A seriously injured worker may sometimes require continued medical treatment for months or even years. As we reported in a recent entry in this blog, thanks to a 2017 change in Arizona law in many such cases the compensation insurance carrier can now offer a lump sum “full and final” monetary settlement. If it is accepted and approved, such a settlement will relieve the insurer of responsibility for the cost of any future medical treatment.
– agrees to settle a workers’ comp claim in which it appears likely that future medical treatment may be required; and
– is eligible for Medicare (or will be in the near future)
federal law usually requires as part of the settlement process that a Medicare Set Aside, or “MSA” (technically, a “Workers Compensation MSA” or “WCMSA”) be established. This is because Medicare is considered a “secondary payer” for injuries covered by workers’ compensation.
CMS is the group within the federal Department of Health and Human Services with principal responsibility for establishing minimum standards for MSAs. However, in many cases, the burden of determining whether an MSA complies is on the carrier and claimant. CMS itself generally will evaluate an MSA in only when:
– The claimant currently receives Medicare beneficiary and the settlement amount is greater than $25,000; or
– The claimant is likely to become Medicare eligible in the next thirty months and the settlement exceeds $250,000
There is no requirement for a claimant to obtain CMS approval of an MSA, even if it meets the above conditions. If a submitted MSA is submitted and CMS does not reject it, Medicare will pay for medical care if the MSA funds turn out to be insufficient. Given the uncertainty surrounding both the future course of many injuries and the costs of current and future treatments and medications, qualifying for such “safe harbor” is nearly always be in an eligible client’s best interests.
The National Council on Compensation Insurance periodically studies CMS data in order to identify trends and issues in MSAs.
Most claimants with MSAs were already Medicare-eligible when they settled their workers’ comp claims. In many instances, however, they are younger than 65 but Medicare eligible because they receive Social Security Disability benefits.
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