgical aids, as needed, paid for by the employer.” Marijuana, in this case, would fall under “medicines,” Bourgoin’s attorney argued.

New Mexico’s appellate court appears to be the only state appellate court in the country that has ruled on reimbursement by insurers for medical marijuana. In three different cases since 2014, New Mexico justices have ruled that state law requires insurance companies pay for medical marijuana.

The WCRC, the entity which reviews Workers’ Compensation Medicare Set-Asides (WCMSAs) for the Centers for Medicare & Medicaid Services (CMS) has issued the award to Capitol Bridge LLC, a government services firm with its headquarters in Arlington, Virginia. The award notice is as of September 1, 2017.

The purpose of the Workers’ Compensation Review Contractor contract is to independently price the future Medicare-covered medical services costs related to WC injury, illness, and disease, and to price the future Medicare covered prescription drug expenses

Over the past several years, requirements for Workers’ Compensation Medicare Set-Asides (WCMSAs) have been somewhat well-established. The Centers for Medicare and Medicaid Services (CMS) now routinely update their WCMSA Reference Guide, providing detailed information on how to handle payment for Medicare-eligible expenses on behalf of beneficiaries who have received settlements in workers’ compensation cases.

For liability cases, however, CMS has been far less clear, making it difficult for claimants and their attorneys to ensure that Medicare won’t seek reimbursement down the road. However, it appears as though some major changes are imminent.

CMS recently issued a notification directing Medicare Administrative and Recovery Contractors (MACs) to create a set-aside process for Liability Medicare Set-Asides (LMSAs), as well as for No-Fault Medicare Set-Asides (NFMSA). The new process is scheduled to go into effect as of October 1, 2017.

The Medicare Secondary Payer (MSP) provision outlined in 42 U.S.C. §1395y(b)(2) and §1862(b)(2)(A)(ii) of the Social Security Act do specifically reference “an automobile or liability insurance policy or plan (including a self-insured plan) or no-fault insurance,” under the umbrella of primary payers for claims related to settlements, judgments, awards, or other payments. The direction given to the MACs should now provide some framework for claimants involved in non-workers’ compensation cases.

Noteworthy of the award is that it is for approximately $60 million dollars, which is safe to say that CMS expects the WCRC to engage in a large number of MSA reviews. According to the Request for Proposal (RFP) for this award the WCRC will also potentially begin reviewing Liability Medicare Set-Asides (LMSAs) and No-Fault Medicare Set-Asides (NFMSAs) as early as July 1, 2018 which is likely the reason for the large award amount, in addition to an increased volume of WCMSAs over the years.

Since 2011, Provider Resources, Inc. has been the contractor reviewing WCMSAs.  There have seen good turnaround times from Provider Resources and it is likely that Capitol Bridge LLC will continue to provide MSA approvals expeditiously.

It will be interesting to keep an eye on how Capitol Bridge reviews MSAs and also adopts updated guidance in the new WCMSA Reference Guide. Since the issuance of the Reference Guide, the industry has seen a shift in some of the WCRC’s approval policies.

The current WCRC is now requiring a court order to approve a zero allocation based upon denial of the claim. Further, with California MSAs in which the employer/carrier has relied upon a binding Utilization Review (UR), WCRC is now requiring an Independent Medical Review (IMR) decision or a court order to support the UR.

“Pile on” is a phrase used in football which describes the action of one or more players jumping on top of a player or group of players after a tackle has been made. The phrase may now be an accurate description of what states are doing to opioid drugmakers.

New Mexico seems to have joined a drugmaker pile on as it sued eight opioid manufacturers and wholesale distributors this month, becoming the latest state or local government to file a lawsuit seeking to hold corporations accountable for a national drug addiction epidemic.

Reuters Health reports that New Mexico Attorney General Hector Balderas accused Purdue Pharma LP, Johnson & Johnson, Allergan Plc, Endo International Plc and Teva Pharmaceuticals Industries Ltd of pushing addictive painkillers through deceptive marketing. The lawsuit also accused wholesale distributors McKesson Corp, Cardinal Health Inc and AmerisourceBergen Corp of breaching their legal duties to monitor, detect and report suspicious orders of prescription opioids.

“New Mexico continues to endure the most catastrophic effects of the opioid crisis, all while major out of state corporations make billions in profits at the expense of our families and communities,” Balderas said in a statement.

The lawsuit followed a wave of cases against drugmakers by Oklahoma, Mississippi, Ohio, Missouri, New Hampshire and South Carolina, as well as several cities and counties in states including California, Illinois and New York. The drug wholesalers have likewise faced litigation, particularly in West Virginia, where several county commissions and cities have the three main ones, following lawsuits filed by the state’s attorney general.

New Mexico’s lawsuit, filed in the First Judicial District Court in Santa Fe County, contended that the drugmakers downplayed the risks of addiction to prescription opioids and falsely touted the benefits of their long-term use. It also accused the wholesale distributors of violating their duties by selling large amounts of painkillers that were then diverted for illicit uses, helping to contribute to the opioid epidemic. The lawsuit seeks damages, including for the costs New Mexico has incurred responding to the epidemic.

The companies have in similar cases denied wrongdoing. The drugmakers have said they acted responsibly in connection with marketing the drugs, which carry U.S. Food and Drug Administration-approved labels warning about their risks.

“While we vigorously deny the allegations, we share public officials’ concerns about the opioid crisis and we are committed to working collaboratively to find solutions,” Purdue, the maker of OxyContin, said in a statement.

Cardinal Health in a statement called the lawsuit “misguided,” saying it was “launched in haste and without any factual investigation to support it.”

In the United States, the Centers for Disease Control and Prevention estimated roughly 1.7 million hospital-associated infections, from all types of microorganisms, including bacteria and fungi combined, cause or contribute to 99,000 deaths each year. And a hospital-associated infection of an injured worker being treated for an industrial injury may give rise to an additional claim for benefits as a compensable consequence injury.

And now a new medical study says that the risk now includes untreatable hospital-associated infections that are deadly.

Chinese researchers say an outbreak of severe pneumonia at a Chinese hospital was caused by hypervirulent, highly drug-resistant, and highly transmissible strains of Klebsiella pneumoniae. Their findings were reported recently in the Lancet Infectious Diseases.

The ST11 carbapenem-resistant hypervirulent K pneumoniae strains were identified in five patients in the intensive care unit (ICU) of a hospital in Hangzhou, China. All five patients – who were admitted to the ICU between late February and April of 2016 – had undergone surgery for multiple trauma followed by ventilation and subsequently developed carbapenem-resistant K pneumoniae infections and severe pneumonia that responded poorly to all available antibiotics.

All five patients died of severe lung infection, multi-organ failure, or septic shock.

Analysis of the 21 carbapenem-resistant K pneumoniae strains recovered from the patients indicated that the strains had almost identical antibacterial susceptibility profiles and shared highly similar DNA fingerprints. Further genetic and phenotypic characterization of one representative carbapenem-resistant K pneumoniae isolate from each patient showed that all five belonged to the ST11 lineage, contained several resistance genes, and originated from a single clone.

“Due to acquisition of a virulence plasmid by classic ST11 carbapenem-resistant K pneumoniae strains, these new strains are simultaneously hypervirulent, multidrug resistant, and transmissible, and should therefore be regarded as a real superbug that could pose a serious threat to public health,” the authors write.

In a commentary in the same journal issue, two experts from Rutgers University wrote that the study describes an alarming evolutionary event: plasmid-mediated convergence of multidrug-resistance and hypervirulence in an epidemic cabapenem-resistant K pneumoniae clone.

Though a similar event had been reported before, the new report on five fatal cases characterizes the virulence and resistance plasmids. The two wrote that the transfer of the virulence plasmids raises worries that the organisms might not only cause untreatable hospital infections, but also serious life-threatening ones in the community.

The new findings underscore the need for new effective antibiotics, and new strategies such as vaccines, phage therapy, and gene therapy for battling drug-resistant organisms offer optimism. “However, the reality is that we are now in a crisis,” they wrote, adding the keys to curbing the new hypervirulent strains are early detection and containment with comprehensive infection control measures.

From a claims administration standpoint, one might question the track record of facilities that are used to treat injured workers, and steer clear of facilities with tenacious infection histories. Some of this information is publicly available, but not widely know.

The Healthcare-Associated Infections (HAI) Program is one of two programs in the Center for Health Care Quality of the California Department of Public Health. The Program was created by mandate to oversee the prevention, surveillance, and reporting of HAI in California’s general acute care hospitals. Since 2010, the HAI Program has produced annual public reports of hospital HAI data to inform choices of healthcare consumers and prompt providers to take actions to prevent infections.

The latest 2015 report identifies 2894 infections and predicted an overall infection rate of 4744 which was then allocated to each of the medical facilities by name on the seven page table.  Surprisingly, the Ronald Regan UCLA Medical Center had 149 observed infections, the highest of any facility on the list.  It is likely that claims administrators can manage the risk of a compensable consequence injury caused by hospital-associated infections by periodic scrutiny of these reports and lists and strategies for the management of claims.

Charles Taylor has agreed to acquire Metro Risk Management LLC (MRM) from Nautilus International Holding Corporation for an undisclosed amount.

MRM was founded in 1996 as a subsidiary of Metropolitan Stevedore Company (the original parent corporation), which was one of the earliest self-insured, self-administered companies in the State of California.

Nautilus and its subsidiaries – Metro Ports, Metro Cruise Services, Metro Shore Services and Metro Risk Management – are a suite of companies known internationally as leaders in stevedoring, terminal operations, logistics, risk management and more.

Charles Taylor is a leading international provider of professional services to clients in the global insurance market. It has been providing services to insurance clients since 1884 and today has over 1,800 staff in 71 offices, spread across 28 countries in the UK, the Americas, Asia Pacific, Europe,the Middle East and Africa.

The deal is part of Charles Taylor’s plans to extend its US workers’ compensation claims capabilities. Based in Southern California, MRM provides state and federal workers’ compensation claims administration services to self-insured clients and insurers.

Acquiring the third-party claims administrator will see the addition of 13 highly experienced workers’ compensation claims specialists to the Charles Taylor team – expanding the buyer’s presence in Long Beach in support of its TPA growth in the US.

James Callahan, Nautilus chairman, president, and chief executive, said the transaction will provide its staff with greater opportunities for career development and advancement.

“We have worked closely with Charles Taylor for many years, and know first-hand the insurance expertise and professionalism of the team. Charles Taylor provides MRM with the resources and expertise to expand its services to a wider range of clients,” he noted.

Christopher Schaffer, USA CEO, Charles Taylor Insurance Support Services, commented: “We are excited to join forces with MRM, given the company’s history of providing quality services and proven expertise to long-term, deeply satisfied clients.”

He said MRM broadens Charles Taylor’s claim services on the West Coast – adding to the core federal workers’ compensation, ports and terminals, marine, casualty, and cyber TPA business.

For Charles Taylor group chief executive David Marock, the acquisition reflects the firm’s continued commitment to growing its TPA business in the US and globally.