7.
If the WC case settles for less than $25,000
do I need an MSA?
If
the employee is on Medicare at the time of settlement, then an MSA is needed
regardless of the settlement amount. There is a distinct difference between when
an MSA is needed and when The Centers for Medicare and Medicare Services (CMS)
will review and approve a proposed MSA. Many confuse these two issues. Here is
how the CMS explains it:
The CMS wishes to stress that this is a CMS
workload review threshold and not a substantive dollar or “safe harbor”
threshold. Medicare beneficiaries must still consider Medicare’s interests
in all WC cases and ensure that Medicare is secondary to WC in such cases.
April 24, 2006 Memorandum.
CMS Review Threshold
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 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.
Therefore, many people are
under the impression that if the case settles for less than $25,000 (when the
claimant is a Medicare beneficiary) or under $250,000 (when the claimant is not
a Medicare beneficiary) that an MSA is not needed. This is not the case.
An MSA is still needed; CMS, however, will not review and approve the MSA. This
is a subtle but significant difference that should not be overlooked.
BACK
All of the content was
prepared by Michael R. Merlino II, an attorney in Georgia who focuses on his
practice primarily on MSAs. He prepares MSAs for many large self-insureds and
insurance companies. If you have questions, he can be contacted at 770-374-3697
or
mmerlino@gmail.com. He also has a website devoted to MSAs, which is updated
frequently: www.wcmsainfo.com
© 2007
Wisconsin Association of Worker’s Compensation Attorneys, Inc, and Michael R.
Merlino II. All rights reserved.
