When is a Medicare Set-Aside Required?
MAY 15, 2023
Imagine cruising down the freeway at breakneck speed. The sunroof is open, and the speakers on a high-end stereo are blasting your favorite tunes. What, me worry? Nothing “requires” you to drive the speed limit. What are the chances this defense would work in front of the judge?
Like the speed limit on the roads, nothing in the Medicare Secondary Payer Act “requires” parties to include a Medicare Set-aside in their settlement. Instead, parties should reframe the question and ask, “Is a Medicare Set-aside” recommended?”
Factors to Consider for a Medicare Set-Aside
There are several factors to consider when determining if a Medicare Set-aside (MSA) is recommended in your workers’ compensation settlement. These factors should include discussion and review to ensure effective compliance.
Age/Medicare Status of Employee: The employee’s age should be reviewed. The closer someone gets to becoming a Medicare beneficiary (65 years old), the more likely you may need an MSA in your settlement. It is also crucial to evaluate the employee’s Social Security Disability status. An employee will become a Medicare beneficiary after being disabled under Social Security Administration rules for two years.
Nature and Extent of Injuries: There also must be a close review of the severity of the work injury and whether it is permanent. Temporary injuries likely will not need extensive future medical care. On the other hand, severe injuries that include surgical intervention, amputation, multiple injuries, or catastrophic claims likely will require future medical care. While independent medical examinations carry credence within the courtroom, the Centers for Medicare and Medicaid Services has suggested that deference be given to the treating doctor regarding the nature/extent of an injury and possible future medical care.
Type of Settlement: Settlements that close out all future medical care and treatment should receive a higher level of scrutiny as it creates more likelihood that Medicare would become the primary payer post-settlement. Additional analysis should also be involved with a partial closure of future medical care or settlements closing out medical care for a specified time frame.
The bottom line is that all stakeholders should scrutinize every settlement to determine if an MSA is recommended to ensure Medicare remains the secondary payer post-settlement. This analysis should include compliance counsel from a service provider working on Medicare Secondary Payer issues.
Implementing Best Practices in Your Office
When is a Medicare Set-aside required? Never! Instead, stakeholders should change their mind frame and ask when an MSA is recommended. Factors to consider should include the employee’s age and Medicare status. Other factors include the nature and extent of the injury and reasonable future medical care. Consider the settlement type and closure of future medical care and treatment.
MSA Source is a service provider that includes the complete Medicare Secondary Payer compliance team with trained nurses and a compliance counsel with over 20 years of litigation experience in workers’ compensation and Medicare Secondary Payer compliance. With the assistance of our team, you can effectively consider Medicare’s interests and protect yourself from future adverse actions by Medicare.