Medicare Set-Asides (MSAs) and Workers Compensation cases

In several ABRAMS LANDAU Workers Compensation settlements, the parties have agreed to a compromise of the case and also submitted a Medicare Set Aside (“MSA”) so that the Social Security Administration will not be “left holding the bag”.  In other words, according to Broadland and Ashburn disability lawyer Doug Landau, the Federal Government does not want to be left to pay for medical care that a workers comp insurance company should be paying after the case is settled.  So, in cases where the injured worker is considering a substantial settlement and receiving Social Security Disability Income (“SSDI”) benefits or will likely get SSDI in the near future, Virginia Social Security lawyer Landau recommends consideration of the Federal Government’s interests and a potential MSA.  This is not just for the compromises of Virginia workers comp claims, but for other states as well.

On January 4, 2010 the Maryland Workers’ Compensation Commission (“MD WCC”)  adopted new rules requiring settlements to fully comply with the Medicare Secondary Payer Act (MSP) when closing future medicals in a Workers’ Compensation Settlement.  Gould and Lamb a company experienced in Medicare Secondary Payer (MSP) and Mandatory Insurer Reporting (SCHIP) compliance notes that, “Many in the industry feel this could be the start of states nationwide passing formal regulations for fully Medicare compliant settlements.”

The MD WCC now requires the following:

1)If your settlement falls within the Medicare review thresholds, you must obtain CMS approval of a Medicare Set-Aside Allocation before the Commission will approve your settlement. The Commission will allow a bifurcated settlement in which you settle out the Indemnity portion of the claim while waiting for Medicare approval.

2) If your settlement falls outside the Medicare review thresholds the settlement must:

Contain a statement that Medicare’s interests have been considered and identify the amount of the proposed settlement apportioned to future medical expenses.


Identify the amount of the proposed settlement that is set- aside for future medical expenses through a formal set-aside allocation.

The MD WCC modified the H-07 settlement worksheet which can be used by the claimant or claimant’s attorney for the purpose of securing the Commission’s approval of the proposed agreement of Final Compromise and Settlement.

The adoption of these new rules makes it clear that the MD WCC intention is for full Medicare compliance in every settlement in which medicals will be closed as part of the Workers’ Compensation Settlement Agreement.  The Commission is looking for language and an allocation or medical evidence outlining the claimant’s future medical needs in every settlement.

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