WCMSA – How Workers Compensation Became Federalized 

The WCMSA rules by The Center For Medicare/Medicaid services (CMS  have been in place for years. 

I received a large number of questions on the subject of Workers Comp Medical Set Asides (MSA’s). The previous article on MSA’s was the most popular article since I started this blog. I thought I would cover them again and include some of the rules and regulations from the CMS. The blog readers have spoken. This is one to print and keep for your records.

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The US Department of Health and Human Services – Centers for Medicaid and Medicare (CMS) has issued a ruling many years ago. The ruling did and does not allow a Workers Compensation settlement to just dump all future benefit needs into the Social Security system to keep settlement values low. I will post more on this next time as this is a very long one to read – but it is critical to your Workers Compensation program. As they say – this is straight from the horse’s mouth.

All parties in a Workers’ Compensation (WC) case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving WC cases that include future medical expenses. The recommended method to protect Medicare’s interests is a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA), which allocates a portion of the WC settlement for future medical expenses. The amount of the set aside is determined on a case-by-case basis and should be reviewed by CMS, when appropriate. Once the CMS determined set aside amount is exhausted and accurately accounted for to CMS, Medicare will agree to pay primary for future Medicare covered expenses related to the WC injury.

Settlements Entered Into Prior to the July 23, 2001 ARA Letter Concerning WC Commutation of Future Benefits

(Ref: 7/23/01 Memo)

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The CMS will treat WC cases that were settled prior to the issuance of the July 23, 2001 ARA letter concerning WC Commutation of Future Benefits in the same manner as those settled after the review threshold guidelines were established. This will be done regardless of when the settlement actually occurred. However, a reopening of claims (see 42 C.F.R. 405.750 and 405.841) that Medicare previously denied for these individuals will not be granted, nor will the CMS change any decisions already made with respect to settlements which pre-date July 23, 2001.

Additional Information: When the CMS issued the July 23, 2001 ARA letter, it established review thresholds for WC cases settled by injured individuals who are not yet Medicare beneficiaries. This was done in order to organize and prioritize workloads for its Regional Offices (RO’s) and to convey to its ROs that it is not in Medicare’s best interests to review WC settlements that do not meet the review thresholds.

CMS Review Threshold

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It is not in Medicare’s best interest to review every WC settlement nationwide in order to protect Medicare’s interests per 42 CFR 411.46. (Ref: 7/23/01 Memo Q1(c)) A WCMSA is not necessary when resolution of the WC claim leaves the medical aspects of the claim open.

A Worrkers Compensation Medicare/Medicaid Set Aside  (WCMSA) may be submitted to CMS for review in the following situations:

• The claimant is currently a Medicare beneficiary and the total settlement amount is greater than $25,000; OR
• The claimant has a “reasonable expectation” of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.

Next up – How To Monitor Your MSA claims

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