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Letter to Kerry M. Weems, Acting Administrator of Centers for Medicare and Medicaid Services, Re: Excessive Delays of Workers' Compensation Claims


Location: Washington, DC


Chairmen cite backlog of thousands of New Jersey, Michigan claims in letter to Administrator

U.S. Reps. Frank Pallone, Jr. (D-NJ), Chairman of the House Energy and Commerce Subcommittee on Health, and John Dingell (D-MI), Chairman of the House Energy & Commerce Committee, sent the following letter today to Centers for Medicare and Medicaid Services (CMS) Acting Administrator Kerry M. Weems, to express their concerns regarding the backlog of the agency's reviews of workers' compensation settlements.

The Energy & Commerce full- and subcommittee chairs, whose committee has jurisdiction over CMS, noted the high number of outstanding workers' compensation claims in their home states of Michigan and New Jersey, and submitted a list of ten questions for the agency to answer regarding the case backlog.

October 11, 2007

Mr. Kerry N. Weems
Acting Administrator
Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201

Dear Mr. Weems:

It has been reported to us by State officials in New Jersey and Michigan that there is a significant backlog in agency reviews of worker compensation settlements. These reports are a serious concern to us, both as representatives of affected workers in our districts, and also as chairmen of the House Committee and Subcommittee responsible for overseeing the Centers for Medicare and Medicaid Services (CMS).

We understand that CMS must ensure that Medicare is protected in worker compensation settlements. When a worker has both worker compensation and Medicare, either currently or prospectively, CMS reviews the worker's compensation settlement to make sure an appropriate amount of the settlement that will cover future medical expenses is "set aside." This set-aside amount establishes what portion of the future medical expenses will be the responsibility of the employer (or the employer's insurance company) who is the primary payer responsible for those medical expenses resulting from a workplace injury and not the responsibility of Medicare.

CMS approval of the settlement also ensures that CMS will not later seek additional payment from the injured worker, employer, insurer, or attorneys. Arriving at this set-aside amount requires an investigation by allocation experts, but what allocation is accurate is frequently a matter of dispute between CMS and both claimant and employer/carrier attorneys.

CMS's own web site guidance entitled "Review Process of WCMSA," states that CMS seeks to review and make a decision on settlements within 45 to 60 days after the documentation is complete.

In order to better understand the current situation with regard to processing of workman compensation claims, we request that you respond to the following questions by no later than Friday, October 26, 2007:

1. Please provide the number of workman compensation claims that are currently under review by CMS as of October 1, 2007.

2. What is the average length of time between submission of a proposed set-aside and CMS's approval of the set-aside?

3. What is the average cost of claims under review? What is the median cost?

4. Is there any relationship between cost of the claim under review and the time for review?

5. How many cases are subsequently appealed?

6. How much has CMS budgeted for review of these set-aside settlements by CMS personnel and contractor staff? What is the ratio of adjudicators to cases?

7. On what basis is the contractor administering the set aside program paid? What performance standards or other criteria are included in the contract with respect to processing of set-asides? Are these standards being met?

8. What is CMS's estimate for additional funding or other resources needed to bring processing times in line with CMS guidance?

9. What are the primary reasons for cases that exceed the CMS guidance for length of time to process claims?

10. Please compare the caseload, resources allocated to resolution, backlog, and average time for resolution over the past five years.

We believe the current delays by CMS in processing these cases are excessive. We wish to work with you to bring these matters to a quicker resolution and look forward to receiving your responses to our questions. If you need further information, please contact us or have your staff contact Nancy Fatemi (Rep. Pallone's office) at (202) 225-4671 or Amy Hall (Committee on Energy and Commerce staff) at (202) 225-2927.


John D. Dingell Frank Pallone, Jr.
Chairman Chairman
Subcommittee on Health

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