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“In today’s environment, proper evaluation of medical expenses is a significant factor in the effective resolution of claims. Both past and future medical expenses must be considered, particularly where Medicare is involved.”
The Medicare Secondary Payer Act (MSP) applies across the board to workers’ compensation, no-fault and liability actions. The same includes actions governed by the Federal Employees’ Compensation Act, the Federal Coal Mine Health and Safety Act of 1969, the Longshore and Harbor Workers’ Compensation Act and the Jones Act.
The purpose of the Medicare Set-Aside arrangement (MSA) is to provide funds to the injured party to pay for future medical expenses that would otherwise be covered by Medicare, otherwise known as “qualified medical expenses.“ If the injured party incurs qualified medical expenses that exhaust the anticipated MSA amount, Medicare should then pay for any excess allowable expenses, if the MSA was properly exhausted. By establishing a Medicare Set-Aside Account, parties to a settlement are protecting Medicare’s interest and complying with the intent of the Medicare Secondary Payer Act.
In the workers’ compensation realm, the Centers for Medicare and Medicaid Services (CMS) has established thresholds for determining whether parties are adequately protecting Medicare’s interests in a particular settlement and claim. Parties may submit a proposed Medicare Set-Aside to CMS, for review and approval, outlining future anticipated qualified medical expenses. CMS will then opine as to the sufficiency of the same, thus providing assurances that Medicare shall remain secondary payer.
While Medicare requires the consideration of Medicare’s interest in all workers’ compensation settlements involving a Medicare beneficiary, CMS only offers review of Medicare Set-Asides that meet certain requirements:
A WCMSA may be submitted for CMS approval if:
A claimant has a reasonable expectation of Medicare enrollment within 30 months if any of the following apply:
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. Please see www.cms.gov and the latest WCMSA Reference Guide for any threshold updates.
While we have had specific thresholds for review of workers’ compensation MSAs in place since 2001, the same is not the case for third party liability claims. Medicare has yet to issue formal submission and review thresholds for liability claims on a national level. While the liability MSA remains a voluntary procedure, Medicare has repeatedly noted that the government has the same interests for liability claims as it does for workers’ compensation, and that the Medicare Secondary Payer Act applies to workers’ compensation, no-fault and liability claims. 42 U.S.C. §1395y(b)(2)(A)(ii)
At present, the 10 Regional Offices of Medicare have the discretion to review and approve voluntary submission of liability MSAs. Some exercise this option, while others decline review, but note that parties must still ensure Medicare’s interests are accounted for as secondary (rather than primary) payer.
” It is critical that you entrust a professional company with the job of handling your Medicare needs.”
Atlas Settlement Group actively assists clients with navigating the ever changing liability MSA landscape, providing guidance with liability claims and potential development and submission of third party MSA plans. Medicare’s demands can create confusion and uncertainty in the settlement arena. It is critical that you entrust a professional company with the job of handling your Medicare needs. Atlas Settlement Group and our partners provide a complete range of services to ensure that both Medicare and the parties’ best interests are considered.
Our available Compliance Services include:
In addition to workers’ compensation and third party liability MSA guidance, we are available to assist with any pre-settlement conditional payment “lien” negotiation, as required under 42 U.S.C §1395y(b)(2) and 42 CFR §411.24. This is a key component of Medicare compliance as virtually all parties to a settlement may be responsible for ensuring that pre-settlement conditional payments are reimbursed to Medicare.
Finally, we are able to assist with questions regarding Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA). This federal law requires Responsible Reporting Entities (RREs) to report the basic terms of a payment, award or settlement to Medicare. This law, which has evolved over the past couple of years, has allowed Medicare access to greater information regarding claims, the settlement of the same, and whether or not the parties have actively complied with MSP obligations.