Medicare: Set Aside Issues Following Resolutions in Relation to Personal In jury and Workers’ Compensation Cases

BY MARK KOGAN, ESQ.

In my line of work, I represent injured employees who are often times receiving lost wage benefits and medical benefits as part of a workers’ compensation case.  My law firm also represents individuals who receive Social Security Disability and who will ultimately end up being Medicare beneficiaries.  There is overlap of the two different types of insurance, and this overlap creates a necessity for the Centers for Medicaid to be involved in any potential resolution of litigation related to the payment of medical bills.

In order to further explain this, imagine that you are an injured employee and your employer’s workers’ compensation insurance carrier has been paying for all reasonable, necessary and causally related medical care for your injury.  At some point in time, you may wish to settle the workers’ compensation case and receive a lump sum settlement for your injury.  The workers’ compensation insurance carrier is going to want to close their responsibility for paying for your future lost wages and also for any potential future medical care that you may have in relation to your injury.  If you are a Medicare beneficiary, you may think that you can close your case, keep the money and then ask Medicare to pay for all of your future medical care.  This is not true.

Currently, the Social Security Administration and Medicare require approval from Medicare in order to settle the medical portion of your case.  The parameters are dictated by Medicare.  If you are receiving a settlement for less than $25,000, you can resolve the file, and Medicare does not need to approve the resolution.  The money that you receive is yours, and you can use it to spend on your potential future medical care. You can also ask Medicare to pay for your future medical care in relation to your work injury.  However, if you are currently on Medicare or you have the expectation that you will be on Medicare in the next 30 months, and if the settlement is valued at more than $25,000, you must ask Medicare to approve the settlement amount.  This is a lengthy process, and it requires an outside, independent contractor to review, with your doctor, all of your potential future medical care and prescription needs going into the future.  This means that there must be an actual dollar amount assigned to your future doctor visits, prescriptions, potential procedures, physical therapy and post-operative care.  Once this dollar amount is determined by an independent, outside contractor working on behalf of the insurance carrier, that proposal is sent to the Centers for Medicare Services to review.

The Centers for Medicare Services (CMS) can accept the amount as proposed by the independent agency or they can reject it.  I have seen CMS reject the proposed amount and increase it by a number double of the proposal for one of my clients.  However, if CMS approves the amount as proposed, the individual can settle their open workers’ compensation claim, and the individual will receive the amount as proposed in the Medicare Set Aside proposal as part of the settlement.  However, the individual cannot use that money as part of the Medicare set aside to spend on their daily living expenses; they must use it only to pay for potential further medical services.  Medicare is involved in monitoring the use of the spending of the funds, and once those funds are spent, Medicare will pay for additional medical care.

I have written this article because it is important to understand that there are multiple insurance agencies and government agencies which can assist in the payment of potential  medical care outside of the employer funded health insurance and the new Affordable Care Act.

If you have any additional questions about this issue or would like to discuss a potential resolution of your workers’ compensation case and the effects of a potential Medicare, I would certainly be glad to discuss this with you further.  I can be reached at 1-888-975-LAW1 or 5291 or our website, www.hgsklawyers.com.

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