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MONTANA SELF INSURERS' ASSOCIATION

MSIA Legislative Update 1/27/2023 – Week 4

  • Legislative Bills Update
  • HB 178 Passes House
  • LC 986 Draft for MSF Released
  • LC 3179 To See Revisions
  • LC 4327 Draft Released
  • MSP Gets More Complicated With Potential Penalties for Incorrect Reporting
  • MSIA Webinar Practicalities-and-Pitfalls-of-the-MSA-Process - 2/16/2023 

Sponsored by Ritsema Law and MES Solutions

  • Legislative Bills Update 


Bills that have been formally introduced have either a House Bill (HB) or Senate Bill (SB) number. Bills that have been requested and/or drafted but not yet introduced are assigned a Legislative Counsel (LC) number. Not all LC bills are introduced. 

With this report, the bills or draft language where there has been a change are reported first then those where there is no status change are reported. 


HB 178               K. Walsh           R-Twin Bridges              This bill clarifies that injuries which occur off the clock and as the result of social or recreational activity are not compensable. The bill defines that a social or recreational activity is one that includes exercise, pleasure, relaxation or voluntary of optional preparation related to the employment. For example, should a ski area employee injure themselves while skiing off the clock during a work day, they would not be covered by WC in that specific instance. MSIA testified in support of this bill at the House Business & Labor Committee on 1/13/23. The only opponents were the Montana Trial Lawyers Association. The bill passed the House Business & Labor Committee 18-1 and passed the full House 79 – 20 on 1/23. It has been assigned to the Senate Business, Labor and Economic Affairs Committee. 


HB 277                Nicol                   R-Billings                       As drafted this bill would end the MSF payments to the State Auditor’s Office (SAO) to staff two FTE. In the 2015 session, as part of the agreement that the state fund would be regulated by the Commissioner of Securities and Insurance (SAO), that office estimated the need for two additional FTE to regulate MSF. As part of the agreement to pass SB 123 at that time, MSF was required to pay for those FTE, which has been done by intra-agency transfer since then. This bill, as currently drafted, would stop MSF from paying for those FTE. This bill was the subject to a hearing on Friday, 1/27 and was opposed by the State Auditor’s Office who pointed out that the staffing continues to be needed and the funding will be provided through a reduction in general revenue funds or continue to be paid by this inter-agency transfer. MSIA is not taking a position on this language. 


LC 986               Hertz                  R-Polson                         This bill has not yet been introduced and seems to be the compromise language for those who cannot support the LC 985 proposals. This language would provide MSF the same exemptions from the IT law that the Department of Justice, Secretary of State, the University System and the Office of Public Instruction have. The language also provides the state fund the same state procurement process exemption for purchases under $250,000 that the state lottery system currently has. MSIA does not have a position on this language at this time.  (See also LC 985 below).


LC3179               Harvey               D-Butte                         This bill draft was the subject of an MSIA email on January 18 to membership. This bill has not yet been introduced. In speaking with Representative Harvey, the draft requestor, he appreciates that this language does not meet his goals, as it will provide someone who gets hurt more money than if they were working. However, he promises it will be introduced and his goal is to provide those who are hurt at work, the same level of money as if they were working. In response to our comment about incentives to return to work, the Representative felt employers could do more to incentivize people to get back to work and there are employments which provide this now (Representative Harvey is a Butte firefighter and their contract provide full pay when people are injured at work between the workers’ compensation system and an employer payment). The current language proposes to increase indemnity benefits from 66.66% of weekly wage to 100% (subject to state average weekly wage maximum). MSIA has contacted NCCI, Department of Insurance, the Department of Labor to help determine the potential impact of the original draft language. MSIA has also communicated with business interests about this language. MSIA does not believe this bill in either the original nor the expressed language will get beyond a hearing in committee, should it be introduced. MSIA will oppose this kind of change to the law and will work with others to defeat it. 


LC 4327              D Salomon        R-Ronan                           This bill has not yet been introduced. This draft language would change the Unfair Trade Practices Act (UTPA) so that the independent cause of action section of the unfair claims practices clause, does not apply to captive insurance company (but does apply to captive risk retention groups). Currently the language of 33-18-242 (8) specifically includes self insurance as being covered under the law. However, self insurance is not defined in the insurance code. A Supreme Court decision, Dannels v BNSF (Dannels v. BNSF :: 2021 :: Montana Supreme Court Decisions :: Montana Case Law :: Montana Law :: US Law :: Justia) specifically addressed the application of the unfair claims practices application and the private right of action to both captives and self-insurers (see Justice Sandifur’s consent . This is a complicated issue and whether self-insurers without definition are part of the current law or not. One of the questions as well, is whether eliminating the reference, since there is no definition, makes a difference or not. As currently drafted, the bill eliminates the reference and proposes only that the act does not apply to captive insurers. MSIA is working on this bill with business interests and the State Auditor’s Office.          


The following bills have not seen action this week. 


SB 22                  Morigeau          D-Missoula                    This bill is the clean-up of the attempt last session to require the Department of Labor to do more investigation regarding an independent contractor or employee designation rather than rely solely on the presence, or absence of an ICEC. This was negotiated through the Economic Affairs Interim Committee and the language at that time, was acceptable. The Senate Business, Labor & Economic Affairs Committee heard the bill on 1/19/2023 where it became evident more work on bill language is necessary. MSIA is working with business and insurers to address concerns around potential unintended consequences of the current language destabilizing the current conclusiveness of the presence of an Independent Contractors Exemption Certificate (ICEC). Current Montana law is reasonably settled in this area and impacting that law could send the issues back to court. The bill may be scheduled for Committee action next week, but it will likely not see action until amendatory language is agreed upon. MSIA will continue to work with businesses to amend the current language.


SB 126               Hertz                  R-Polson                        This bill re-pays the Montana State Fund those monies taken during the 2017 Special Session to replenish the Fire Fighters funds, and adds interest since that time. This bill was heard in Senate Finance and Claims Committee on Thursday 1/12 with the D’s not buying the need to restore the funds and the more conservative R’s not accepting the financial need for this either. There appears to be no clear leadership position on the legislation as yet. MSIA is watching this bill progress and does not have a position at this time. 


LC 84                  R. Lynch             D-Butte                          This bill has not yet been introduced. This language would add ovarian and testicular cancers to the list of presumptive illnesses covered for firefighters. MSIA opposes this bill. 


LC 677                Nicol                   R-Billings                        Revise workers’ compensation laws to provide freedom of competition. There is no language to this bill title as yet. There is speculaton that this could be a proposal to permit the state of Montana to bid out their workers’ compensation coverage (which is currently required to be provided by MSF) and to create an assigned risk plan, managed by NCCI. MSIA will be monitoring this bill until language is generated.


LC 679                Nicol                   R-Billings                        Revise workers' compensation laws related to illegal aliens. There is no language to this bill title as yet.

LC 985                Hertz                  R-Polson                          There is no language associated with this bill yet. However, MSF is drafting language which would allow it to become a policyholder owned not-for-profit mutual insurance company which retained the responsibility for the market of last resort. The MSF Board of Directors met in a Special Meeting on today, January 20, to provide public policy direction to the staff on this proposal. For the first time, they publically agreed to move forward with this kind of a proposal, in addition to seeking the state’s re-payment of the funds used to balance the firefighting budget in 2017 (see SB 126 below) and require the state to provide the funding for the actuarial estimates of costs for the Old Fund liabilities, currently estimated at between $35 - $50 million. One of the sticking points is how to deal with current MSF employees – the discussion is to permit them to have a choice of staying in the state of Montana systems and benefits or to begin work within the new company. Those employees who choose to stay would then be leased or somehow assigned to the new company and would retain state benefits. These kind of proposals have been successful in other states. MSIA will be monitoring this bill until language is generated. 


LC 1724              A. Olsen            D-Missoula                   Provide worker right to choose physician in workers' compensation case. There is no language associated with this bill yet. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. MSIA will oppose changing the current law regarding choice of physician. 


LC 1728              A. Olsen             D-Missoula                   Establishes presumption in workers' compensation for COVID-19. There is no language associated with this bill as yet. Representative Olsen has either sponsored or supported this kind of proposal in the past and it is a Democratic leadership supported proposal. MSIA will oppose changing the current law regarding presumptions for injuries or illnesses.


  • MSP Gets More Complicated with Potential Penalties for Incorrect Reporting 


On January 9th, 2023, CMS released an update to their Non-Group Health Plan (NGHP) Section 111 Reference Guide, which included the following language:


As of July, 2023, the following change will be made: To inform Responsible Reporting Entities (RREs) when another source has updated their submitted records, RREs may now opt in via the Section 111 Coordination of Benefits Secure Website (COBSW) application to receive a monthly NGHP Unsolicited Response File. This will provide key information about updates to Ongoing Responsibility for Medicals (ORM) records originally submitted in the last 12 months and allow RREs to either update their own internal data or contact the BCRC for a correction (Chapter 7).   


What problem does this solve?  

Consider the following scenario: A Medicare beneficiary workers’ compensation claimant has an ongoing/open workers’ compensation claim for a right wrist occupational disease. Let’s say the claimant is bitten by a cat on the right wrist and seeks treatment at a local urgent care. 

  • CMS receives the urgent care bill and denies it in error attributing the treatment as related to the OD claim. The claimant receives the bill denial and places a phone call to CMS to discuss. The claimant relays in error that their right wrist OD claim is closed, prompting CMS to update their records as “Ongoing Responsibility for Medicals” terminated on the right wrist OD claim.  
  • As it stands now, the RRE (you) would not be made aware of this update to the OD claim record. Therefore, you are likely to continue to submit a conflicting Section 111 report for the OD claim indicating “Ongoing Responsibility for Medicals” remained open.  
  • Beginning in July 2023, RRE’s (you) will now have a way to monitor for these types of changes made by other sources and either update your Section 111 reporting or contact CMS for further information accordingly.


The timing of this update is interesting because CMS has been working on final rules to levy Civil Monetary Penalties for Section 111 reporting errors. According to the Office of Management & Budget, final rules are due February 18, 2023, right around the corner. Moreover, the penalties for incorrect reporting can be up to $1000 per day, per claim. Sanderson Law Firm just published an article regarding the topic found here: The Coming Storm: CMS Moves Forward with Hefty Civil Monetary Penalties for Noncompliance — Sanderson Firm (sandersoncomp.com)

Of course, this leads to another reason you should attend: 


  • MSIA Webinar Practicalities-and-Pitfalls-of-the-MSA-Process - 2/16/2023 


Registration is open for our next in the MSIA CE Webinar Series, Practicalities-and-Pitfalls-of-the-MSA-Process, presented by Paul Sighinolfi, Senior Managing Director at Ametros, on February 16, starting at 10a MST. This Webinar has been approved for one CE credit through the MT Department of Labor. Advance registration is required, contact the MSIA office to register or go online at Practicalities-and-Pitfalls-of-the-MSA-Process.

This Webinar is sponsored by   Ritsema Law - contact Danielle Vukonich danielle.vukonich@ritsemalaw.com or at 406-471-4757

And 

MES Solutions - contact Tyler Catalano tyler.catalano@mesgroup.com or at 206-291-6656

CMS rules changes and new law effective 12/2021 have changed the game with MSA’s as part of a workers’ compensation or liability settlement agreement. 

We will go through: 

  • The elements of an MSA and how they are structured;
  • What does it mean to have an MSA approved by the Center for Medicare Services (CMS) - Do obligations end there?; 
  • Annual reporting requirements and how they work;
  • How a submitted plan can deviate from what is approved;
  • Drugs in an MSA;
  • How CMS has been regulating MSAs; 
  • What happens with an MSA if a settling party has a Medicare Advantage Plan; and
  • How the Medicare Secondary Payor Act applies when settling a liability claim


Practicalities-and-Pitfalls-of-the-MSA-Process,

Paul Sighinolfi, Senior Managing Director of Ametros

February 16 at 10a MST


Contact the MSIA office to reserve your seats or register online at Practicalities-and-Pitfalls-of-the-MSA-Process. Advance registration is required.


             See you next week!