CMS Reiterates and Clarifies Its Policy Regarding Workers Compensation Medicare Set Aside Proposal Review Thresholds
The Centers for Medicare and Medicaid Services (CMS) has released a new policy memorandum dated May 11, 2011 (May 11, 2011 memo) pertaining to workers’ compensation Medicare Set Asides (MSA). CMS’ policy memorandum does not set forth any substantive changes regarding its MSA review thresholds and process, but instead reiterates and clarifies its MSA proposal review thresholds. Those thresholds remain as follows:
CMS recommends that it review MSA proposals when either (1) the claimant is currently a Medicare Beneficiary, AND the total settlement amount is greater than $25,000.00; OR (2) the claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date AND the total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to exceed $250,000.00.
Submission of an MSA proposal to CMS for review and approval is a recommended process, and is not mandatory under any statutory or regulatory provisions. CMS reviews certain workers’ compensation settlements in order to protect Medicare’s interests under the Medicare Secondary Payer Statute, which is codified at 42 U.S.C. § 1395y. An MSA should not be submitted to CMS when settling a workers’ compensation claim with medical benefits remaining open. Furthermore, CMS will not review new MSA proposals if the thresholds are not met.
Finally, ALL claimants, employers, insurers, and their representatives need to be aware that there is no "safe harbor" threshold, and the thresholds set forth by CMS are guidelines only. The parties must still consider Medicare’s interests in ALL workers’ compensation cases and ensure that Medicare is the secondary payer to workers’ compensation. Additional information can be found at http://www.cms.gov/WorkersCompAgencyServices.