CMS Alert: Time Frame for Conditional Payment Debts

CMS issued an alert August 5, 2015, regarding a change in the time frame in which outstanding conditional payment debts are referred to the Department of Treasury (DOT) for collection.

Beginning October 1, 2015, delinquent debts for both Non-Group Health Plans (including self-insurance, liability, no-fault, and workers’ compensation) and Group Health Plans will be referred to the DOT for collection 120 days after payment is due.  Currently, debts are referred to the DOT when payment is 180 days past due.

This reduction in the time frame for referral of delinquent debts is an outcome of the Digital Accountability and Transparency Act (DATA Act), which was signed into law in May 2014.

Read the full alert here.

CMS Update: Webinar Announcement

CMS posted a webinar announcement today concerning the transition of NGHP recovery activities to The Commercial Repayment Center (CRC). Follow the link here for the entire announcement.

In order to participate in the webinar, please note the following:

Date: Tuesday, August 25, 2015 

Start time: 2:00 PM EST

Registration and webinar logon URL: https://event.webcasts.com/starthere.jsp?ei=1071085

The announcement stated:

“Effective October 2015, the CRC will assume responsibility for the recovery of conditional payments where CMS is pursuing recovery directly from a liability insurer (including a self-insured entity), no-fault insurer or workers’ compensation (WC) entity as the identified debtor.  The following should be noted regarding the planned workload transition: 
• The transition only includes those cases where CMS is pursuing recovery from the liability insurer, nofault insurer or WC entity directly. 
• Beneficiaries and their attorneys will continue to work with the BCRC where CMS is pursuing recovery from the beneficiary.”

If you have any questions concerning this transition, feel free to call or email and we will be happy to answer them.

CMS Update: Section 111 NGHP User Guide

On July 13, 2015, CMS issued an updated Section 111 NGHP User Guide. In an effort to prevent false positives in partial SSN searches, CMS increased the number of additional criteria needed to return a match. When submitting a beneficiary using a partial SSN of five digits, all four of the remaining criteria- first initial, surname, date of birth, and gender- must now be matched exactly.

Additionally, the new User Guide replaces the term “TPA” with “recovery agent” and provides dedicated fields for RREs to submit recovery agent information on the TIN reference file. The Section 111 URL was also changed to https://www.cob.cms.hhs.gov/Section111/LoginWarning.action.

The current User Guide is available here.

CMS Announces Transition of NGHP Recovery to Commercial Repayment Center

Currently, Medicare's Benefits Coordination and Recovery Center (BCRC) handles the recovery of conditional payment claims in workers' compensation, liability, and no-fault cases, and the Commercial Repayment Center (CRC) handles the primary portion of the recovery of Medicare payments from group health plans.  CMS recently announced that beginning in October 2015, the CRC will start handling the recovery process in workers' compensation, liability, and no-fault cases when CMS is pursuing reimbursement directly from the primary payer.  The BCRC will no longer handle the recovery of claims from the primary payer but will continue handling the recovery process when CMS is pursuing reimbursement from the beneficiary.

CMS indicated that in the coming months they will schedule webinars and town hall telephone conferences to discuss the transition process.  We will let you know when we receive notice from CMS that any webinars and telephone conferences are scheduled.

CMS also announced that beginning January 1, 2016, "where an insurer or workers’ compensation entity has reported to CMS that it has ongoing responsibility for medicals (ORM) for specific care, CMS’ claims processing contractors will use the information provided by the insurer or workers’ compensation entity to determine whether Medicare is able to make payment for those claims."  CMS reiterated the importance of RREs reporting accurate ICD-9 and ICD-10 codes to ensure that Medicare issues payments appropriately.  Under the current language of the CMS NGHP Section 111 User Guide, RREs are required to start reporting ICD-10 codes for claims with a CMS date of injury on or after October 1, 2015.

For more information visit CMS here.

IMRs in California Accepted by CMS in Carr Allison MSA Allocations

Under California workers' compensation law, as of July 1, 2013, medical treatment disputes for all dates of injury are resolved through the Independent Medical Review (IMR) process. Specifically, Section 4610.6(g) of the California Labor Code provides that "[t]he determination of the independent medical review organization shall be deemed to be the determination of the administrative director and shall be binding on all parties."

As a general matter, CMS should recognize a binding decision on the merits under state law that certain treatment or prescriptions are not compensable.  However, last year we discussed the IMR process with CMS and were informed that the WCRC, the CMS contractor that reviews MSAs, had not been giving appropriate consideration to IMR Final Determinations in cases submitted by other vendors.  The contractor simply did not understand the binding nature and legal effect of IMR Final Determinations.

Carr Allison was at the forefront of discussions with CMS regarding IMR Final Determinations and WCMSA policy, explaining the IMR process and applicable section of the California Labor Code to the CMS Central Office.  We are pleased that those efforts paid off, as CMS has recognized IMR Final Determinations following our discussions.  In fact, in a very recent case, we negotiated a $66,438 MSA reduction with CMS based on the findings of an IMR Final Determination.  CMS agreed to exclude medications that were found by the IMR Final Determination to not be reasonable or necessary.

As a law firm, we are committed to aggressively advocating to CMS any legal basis for reducing MSAs.

If you have any questions about reductions based on IMR Final Determinations or applicable state laws, please do not hesitate to contact us.

CMS Alert: Matching Criteria for SSNs

On June 18, 2015, CMS issued an Alert entitled "Modification of Matching Criteria Used When Reporting Partial Social Security Numbers for Liability Insurance (Including Self-Insurance), No Fault Insurance, and Workers’ Compensation."  The text of that alert is copied below:

New Matching Criteria for Partial SSNs
In order to determine if individuals are Medicare beneficiaries, the following information is used:
•HICN or SSN
•First initial of the first name
•First 6 characters of the last name
•Date of birth (DOB)
•Gender

Effective immediately, the matching criteria for partial SSNs will be changed. When an exact match on the partial SSN is found, then four out of the four remaining data elements must be matched to the individual exactly. The matching criteria for HICNs and full SSNs will remain the same.

Reporting Compliance Considerations
NGHP RREs are encouraged to submit the HICN or full SSN when available to ensure the most accurate match is attained. Failure to match to a Medicare beneficiary with the full or partial SSN does not negate the RRE's Section 111 mandatory reporting requirement when a reportable claim exists.

The entire alert can be found here.

Section 111: Rule on Penalties Not Expected Until December 2016

Under the SMART Act, CMS is supposed to issues rules specifying "practices for which sanctions will and will not be imposed."  In December, 2013, CMS issued an Advanced Notice of Proposed Rulemaking seeking comments on circumstances in which penalties should and should not be imposed.  The comment period closed in February, 2014 and since then the industry has been awaiting proposed rules from CMS.  After CMS issues proposed rules, the public will be allowed to submit comments during a 60 day period, and then CMS will issue final rules.

Previously, CMS had indicated that they would issue proposed rules in July, 2015.  However, CMS has now indicated that they will not be issued until December, 2016.  Of course, it is possible that this time frame will change again and that CMS will issue proposed rules at a later date.  We will continue to keep you updated and let you know once any proposed and final rules are issued.  Until they are, RREs should focus on ensuring that they are reporting under Section 111 correctly and not be overly consumed with fear of retribution from CMS.
If you have questions or would like an audit of your Section 111 reporting program and processes, please let us know and we will be happy to help.

Summary: CMS Webinar on Applicable Plan Appeals

In case you missed the webinar on May 5, 2015, we have provided a summary of the webinar below:

CMS held a webinar to discuss the new administrative appeals process for applicable plans. The new regulations establishing a formal right of appeal and an administrative appeals process for applicable plans went into effect on April 28, 2015, and will allow applicable plans to go through an administrative appeals process if CMS issues a formal demand for conditional payment claims naming the applicable plan as the debtor. The appeals process is only available for demands issued against an applicable plan on or after April 28, 2015.

CMS explained that the appeals process is only available after Medicare has issued an "initial determination" (i.e., a formal demand) and includes the following steps: (1) redetermination by the contractor that issued the demand letter; (2) reconsideration by a Medicare Qualified Independent Contractor; (3) hearing with an Administrative Law Judge; and (4) review by the Medicare Appeals Council. After an applicable plan has exhausted these steps, the plan may then seek judicial review. It is important to keep in mind that by not appealing conditional payment claims through the administrative appeals process within the appropriate time frames, applicable plans will lose the right to seek judicial review or otherwise appeal the amount owed.

CMS noted that the demand letter and any subsequent appeal determinations will specify any time frame or other requirements to proceed to the next level of appeal. CMS also reiterated that the beneficiary is not a party to applicable plan appeals but the beneficiary will receive notice of any appeal that is filed.

The applicable plan may designate a representative to handle the administrative appeals process on its behalf by providing a valid Proof of Representation form. CMS confirmed that appeal requests submitted by a representative without a proper Proof of Representation form will be dismissed. A request to vacate the dismissal may be submitted with a proper Proof of Representation form.

CMS discussed that the applicable plan may appeal the amount and/or existence of the debt. However, applicable plans cannot appeal Medicare's decision to seek reimbursement from the applicable plan rather than the beneficiary.

CMS announced significant policy changes in how they will issue demand letters to applicable plans. In the past, CMS has reduced demands for procurement costs (i.e., attorney's fees and costs). In the webinar, however, CMS stated that they would not apply the procurement cost reduction for demands issued against applicable plans. We asked CMS to explain this position, as 42 C.F.R. § 411.37(b) indicates that demands issued against primary payers should be reduced for procurement costs. CMS said that they did not want to give any reduction for applicable plans for opposing their recovery. However, CMS also said that they would review all questions submitted. We are hopeful that CMS will review 42 C.F.R. § 411.37(b) and agree that demands issued against applicable plans should be reduced for procurement costs. Because CMS will typically list the insurer/self-insured employer automatically as the debtor in workers' compensation cases, a refusal by CMS to recognize the procurement cost reduction will lead to a significant increase in demand amounts in workers' compensation cases. However, we have seen CMS apply the procurement cost reduction in some demands issued after April 28, 2015, with the insurer listed as the debtor, and we are hopeful that this will continue.

CMS also indicated that in cases where CMS has agreed to a waiver or compromise of its recovery for the beneficiary, CMS may still pursue recovery from the applicable plan. In the past, if CMS agreed to a waiver or compromise request for the beneficiary, CMS would typically not pursue recovery against the primary payer. This change in policy would make it significantly more difficult to settle some cases in which Medicare has a substantial amount of conditional payment claims compared to the total settlement amount.

CMS also stated in the webinar that for claims involving ORM, CMS may periodically issue formal demands before there is a TPOC.

Typically, CMS has waited to seek recovery until there is a settlement, judgment, or award in the beneficiary's favor. Now, applicable plans that have reported ORM may start receiving demands prior to any settlement, judgment, or award.

Under 42 C.F.R. § 411.24(b), "CMS may initiate recovery as soon as it learns that payment has been made or could be made under workers' compensation, any liability or no-fault insurance, or an employer group health plan." It is important to note, however, that applicable plans should be able to appeal charges for which primary payment responsibility has not been demonstrated. If a claim has not resolved through settlement, judgment, or award, and an applicable plan would not otherwise be responsible under state law or the terms of the plan for the charges at issue, the plan could argue that CMS does not have a valid recovery claim since primary payment responsibilty has not been demonstrated.

Applicable plans will often have an MSA vendor handle the conditional payment claim research process when settlement is anticipated. However, if CMS starts issuing demand letters periodically when the applicable plan has reported ORM under Section 111, an MSA vendor may not be involved when the demand is issued and the applicable plan may not otherwise be actively looking for any conditional payment claim correspondence. Any demand that CMS issues against an applicable plan based on information that is reported under Section 111 should be sent to the address for the RRE that is reported on the TIN reference file. It is important for RREs to ensure that they have a process established for handling in a timely manner any demand letters that are sent to the address reported on the TIN reference file. Applicable plans have 120 days to file an appeal after receipt of an intial demand letter, and CMS assumes receipt of the demand letter within 5 days absent sufficient evidence to the contrary. Fortunately, beginning July 13, 2015, CMS will allow RREs to report recovery agent information on the TIN reference file, which should reduce concerns about any potential demands going unnoticed.

If you have any questions about the new appeals process, please feel free to contact one of our knowledgeable attorneys here. We will continue to keep you updated on any policy changes with CMS.

CMS Reschedules Applicable Plans Webinar

CMS announced today that they have rescheduled the webinar on Applicable Plan Appeal Rights for May 5, 2015 at 1:00 PM EST.

Participats should log in at https://webinar.cms.hhs.gov/r7ekbgn9ais.  CMS requests that Participants begin logging in 15 minutes before the start time due to the anticipated large number of participants.

For more information please see our previous post on the webinar here.

CMS Applicable Plan Appeals [Webinar]

As we previously reported, CMS recently issued a final rule pursuant to the SMART Act creating regulations establishing a formal right of appeal and an administrative appeals process for applicable plans.  The new regulations will go into effect on April 28, 2015, and will allow applicable plans to go through an administrative appeals process if CMS issues a formal demand for conditional payment claims naming the applicable plan as the debtor.  An "applicable plan" is defined as "liability insurance (including self-insurance), no-fault insurance, or a workers' compensation law or plan."

CMS has scheduled a webinar for April 28, 2015 at 1:00 pm Eastern time to discuss the appeals process. CMS requests that viewers begin logging in 15 minutes before the start time due to the anticipated large number of participants. You may sign up by clicking here.

Alert: CMS Issues Updated Section 111 NGHP User Guide

On February 2, 2015, CMS issued an updated Section 111 NGHP User Guide incorporating the following language from the August 19, 2014, Alert addressing liability cases involving exposure, ingestion, or implantation and December 5, 1980:

Any operative amended complaint (or comparable supplemental pleading) must occur prior to the date of settlement, judgment, award, or other payment and must not have the effect of improperly shifting the burden to Medicare by amending the prior complaint(s) to remove any claim for medical damages, care, items and/or services, etc.

Where a complaint is amended by Court Order and that Order limits Medicare’s recovery claim based on the criteria contained in this alert, CMS will defer to the Order. CMS will not defer to Orders that contradict governing MSP policy, law, or regulation.

The August 19, 2014, Alert also provides that Medicare will assert a recovery claim if "[e]xposure, ingestion, or the alleged effects of an implant on or after December 5, 1980, is claimed, released, or effectively released in the most recently amended operative complaint or comparable supplemental pleading" (emphasis added).  In addition, the Alert states that one of the conditions that must be met for Medicare to not assert a recovery claim is that "[e]xposure, ingestion, or an implant on or after December 5, 1980, has not been claimed in the most recently amended operative complaint (or comparable supplemental pleading) and/or specifically released" (emphasis added).

The new CMS User Guide does not include the underlined language above.  However, we have contacted CMS and confirmed that this language was left out inadvertently and the August 19, 2014, alert is still in effect.  We expect to see a new User Guide issued in the near future including the underlined language above and we will let you know when it has been issued.

The current User Guide is available here.

US District Court: Adequacy of a Medicare Set-Aside in Liability Case

In Berry v. Toyota Motor, No. 1:11-CV-01611, 2015 U.S. Dist. LEXIS 3319, (W.D. La. January 10, 2015), a products-liability case, the United States District Court for the Western District of Louisiana was presented with a Joint Motion requesting a determination of whether Medicare's interests were adequately protected in the parties' settlement agreement and, specifically, whether a Medicare Set-aside (MSA) would be necessary. The plaintiff, Mr. Berry, was injured in a motor vehicle accident while driving his Toyota Corolla. The parties reached a confidential settlement agreement which was contingent upon the court finding that no MSA was required and that Medicare's interests were adequately protected.

In reaching its decision, the court considered affidavits from treating physicians confirming that treatment for the injuries related to the accident, had been completed and no future treatment was anticipated. The court also reviewed correspondence from Medicare confirming that all conditional payment claims paid by Medicare had been reimbursed. Based upon the evidence presented, the court held that an MSA was not necessary and Medicare's interests were adequately protected in the settlement.

Issues related to the Medicare Secondary Payer Act are typically handled through administrative remedies. However, the court validated its authority to rule on these issues by pointing out that the United States was not a party to the suit and it was not a dispute or appeal of any decision made by the Centers for Medicare and Medicaid Services (CMS). Additionally, the court noted that unlike workers' compensation cases, liability cases do not have clear-cut guidelines for parties to follow and review may not be available. Thus, without other means to establish that Medicare's interests are adequately protected in settlement, parties must look to the courts to hear motions like the one in this case.

CMS Issues Updated Section 111 NGHP User Guide

On January 5, 2015, CMS issued an updated Section 111 NGHP User Guide (version 4.4).  The new User Guide incorporates the previous Alerts on reporting partial SSNs.  As we discussed in previous posts, beginning January 5, 2015, where a NGHP RRE cannot obtain an individual’s HICN or full SSN, the RRE may report the following data elements that will enable CMS to properly identify a Medicare beneficiary:

•Last five digits of SSN

•First Initial

•Surname

•Date of Birth

•Gender

The new User Guide was also updated to show that for liability claims not involving ORM, RREs will receive the CJ07 error code for reporting liability TPOCs with TPOC dates on or after October 1, 2014, with a cumulative TPOC amount less than or equal to the current $1,000.00 threshold.  Previously, RREs could optionally report below-threshold liability TPOCs with TPOC dates on or after October 1, 2014, if the cumulative TPOC amount was more than $300.00.  CMS also included new tables in the section in the User Guide on the liability TPOC threshold (section 6.4.3).  The new Table 6-5 shows liability TPOC reporting requirement for TPOC dates since October 1, 2011, along with information on optional reporting for below-threshold liability TPOCs with TPOC dates prior to October 1, 2014.  The new Table 6-6 shows when RREs will receive the CJ07 error code for reporting below-threshold liability TPOCs.

December 10, 2014 alert can be found here.
* Updated to include the link to the current NGHP User Guide, found here.

CMS Releases Updated WCMSA User Guide and Self-Administration Toolkit

WCMSA User Guide

Version 2.3 of the Workers’ Compensation Medicare Set-Aside (WCMSA) User Guide was released January 5, 2015. Importantly, language was added regarding hydrocodone compounds schedule change and the deadline for responding to development requests has been extended for cases submitted through the WCMSA Portal.

In Section 9.4.6.2, Pharmacy Guidelines and Conditions, language was added addressing the hydrocodone compound schedule change. The reclassification occurred in October 2014, changing these products from a C-III controlled substance to a C-II controlled substance. This is significant because C-IIs require a new prescription every thirty (30) days or less while C-IIIs only require new prescriptions after five refills or six months, whichever occurs first. Under the C-II regulations, a physician may issue up to three prescriptions in one visit which would allow the patient to receive a ninety (90)-day supply in one office visit. For WCMSAs submitted on or after January 1, 2015, a minimum of 4 healthcare provider visits per year must be allocated when schedule II controlled substances are used, unless the medical records document more frequent provider visits.

Additionally, the amount of time allowed for responding to development requests for cases submitted through the WCMSA portal was extended from ten (10) days to twenty (20) days. Once the time allowed has passed, CMS closes the file and treats the subsequent submission as a new case. See Sections 9.4.1 and 9.5.

Additional changes were made to clarify language found in previous versions. To view the updated WCMSA User Guide in its entirety and a list of all changes, click here.

Self Administration Toolkit

CMS also released a toolkit for the self-administration of Medicare Set-asides as a resource for claimants. The toolkit lays out the process and guidelines of self-administration, from the time the WCMSA account is first established through its exhaustion. It explains who claimants will work with to manage their account, discusses lump sum verses structured settlement accounts and even covers special circumstances, such as when a beneficiary's status changes. The full toolkit can be downloaded here.

Court Upholds Dismissal of Employee’s Action Seeking to Force Employer to Fund CMS-Approved Medicare Set-aside

In Hunter v. Rapides Parish School Bd., 2014 La. App. LEXIS 2657 (3rd La. Nov. 5, 2014), the Louisiana Third Circuit Court of Appeal affirmed the judgment of the Workers’ Compensation Judge (WCJ) dismissing an action in which the employee, Ms. Hunter, sought to force her employer, the Rapides Parish School Board (RPSB),  to fund a CMS-approved Medicare Set-aside (MSA).   Prior to the CMS determination, the parties reached a settlement agreement and it was approved by the WCJ.  The terms of the agreement required RPSB to pay Ms. Hunter $19,000.00 and to establish a Medicare Set-aside (MSA) in the amount of $79,937.77.

RPSB submitted the MSA proposal to CMS and received a rejection.  CMS required the MSA be valued at $94,265.00 instead. Following the CMS rejection, RPSB chose to pay medical expenses as they arose rather than fund the MSA and sent a certified letter to Ms. Hunter notifying her of the same.  Ms. Hunter subsequently sought to force RPSB to fund the CMS-approved MSA of $94,265.00.  However, she admittedly knew RPSB was submitting the MSA proposal to CMS and acknowledged that nothing in the settlement agreement required RPSB to fund an MSA in an amount higher than the amount she and RPSB had agreed upon.  For these reasons, the WCJ dismissed the action seeking funding of the CMS-approved MSA and the Third Circuit Court of Appeal of Louisiana affirmed the same.

Court Addresses Adequacy of MSA when Awarding Future Medicals in Liability Suit

In Tucker v. Cascade Gen., Inc., 2014 U.S. Dist. LEXIS 160265 (D. Or. Nov. 13, 2014), the Plaintiff, an employee of Cascade General, was injured while cleaning a ship owned by the United States. The Plaintiff filed a workers’ compensation claim against his employer, as well as a third party negligence action against the United States under the Longshore & Harborworkers’ Compensation Act. Tucker settled his claim against his employer, however, his claim against the United States went to trial.  At trial, Tucker requested an award of $614,341.00 for future medical expenses.  Tucker presented a life care plan and testimony from his treating physicians, among other evidence, in support of his request for the future medical award. Notably, CMS had approved a Medicare Set-aside in the amount of $334,840.00 for Tucker’s work injury. However, Tucker presented evidence  that much of his future treatment would not be covered by Medicare and thus, is not reflected in the CMS-approved Medicare Set-aside amount the same way as it is in the life care plan. In addition, Tucker argued that the MSA was calculated using the discounted rates which a longshore insurance carrier would pay and that there is no guarantee he would receive those rates.  The Court agreed with Tucker finding that “[t]he fees and charges set forth by the MSA do not provide a fair and comprehensive projection of the costs Tucker will incur for medical services over the course of his life” and awarded future medical costs of $614,341.00, the amount proposed in the life care plan.  
                                             
Interestingly, the government asked the Court to use the future treatment cost projected by the MSA (which CMS approved), but for the cost of medications, however, the government requested that the life care plan be used.  The Court notes that the United States was “selective in its use of [the MSA] as a ‘supportable methodology’ and providing ‘concrete evidence’ of costs.” 


This decision addresses a concern shared by many injured workers who are paying for their medical expenses with funds from a Medicare Set-aside.  According to Medicare’s guidelines, injured workers should be certain that no amount in excess of the applicable workers’ compensation fee schedule is paid from the MSA for medical treatment; however, there is no guarantee that the injured worker will receive the same discounted rate for services. Instead, injured workers must negotiate for the best rates at the time of service. 

State Court Vacates Settlement After Surgery is Performed Prior to Workers’ Comp Board Approval

In McCarroll v. Livingston Parrish Council, 2014 La. App. LEXIS 2570, the First Circuit Court of Appeal of Louisiana affirmed the judgment of the Office of Workers’ Compensation (OWC), which vacated the approval of a settlement between the Livingston Parrish Council and Louisiana Workers’ Compensation Corporation (LWCC), an employer and its insurer, and Mr. McCarroll, their employee.

Mr. McCarroll was injured in December 2003 and began receiving workers’ compensation benefits soon thereafter. In July 2008, one of Mr. McCarroll’s doctors recommended cervical fusion, which Mr. McCarroll declined at the time. In early January 2009, the parties agreed to the terms of a settlement, including a $98,684 Medicare Set Aside (MSA), which included $21,793.00 for the recommended, yet declined, cervical surgery. The MSA was submitted to CMS for review and approved on February 2, 2009. Mr. McCarroll underwent the cervical fusion surgery on February 16, 2009.  A little over two weeks later, on March 2, 2009, Mr. McCarroll executed the Settlement Agreement and Release, and LWCC received the settlement documents signed by Mr. McCarroll and approved by the OWC on March 9, 2009. The attorney for the Council and LWCC signed the agreement on March 10, 2009. In accordance with the Order of Approval, LWCC funded the $110,000 indemnity settlement and $32,045 MSA seed.

When Mr. McCarroll’s surgery was performed prior to OWC approval of his MSA, the seed money could not be used to cover the costs of the surgery, so on March 10, 2011, almost exactly two years later, Mr. McCarroll filed a petition.  He asserted that Medicare refused to pay for any medical expenses that were incurred prior to the March 9, 2009 approval of the workers’ compensation settlement and that LWCC refused to pay for any medical treatment from late January 2009 up to the March 9, 2009 approval of the settlement, a time period including Mr. McCarroll’s surgery.

At trial, the LWCC claims specialist testified that she did not know that the seed money could not be used to pay the bill for the surgery if Mr. McCarroll had his surgery prior to the settlement being approved by the OWC. Mr. McCarroll then testified that he thought, upon signing the settlement agreement, his medical expenses would all be paid, and that he would not have signed had he known otherwise. The OWC stated in its written reasons that “[n]o one involved in this case at that time envisioned that Medicare would deny coverage because the surgery was done before the settlement was signed by the OWC.”  Consequently, the OWC vacated the settlement, as what was signed by the parties and subsequently approved was no longer the anticipated agreement.

Based on the standard of review that the court must apply to Workers’ Compensation cases, the OWC’s findings of fact must be made with “manifest error-clearly wrong.” The First Circuit Court of Appeal could not find where the OWC manifestly erred in vacating the Order of Approval, as the misunderstanding led to a misrepresentation that, although unintentional, was sufficient to set aside the agreement.