When settling a workers’ compensation claim, particularly when the claimant is a Medicare beneficiary or may soon become one, it is crucial to consider Medicare’s interests regarding future medical expenses. This is where a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) comes into play. A WCMSA is designed to allocate a portion of the workers’ compensation settlement specifically for future medical expenses that would otherwise be covered by Medicare. Here, we will explore the circumstances under which a WCMSA should be established and submitted to the Centers for Medicare & Medicaid Services (CMS) for approval.
What is a WCMSA?
A Workers’ Compensation Medicare Set-Aside Arrangement is an allocation of a portion of a workers’ compensation settlement for future medical expenses related to the work injury that would otherwise be payable by Medicare. The purpose of a WCMSA is to protect Medicare’s interests by ensuring that the settlement adequately covers these future medical costs before Medicare becomes responsible for payment.
When is a WCMSA Necessary?
Not all workers’ compensation settlements require a WCMSA. However, a WCMSA is generally recommended or required in the following circumstances:
- Current Medicare Beneficiaries: If the claimant is already a Medicare beneficiary and the total settlement amount is more than $25,000.00, a WCMSA is recommended. CMS approval is encouraged to ensure that Medicare’s interests are adequately protected.
- Future Medicare Beneficiaries: If the claimant has a “reasonable expectation” of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount is greater than $250,000.00, a WCMSA is also advisable. A claimant might have a reasonable expectation of Medicare enrollment if they:
- Have applied for Social Security Disability Benefits.
- Have been denied Social Security Disability Benefits but are appealing the decision.
- Are 62 years and 6 months old.
- Have End-Stage Renal Disease but do not yet qualify for Medicare based on that condition.
Why Submit a WCMSA to CMS?
Submitting a WCMSA to CMS is not legally required, but it is highly advisable. When CMS reviews and approves a WCMSA, it ensures that the amount set aside for future medical expenses is sufficient. This approval offers the claimant protection from Medicare later denying coverage for these expenses or seeking recovery of payments. If the WCMSA is not submitted for CMS approval, Medicare may refuse to pay for future medical costs related to the work injury until the entire settlement is exhausted.
The CMS Review Process
The CMS review process involves several steps:
- Proposal Submission: The claimant or their representative submits a WCMSA proposal to CMS, either electronically via the WCMSA Portal or by mail. The submission should include detailed medical records, payment histories, and other supporting documentation.
- Review and Evaluation: CMS, through the Workers’ Compensation Review Contractor (WCRC), reviews the proposal to determine whether the set-aside amount is adequate to cover the claimant’s future medical expenses related to the work injury.
- Approval or Modification: If CMS finds the proposed amount sufficient, it approves the WCMSA. If CMS determines that the amount is inadequate, it will counter with a higher amount that must be set aside.
- Finalization: Once CMS approves the WCMSA, the settlement can be finalized, and the set-aside amount must be properly funded and administered.
Conclusion
Establishing and submitting a WCMSA to CMS is a critical step in protecting both the claimant’s and Medicare’s interests in a workers’ compensation settlement. While not always legally required, CMS approval provides certainty and peace of mind that Medicare will continue to cover future medical expenses once the set-aside funds are exhausted. Understanding when a WCMSA is necessary and following the correct submission process can prevent future complications and ensure compliance with Medicare’s regulations.
For more detailed guidance on this process, consulting the latest CMS WCMSA Reference Guide or a legal professional experienced in Medicare Secondary Payer compliance is recommended.
Get Help From Our Fresno, CA Workers’ Compensation Defense Law Firm Today
At Yrulegui & Roberts, our Fresno workers’ compensation defense law firm provides aggressive and solutions-focused legal advocacy. We represent employers and insurance carriers. If you have any questions about Medicare Set-Asides, please do not hesitate to contact us today. Our firm provides workers’ compensation defense representation in Fresno, Bakersfield, Sacramento, Pasadena, and throughout the region.
