by Alba C. Hernandez –
With an aging workforce population, an ever increasing concern in settling workers’ compensation claims is protecting Medicare’s interests. Failing to do so can impact virtually every party to a settlement, so it is important to understand the process when settling with someone who is (or may be!) Medicare eligible or a Medicare beneficiary.
First determine if the Claimant is a current Medicare beneficiary. If yes, you will need to obtain an MSA for all settlements at or above $25,000.00. In this situation, it does not matter why the person is eligible for Medicare; it only matters that they are currently a beneficiary.
If your Claimant is not currently a Medicare beneficiary, you must determine if they have a “reasonable expectation” of becoming a beneficiary within 30 months from the date of the settlement AND the total settlement is $250,000.00 or more.
What does it mean to have a “reasonable expectation”? Here are some factors to consider:
- Did the Claimant apply for Social Security Disability Benefits?
- Does the Claimant anticipate appealing a SSD Denial?
- Is claimant at least 62.5 years old?
- Does the Claimant have end stage renal disease but does not yet qualify for Medicare for this condition?
If the Claimant has “a reasonable expectation” of becoming a beneficiary within 30 months, you must to obtain an MSA IF your settlement is $250.000.00 or more.
But how do you know if your claim meets the settlement amount thresholds? What benefits and payments count toward the limit?
Settlement amount thresholds take into consideration the money paid as part of a previous settlement of any portion of the claim (such as a prior indemnity settlement) amounts paid at the current time to settle benefits (such as future medicals, indemnity, vocational benefits and prescription medications). Also included are attorney’s fees paid in the settlement, costs/expenses paid in the settlement and payment of any Medicare conditional payment and past lien claims. If you are utilizing an annuity or structured settlement, be sure to use the amount expected at payout, not the cost to purchase the annuity.
Once you have obtained an MSA, one or more of the parties may believe the MSA does not accurately reflect Claimant’s future treatment needs. Some ways to address this include:
- using Claimant’s rated age to determine life expectancy,
- having physicians revisit the treatment plan and use of prescription medications, and/or
- waiting to see if Claimant’s treatment changes over time. If the claim has been denied in its entirety, early settlement negotiations may lead to utilizing “a zero allocation” MSA in settlement.
Consideration of these issues will put you on the right path, but ignoring them can give rise to tremendous heartache. One final recommendation: always consult with your defense attorney and MSA vendor!
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