Medicare Set Aside Personal Injury Requirements and Process
Medicare is not responsible for paying a beneficiary's medical expenses for a personal injury when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.”
Under Section 1862 42 U.S.C. §1395y(b)(2) and § 1862(b)(2)(A)(ii) of the Social Security Act, Medicare is not responsible for paying a qualified injured person’s medical expenses when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.”
If the medical expenses are disputed in a personal injury situation, the provider, physician, or other supplier may bill Medicare as the primary payer. If the product or service is normally reimbursable under Medicare rules, Medicare may pay the expenses conditionally. Then if there is a subsequent settlement, judgment, award, or other payment, Medicare requires reimbursement of the expenses.
For example, if the beneficiary was injured or became ill on the job, they would establish a Medicare approved Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA). This amount of money is forecasted as a final amount that must be spent by the beneficiary related to the injury before Medicare makes any payments toward the personal injury settlement.
How does a beneficiary reimburse Medicare?
When a personal injury claim is settled, the Benefits Coordination & Recovery Center (BCRC) issues a formal demand letter advising the beneficiary and their attorney of the primary payment responsibility. They may issue preliminary letters to assist in the settlement process. These letters include: 1) a summary of conditional payments made by Medicare; 2) the total demand amount; 3) information on applicable waiver and administrative appeal rights. Click here for a flowchart of the Medicare Conditional Payment Recovery Process >>
When the conditional payments have been finally determined and negotiated and the Medicare Set-Aside has been determiined, the beneficiary will receive a letter from Medicare about how to account for the funds. The funding typically is arranged as a Lump Sum or Structured Settlement, depending upon the circumstances of the case. Quite often, it is best to determine all potential amounts of money as early as possible in the settlement process to avoid confusion and to smoothly resolve the case.