Monitoring Workers Compensation MSA Claims
I received a question about how to monitor workers compensation MSA claims for Workers Comp. Please check the last post for the definition of a Medical Set Aside or MSA claim. The best way to monitor the MSA – sometimes called WCMSA is to examine the thresholds.
The thresholds are:
- 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.
Whether your company has a traditional Workers Comp insurance policy or is self insured makes no difference on the monitoring of a possible WCMSA claim.
The first bullet point above is clear. If the injured employee is a Medicare beneficiary and the total settlement is $25,000 or greater, then your company has to have the settlement approved by the CMS.
The second bullet can be complicated. Our clients and companies that have contacted us have been confused about the term reasonable expectation that the employee will apply for Medicare within 30 months. The other area that is confusing is $250,000 level of future medical or lifetime medical.
The carrier or TPA is responsible to initiate the approval if they consider the claim to be a possible WCMSA. However the ultimate responsibility falls on the employer as is the case with most business insurance policies.
The simplest way is to request at policy renewal that all settlements of $25,000 or above have to be approved by you, the employer in writing. In fact, we advise most of our clients to make sure that all settlements of $10,000 or more have to be agreed to in writing by a designated person at the employer. Emails count as an approval.
This cuts down on any premium surprises at renewal and also allows the employer to be an additional checkpoint to make sure that the WCMSA Federal Laws have been satisfied.
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