Question: What suggestion do you have when you have an injured worker who will likely qualify for SSDI within 30 months of a Workers’ compensation settlement, has a WC settlement of 110k being negotiated, has a physician who says that knee replacement will be needed, and a claimant who refuses to have knee replacement. We want to reduce set aside amount.
Answer: The fact that the injured worker will qualify for SSDI within 30 months of the WC settlement does not necessarily mean that a MSA is appropriate. In fact, the 30 month period of time to which you refer is really linked to an injured individual’s “reasonable expectation” of Medicare entitlement, not SSDI entitlement. According to the CMS Policy Memos, a person possesses that “reasonable expectation” if one of the following 5 characteristics are true: 1) he/she has an open, active application for SSDI pending; 2) he/she has applied for SSDI, that application was denied and they anticipate appealing that denial; 3) he/she has applied for SSDI, that application was denied, and they are actively appealing the denial; 4) he/she is at least 62.5 years old; or 5) they possess an End Stage Renal Disease condition but are not yet a current Medicare beneficiary. If the injured individual does not meet the above mentioned criteria and is not a current Medicare beneficiary, then a MSA is not appropriate. In addition, when considering Medicare’s future interests, starting with the question what part of the settlement has been allocated to future costs of care will lead you to the right answer. Starting with what should the MSA amount be, is like the tail wagging the dog – you need to identify the allocation issues first (see 42 C.F.R. §411.46(d)(2)).
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