April 29, 2009 Lorman Teleconference

Medicare Set-Aside Blog on April 30, 2009
Posted by


I again want to thank everyone who signed up for the Lorman
teleconference. This was actually supposed to be a repeat performance of the
call that took place on April 1, 2009, but given the new CMS mandates in the
past 4 weeks, I really feel as if it was a totally different presentation. Hope
you all found it helpful.


Answers to the questions posed utilizing the presentation tool
online and via email are as follows. Please feel free to send any follow-up
questions or let me know if I missed any. I am happy to help everyone
understand this unnecessarily confusing issue a little better.



Medicare only seek reimbursement from carriers and self-insurers on settlements
they have made?  Or can they also seek reimbursement for claims where no
settlement was made?  For instance, a claimant may stop treating for a
permanent partial injury, then while this individual is covered by Medicare,
their injury is aggravated.  Can Medicare seek reimbursement for medical
services under the Secondary Payers Act in this situation?


may only seek repayment once a liability settlement is reached because it does
not have a claim until it arises by operation of law upon the making of the
insurance payment. It may seek repayment on a WC or no-fault claim at any time
the accepted claim is open. And if I understand your example, if there is no
settlement in a liability claim yet that injury was exacerbated and required
treatment later, I think it would depend on if the claim could still be
pursued, i.e. statute of limitations run. I believe there are situations like
with PIP coverage where they could continue to come back until the policy limit
was exhausted but that is basically an open claim. If I didn’t hit the answer,
give me a little more clarification as to the type of claim and maybe I can try



have a workers’ compensation statute that requires the employer to remain
responsible for medical benefits for life.  Does this eliminate the need
for a MSA?  Also, after 3 years we can negotiate a settlement of future
medical benefits.  Would the negotiation of that settlement bring about
MSA requirements?


medicals are open for life, then Medicare has no exposure and an MSA is not
needed. I’m not certain if you are referring to the same right to lifetime meds
in the second part of your question, but in any situation where you can
terminate your responsibility for future medical treatment and there is
treatment reasonably anticipated and related to the claim that would otherwise
be covered by Medicare, then yes an MSA situation would arise.



defend major personal injury cases.  Am I correct that I only need to
provide medicare setasides when the plaintiff is already a medicare beneficiary
and the settlement exceeds $25,000 or when there is a reasonable expectation of
medicare entitlement in the next 30 months and the settlement exceeds
$250,000?  Reasonable expectation of medicare entitlement meaning the
plaintiff has applied for SSDB or still has appeal/re-filing rights, is 62.5
years old or has end stage renal disease but does not qualify for medicare?


are confusing the needs for an MSA and the ability to have CMS review a WCMSA.
The criteria that you set forth in your question are review thresholds for the
contractor that reviews proposed MSAs on behalf of CMS and have nothing to do
with the need to protect Medicare’s interests in a settlement. An MSA is needed
in any settlement where an injured party has foreseeable future medical
treatment related to your claim that will arise at a time when he is Medicare
eligible and Medicare would otherwise cover that treatment.




Where can I find the final order in CARES, INC. v. Leavitt?


2008 WL 4737164 (E.D. CA) 


Work comp-If public agency payer continues all future medical
payments does medicare become a secondary payer? Is MSA required in that


No, you only need an MSA if you
terminate your responsibility for medical.


If you have medical payments coverage in a non-liability case and
the claimant has out of pocket expenses can you pay the claimant his bills and
then the balance to Medicare




When you reference CMS Memo of 4/21/03, in which of the internet
resources would we find that?


Scroll to the bottom of this link to Downloads:




Where one defendant (and insurer)
settles out of a case ahead of the other defendants, does that settling
defendant need to satisfy (all or part of) the Medicare lien out of that
separate settlement?


How do i sign up for the
subscription service you discussed, and can i subscribe if i’m not a reporting
employer (claimant’s counsel)?

For updates related to CMS review process for WCMSAs, scroll to
the bottom of this page to links inside CMS:



For updates related to MMSEA NGHP reporting, scroll to the bottom
of this page to links inside CMS for email updates and notifications:




If statute of limitation passes on
3rd party case, can medicare still go after Liability Insurance company?

If the SOL is over, there is no legal liability of the insurance
company to pay on the claim regardless of who brings it. Even if they are
invoking their subrogation rights, they are still subject to the same laws that
govern the claim. However because Medicare’s rights to repayment arise out of
operation of law based upon an insurance payment, if no payment (let alone
claim) occurred, those were just ordinary Medicare payments.



In a state where medical benefits for workers compensation remain
the responsibility of the employer by statute for life, how does this apply?


You do not need a MSA but you will have to report the ORM (ongoing
responsibility for medical) under the MMSEA.  You only need to protect
Medicare’s interest under the MSP statute if they have an interest to protect.
If medicals are open and open for life, I’d say Medicare is safe.



Who should we contact to get permission to settle (phone number,


You don’t need CMS’s permission to settle a claim as that is a legal
right your have absent any overlaying Medicare issues that may be tied to it.

You can obtain CMS’s opinion in a WC settlement as to the adequacy
of an allocation set aside for future related medicals that would otherwise be
covered by Medicare.


c/o Coordination of Benefits Contractor
P.O. Box 33849
Detroit, MI 48232



You can notify the MSPRC that a settlement has or will happen and
request information about monies that may be owed Medicare from the settlement.

Medicare—Coordination of Benefits
MSP Claims Investigation Project
P.O. Box 33847
Detroit, MI 48232
(800) 999-1118



Aren’t MSA only mandated for Workers Comp Claims at the present


MSAs are mandated by virtue of the MSP statute itself in any
settlement that has foreseeable anticipated Medical expenses that would
otherwise be covered by Medicare regardless of the type of insurance [statute
below specifically cites all types of insurance]. You are confusing the need
for an MSA with the availability of CMS review of a WC claim that meets the
workload thresholds thresholds of its review contractor. With the new MMSEA
reporting requirements, CMS will be on notice of every settlement with
foreseeable future medical of Medicare beneficiaries where MSAs were not



(A) In general

Payment under this subchapter may not be made, except as provided
in subparagraph (B) [Conditional Payments], with respect to any item or service
to the extent that –

(i) payment has been made, or can reasonably be expected to be
made, with respect to the item or service as required under paragraph (1),


(ii) payment has been made, or can reasonably be expected to be
made under a workmen’s compensation law or plan of the United States
or a State or under an automobile or liability insurance policy or plan
(including a self-insured plan) or under no fault insurance.



You talked about exceptions to reporting new requirements for WC
case — meds only claim, less than 7 days lost time, and “under
$600”. What under $600? Under $600 in medicals? Where is this information?




(let me know if claims really exist that meet that criteria)




Set-Aside Allocation/Arrangement Recommendations

to Centers for Medicare and Medicaid Services


Benefit Management