Injured Worker Attempts to have Medical Marijuana Included in Medicare Set-Aside
In an interesting case out of the Commonwealth Court of Pennsylvania, entitled Lehigh Specialty Melting v. Workers’ Comp. Appeal Bd. Bosco, 2021 Pa. Commw. Unpub. LEXIS 355 (July 13, 2021), Lehigh Specialty Melting, Inc. (Employer) appealed an order of the workers’ compensation appeal board which would have caused the unwinding of the otherwise finalized workers’ compensation settlement agreement which included a CMS approved MSA with an injured worker (Claimant).
Essentially, Claimant had executed a settlement agreement/compromise and release (C&R) wherein Claimant agreed not only to a lump sum settlement but also "to the potential establishment and funding of an MSA.” As part of the C&R, Claimant also agreed to timely complete all paperwork necessary for Employer and its Insurer/ThirdParty Administrator to apply for and secure an MSA allocation. Post C&R, Employer had obtained an MSA which was approved by CMS. However, post CMS approval, the Claimant then refused to follow through with executing the paperwork necessary to finalize the MSA.
Claimant took the position that the Employer would remain responsible for future work-related medical expenses without any reference to the establishment of an MSA. Claimant also further alleged that the proposed MSA failed to consider all work-related medical treatment currently being provided to him. Claimant further noted that he was prejudiced by the fact that the Employer waited almost four years to have an MSA proposal performed and further alleged that Employer sought the [MSA] without any input from Claimant.
More specifically, post C&R, the Claimant alleged that circumstances had changed as medical use of marijuana was now approved in Pennsylvania and he wanted funding for his usage of medical marijuana in his MSA allocation. Thus, Claimant contended that medical marijuana was a reasonable and necessary treatment for his work injury. Employer disagreed and asserted that the C&R did not contain any provision for Claimant to amend or refuse the MSA proposal and that the C&R was a means for Employer to end its medical liability. The question for the Court then became whether there was a “meeting of the minds” and whether the provision of the C&R requiring Claimant to execute documents for the approval of the MSA and final settlement of his claim for medical benefits was enforceable.
The workers’ compensation Board originally found in 2020 that circumstances had changed due to the medical use of marijuana now being approved in Pennsylvania. Further, as Claimant contended that medical marijuana was a reasonable treatment for his work injury, and the Employer disagreed, that there was no meeting of the minds and the provision of the C&R requiring Claimant to execute documents for the approval of the MSA and final settlement of his claim for medical benefits was not enforceable. Employer appealed.
Upon Employer’s appeal to the Commonwealth Court, the Board’s decision was reversed. Further, the Court found, that Employer was correct that the Board's standard would open a Pandora's box that could potentially unravel countless C&Rs based on the contention that there was no "meeting of the minds" at the time the agreements were approved. Further, medical marijuana was neither contemplated nor legal in Pennsylvania when the C&R was approved, (2) Claimant never appealed approval of the C&R, (3) Claimant accepted $155,000 to resolve the indemnity portion of his claim, (4) Claimant agreed to cooperate in Employer's efforts to secure an MSA, (5) it was up to Employer's sole discretion whether to fund the MSA, and (6) Lastly, Medicare/CMS will not fund medical marijuana, despite changes in Pennsylvania State law. Thus, a new C&R was not required for Employer to exercise its option to resolve the medical portion of Claimant's workers' compensation claim.
Key Take-Aways:
1. Obtaining approval of an MSA by CMS post-settlement/C&R can open a can of worms as occurred here in this case. Injured parties’ medical circumstances often change post-settlement and not finalizing the MSA until after settlement/C&R opens a window for the Claimant to challenge the MSA as no longer being accurate. A case that should have been settled almost 5 years earlier continued to haunt the Employer in court unnecessarily for years to come. The take-away is that parties looking to settle a workers’ compensation claim with a Medicare beneficiary should either agree upon/obtain CMS approval of an MSA or incorporate a Non-Submit MSA pre-settlement, so that there is a clear meeting of the minds at the time of settlement.
2. While medical marijuana is highly unlikely to be a component of MSAs for many years to come as marijuana remains a Federally illegal drug/not covered by Medicare, Employers should prepare for potentially increased MSA allocations as Congress looks to expand the Medicare program. Currently, the Democrats are pushing for Medicare expansion which would expand Medicare coverage for dental, vision, and hearing benefits. There is also a possibility that if such expansion would pass, that the Medicare age would be lowered from 65 to 60. A recent article by The Hill covers this issue in greater detail: https://thehill.com/policy/healthcare/561432-progressives-ramp-up-medicare-expansion-push-in-congress
3. Medicare Set-Asides (MSAs) should not complicate otherwise good and final settlements. Consult with an MSP Expert for effective solutions in ensuring your settlements with Medicare beneficiaries are truly final.
Contact me at heather@sandersoncomp.com to learn more about Sanderson Firm’s traditional MSA and Non-Submitted Indemnified MSA product offerings.
