Seven Problems Facing Work Comp in a Credit Default

Tuesday, August 2, 2011 | 0

By Jon Gelman

Workers' Compensation payments are so intertwined with the national system of workers' compensation that a potential U.S. credit fault will impact the system significantly. Workers' Compensation is social remedial legislation and as the U.S. government leaders struggle to find a political solution to the nation's financial crisis concern becomes focussed on how a shutdown will impact the national workers' compensation system.


The consequences of a U.S. credit default will be significant. President Obama stated, "If that happens, and we default, we would not have enough money to pay all of our bills – bills that include monthly Social Security checks, veterans’ benefits, and the government contracts we’ve signed with thousands of businesses. "

1. Centers for Medicare and Medicaid Services (CMS) and their contractor will be unable to provide conditional payment information under the Medicare Secondary Payer Act. Negotiations in workers' compensation matters will come to halt.

2. CMS will be unable to approve compromises and releases in advance of workers' compensation disposition thereby halting the state systems.

3. CMS and their agents will be unable to review Medicare set-aside agreements thereby stopping workers' compensation dispositions by compromise.

4. Chaos will erupt in those states where Social Security takes a reverse offset on permanency payments. Workers' compensation insurance companies and employers will become responsible for the entire amount to be paid.

5. The Veterans' Administration will be unable to provide information concerning medical treatment. Records will he held-up and will delay evaluations in adjudications in workers' compensation cases.

6. Tricare and other federal insurance providers will be unable to provide benefit information. The lack of reimbursement data will stymie evaluation of medical reimbursement issues slowing the disposition and settlements of workers' compensation claims.

7. The U.S. military will be unable to provide personnel records and prior medical treatment and claim information.

The potential fiscal impact of a U.S. debt crisis is enormous. Hopefully, the politicians in Washington will reach a compromise and the this crisis will be resolved and everyone can creatively focus on making the compensation system less complicated and more efficient.

<i>Jon Gelman is a claimants' attorney in  Wayne, N.J. and author of New Jersey Workers’ Compensation Law and co-author of the national treatise, Modern Workers’ Compensation Law. This column was reprinted with his permission from his blog, http://workers-compensation.blogspot.com/</i>