Workers’ Compensation Issues in President Obama’s FY 2017 Budget

The following new and significant items related to workers compensation were included in the President’s Budget proposal for FY 2017

Social Security Administration

The budget re-proposes the development of a process to collect workers’ compensation (WC) information in a timely manner from states and private insurers in order to correctly offset SSDI benefits and reduce SSI payments.

The budget also re-proposes restructuring of the Federal Wage Reporting process by moving from annual to quarterly wage reporting. This is designed to enhance tax administration and improve SSI program integrity.

Comment: UWC has recognized the need for proper determinations of SSDI benefits and the potential to reduce SSI payments, however, any exchange of information must consider confidentiality and privacy concerns with respect to access to workers’ compensation information from private insurers and state data bases. Federal legislation may conflict with state law and/or private confidentiality. Also, moving from annual to quarterly Federal wage reporting would impose a new administrative burden for employers that must be considered.

Office of Workers Compensation Programs

 The office is addressing GAO and Inspector  General  recommendations to improve integrity by cross-matching the Office of Worker’ Compensation Program records with Social Security records. The matching has the potential to reduce improper payments in the FECA, Black Lung, and EEOICPA programs by improving reporting of outside income for purposes of calculating benefit levels.

Comment: UWC generally supports the exchange of information in order to avoid fraud and overpayments in workers’ compensation programs.

Medicare Secondary Payer (MSP)

In FY 2015, CMS activities have been focused on operationalizing the legislative requirements per the Strengthening Medicare and Repaying Taxpayers (SMART) Act. These efforts have included the expansion of functionality for timely reporting of settlements, judgments, awards or other payments within the Medicare Secondary Payer Recovery Portal (MSPRP). CMS notes in the budget document that during fiscal years 2016 and 2017, continued enhancements will be implemented to take advantage of combined MSP operations, along with implementation of additional recovery activities.

Comment: CMS has recognized the value of providing an option for direct payment to meet MSP obligations. We are working with our WC MSA reform coalition to include language that permits direct payment along with other reforms in HR 2649 and S 1514.