Settlement of Workers Compensation (“WC”) Claim when Medicare’s Interests are in issue:

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A. It will be paid by Medicare
B. Subject to applicable:
i. Co-insurance
ii. Deductible amount
C. This is true
i. Before settlement,
ii. After settlement, and
iii. After an Award for medical benefits is made

6. While there is no statute requiring a “Medicare Set-Aside Trust,”
A. However, settlement must contain appropriate and adequate allocation
i. for future medical benefits
ii. that do not shift the burden for care on Medicare. See, 42 U.S.C.1395y(b); 42 CFR 411.26-411.54; www.cms.hhs.gov.

7. COB has provided guidelines for CMS approval of future medical care settlement allocations in workers compensation claims. Http://www.cms.hhs.gov/medicare/cob/.

8. Settlement documents may be submitted to CMS, which will
A. Approve the settlement proposal
B. Disapprove, pursuant to CMS published memos.
C. Not likely do so as quickly as counsel would like !

9. If settlement appears to shift to CMS responsibility for payment of medical care for the treatment of the workplace injury,
A. Settlement will not be recognized
B. CMS will assume ENTIRE settlement was for future medical care.

10. If settlement language is reasonable
A. Approved by state WC judge, and
B. Contains sufficient medical documentation for allocation,
C. Then Likelihood of CMS “second guessing” is reduced.

Since this is an evolving area of the law, and states Workers Compensation Commissions may differ on the need or process for getting CMS approval of Medicare Set Asides, this outline should be modified for use in your practice and “adapted” to the current state of the law in your jurisdiction. However, having an outline to show the client, referring counsel and others involved in the claim will help you to organize yourself and your firm’s processing of these increasingly complicated claims.

More and more workers compensation counsel and third party liability attorneys are going to be seeking assistance with their claims from experienced Social Security law practitioners. This is an area where the Federal government is heading toward causing State Workers Compensation claims and tort cases with long term medical care issues to come under the scrutiny of the Social Security Act, specifically with regard to Medicare as Secondary payer. Who would have thought that the members of this section would be the common denominators in an area of law necessary for the final settlement of significant workers compensation AND personal injury claims ?!!? Armed with this knowledge, wtrial lawyers like Herndon’s Doug Landau help clients of the Landau Law Shop and also fellow ATLA members who seek full justice for injured workers, innocent tot victims and their families.

Further reading:
1. “Understanding the Medicare Secondary Payer Program, www.medicareadvocacy.org/Medicare_MSPprogram.htm
2. “Medicare Secondary Payer for Attorneys United Government Services, LLC, (Frequently asked questions regarding Medicare recovery in Liability, No-Fault and Workers Compensation Situations),” www.ugsmedicare.com/msp/msp_attorney.asp
3. TRIAL, “Making sense of Medicare Set-Asides, Garretson, M., pp.64-73 (5/2006)

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