All parties in a Workers’ Compensation (WC) case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving WC cases that include future medical expenses.

The recommended method to protect Medicare’s interests is a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA), which allocates a portion of the WC settlement for future medical expenses.

Submission of a WCMSA proposal to CMS for review and approval is a recommended process. There are no statutory or regulatory provisions requiring that a WCMSA proposal be submitted to CMS for review. However, if an entity chooses to use the WCMSA review process, CMS requests that it comply with the established policies and procedures:

1. The claimant is currently eligible for Medicare and the total settlement value is greater than $25,000*
2. The claimant has a reasonable expectation of Medicare enrollment in 30 months or less and the total settlement is greater than $250,000*

The CMS no longer reviews new WCMSA proposals if the above thresholds are not met. However, CMS wishes to stress that these threshold requirements reflect a CMS operational workload standard. These requirements do not constitute a substantive dollar or “safe harbor” threshold. It remains true that Medicare beneficiaries still must consider Medicare’s interests in all WC cases and ensure that Medicare is the secondary payer to WC in such cases.

*(The total settlement value includes; wages, attorney fees, all future medical expenses, including prescription drugs, repayment of any Medicare conditional payments, payout totals for all annuities to fund medical expenses as well as any previously settled portion of the workers’ compensation claim)

Effective 1/1/06: Medicare’s policy changes include prescription drugs as part of protecting Medicare’s interest. Medicare published a policy memo (4/25/06) clearly stating that the above noted criteria were created strictly as a workload review threshold for Medicare. Any workers’ compensation settlement that sought to limit or close future medicals must adequately consider Medicare’s interest.

Details provided by U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services.
For more information, go to http://www.cms.hhs.gov