August 15, 2014 Article

Maine Workers' Compensation Alert: CMS Guidelines Amended to Accept WCB Settlement Determination of MSA Amount After Hearing on the Merits

The Center for Medicare and Medicaid Services (CMS) update to its Workers’ Compensation Medicare Set-Aside (WCMSA) Arrangement Reference Guide provides authority by which CMS will now recognize and defer to a Workers’ Compensation hearing officer’s settlement approval which determines the specific amount of the settlement allocated to pay for work injury related future medical expenses. Section 4.1.4 of the Reference Guide provides:

"When a state WC judge approves a WC settlement after a hearing on the merits, Medicare generally will accept the terms of the settlement, unless the settlement does not adequately address Medicare’s interests. If Medicare’s interests were not reasonably considered, Medicare will refuse to pay for services related to the WC injury (and otherwise reimbursable by Medicare) until such expenses have exhausted the dollar amount of the entire WC settlement. Medicare will also assert a recovery claim if appropriate.

  • If a court or other adjudicator of the merits (e.g., a state WC board or commission) specifically designates funds to a portion of a settlement that is not related to medical services (e.g., lost wages), then Medicare will accept that designation."

CMS still retains independent authority to determine whether Medicare’s interests are protected. CMS may disregard the WCB determination if it concludes Medicare’s interest is not adequately protected. But if a WC settlement clearly designates and finds after a hearing on the merits a reasonable amount of the settlement to be set aside to pay future medicals, CMS says it will accept the MSA determination. Using this procedure, the parties to a WC settlement in which CMS approval of an MSA previously has been required may avoid the delay in obtaining formal CMS approval of the MSA.

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