What Criteria to Use for a Medicare Set Aside?
During the past several months, our clients have asked us to revisit the key criteria for The Centers for Medicare and Medicaid Services (CMS) determining if a Lump Sum or Structured Settlement sufficiently takes into account it’s interests for a Medicare Set Aside (MSA).
Generally, CMS considers whether the amount allocated for future medical expenses is reasonable. In addition, the repayment of conditional payments made by Medicare should be taken into account during the MSA review process. Consequently, CMS considers the following criteria when reviewing Workers’ Compensation Medicare Set-aside Arrangements (WCMSAs).
- Date of entitlement to Medicare. This is the date that Medicare uses to begin accounting the use of funds for medical treatments and medications associated with the accident.
- Basis for Medicare Entitlement. Medicare needs to know if the entitlement meets the rules established for the Medicare Set Aside. The submission documentation should state if the WCMSA is because of the claimant’s eligibility, disability, End-stage renal disease (ESRD) or age.
- Type and Severity of the Injury or Illness. Medicare is interested in the relevant diagnosis codes so the injury or illness related expenses can be identified, if the claimant will regain a full or partial recovery, and what the projected time frame would be if a partial or full recovery is anticipated. Also, they want to know if the claimant’s medical condition is stable, or if there is a possibility of medical deterioration.
- Age and Condition of the Claimant. As part of the WCMSA analysis process, it is important to determine if the claimant’s accident and non-accident conditions will affect their medical condition and shorten their life span.
- Workers’ Compensation Classification of the Claimant. From the Workers Compensation record, it is important to identify if the claimant is Permanent Partial Disabled (PPD), Permanent Totally Disabled (PTD), or a combination of both.
- Prior Medical Expenses. It is important to consider all medical expenses paid by the insurance company due to the injury or illness in the two-year period after the condition has stabilized. This analysis includes reviewing the conditional payment record to determine what payments have been made by Medicare that are related to the accident. This may include a negotiation of what is recoverable by Medicare, and what future interests should be considered in a Medicare Set Aside.
- Living Arrangements at Home, Nursing Home, or Assisted Living Care. If the claimant is living in a nursing home, or receiving assisted living care, it should be determined who is expected to pay for such Will it be the Workers Compensation carrier for life time or a specified period, or from the medical benefits allocation of a lump sum settlement through and Medicare or Medicaid Set Aside?
- Are the Expected Expenses Appropriate. Estimated medical expenses should include an amount for hospital, medical care and/or medications during the Workers Compensation benefit/MSA time period. Our primary focus only deals with services and medications related to the Workers Compensation accident or illness. Medicare then determines whether the amount of the Lump Sum or Structured Settlement will sufficiently take Medicare's interests into account.
- The Amount of the Lump Sum or Structured Settlement
Once the basic analysis and projections are finalized and approved by Medicare, a Lump Sum or Structured Settlement analysis is completed to determine the best MSA funding alternatives for all parties. The Structured Settlement provides a certain way for all the parties, including Medicare, to agree to settle the case in the most efficient manner possible.