Question: I am working to settle a workers’ compensation claim for a client who is 30-years-old and currently has private health insurance coverage. Because my client has permanent issues from his injury, I have advised him that we will need to evaluate whether Medicare has a future interest in his claim, even though he is not currently a Medicare beneficiary and is not likely to be enrolled in Medicare within 30 months of the resolution of his claim. I know that Medicare officials use certain criteria to review workers’ compensation cases, to determine whether and how funds need to be set aside to fund Medicare’s future treatment of that injury. Although my client has no reasonable expectation of becoming eligible for Medicare anytime soon, one of the review criteria applies in our case – in that we are looking to settle this matter for more than $250,000. Will I have a problem settling the case for that amount if we do not set aside funds for Medicare’s future treatment?
Answer: The Centers for Medicare & Medicaid Services (CMS) released a Workers’ Compensation Medicare Set Aside Reference Guide on March 29, 2013 which helps answer your question. Section 8.0 (“Should CMS Review a WCMSA?”) addresses why a claimant may wish for CMS to review and approve a WCMSA. Section 8.1 (Thresholds) then discusses when CMS is willing to review and approve a WCMSA proposal.
It says: “CMS will review a proposed WCMSA amount when the following workload review thresholds are met:
- The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00; or
- The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00.”
CMS then takes the opportunity later in that section to clarify these thresholds: “These thresholds are created based on CMS’ workload, and are not intended to indicate that claimants may settle below the threshold with impunity. Claimants must still consider Medicare’s interests in all WC cases and ensure that Medicare pays secondary to WC in such cases.”
The issue of how these dollar figures relate to one’s workers’ compensation settlement have long been misunderstood by many. While these help manage CMS caseload from a WCMSA review perspective, they have no bearing from a strategic point of view as to how much a claimant should accept for resolution of his or her workers’ compensation claim. Therefore, while you will still need to consider and protect Medicare’s future interest, you can do so by determining that your client lacks the proper Medicare enrollment status to warrant establishing a WCMSA here, regardless of the gross settlement value. We would be happy to provide you with additional guidance in the form of an MSA Evaluation Letter, if you wish to retain records of the work you did to evaluate Medicare’s potential future interest in this claim.
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