Dealing with Medicare Issues in Workers’ Compensation Settlements

Medicare has been paying for injured workers’ medical expenses, even when they should be covered by workers’ compensation or other insurance. The Centers for Medicare and Medicaid Services (CMS) is working to collect the money owed to Medicare for these expenses.

Medicare may not pay for medical treatment if it can be covered by workers’ compensation or other insurance. If Medicare does pay, the insurance company or responsible party must reimburse Medicare. If they don’t, interest can be charged.

A Medicare set-aside custodial fund is a way to ensure Medicare covers future medical expenses after a workers’ compensation settlement. It’s funded with a lump sum of money to cover future medical expenses that Medicare would normally cover. Once the fund is used up, the injured worker can use Medicare for any future medical expenses. Approval from CMS is usually needed to set up the fund. When settling a workers’ compensation case, it’s important to consider Medicare’s rights and potential medical needs. In order to approve a settlement agreement with a Medicare set-aside custodial fund, CMS needs information about the worker’s injury, medical treatment, and other factors such as their age, disability, and future medical needs. It’s important to provide all relevant documentation to CMS for evaluation. Recently, CMS has been reminding insurers to consider Medicare’s interests when settling future medical benefits in workers’ compensation cases. They have made it clear that they will take legal action if necessary. A Medicare set-aside should be used if someone is getting a settlement that closes their future medical benefits and either they are already on Medicare or they will be on Medicare within 30 months and the settlement is expected to be more than $250,000. If someone is already getting Social Security disability benefits, they will likely qualify for Medicare within 30 months. To qualify for Social Security disability benefits, you must be unable to work because of a physical or mental condition that is expected to last at least 12 months. There are other ways to qualify too, like if you’re over 50 and can’t do your old job because of an impairment, or if you have a long history of heavy, unskilled work. If a worker is getting Social Security benefits but the settlement isn’t over $250,000, they can still have a Medicare set-aside. This protects the worker, employer, and insurer in the future. The amount put into the set-aside isn’t negotiated, but is determined by experts who review the worker’s medical records and consult with medical providers. The set-aside is used to pay for future medical treatment that Medicare would normally cover. It’s best to have a custodian manage the set-aside, especially if it’s a large amount. The custodian pays medical bills directly. The set-aside can only be used for work-related medical expenses that Medicare would cover, and can only be used once the worker is a Medicare beneficiary. The custodian must send reports to Medicare every year with details of the money spent and added to the fund. When the money runs out, they send a final report and then their job is done. If the worker dies before the money is all used, it will go to their estate. The injured worker can also manage the fund, but they have to follow the same rules and send the same reports. Basically, when dealing with workers’ compensation claims, it’s important to consider Medicare’s interests. If a worker gets injured on the job and has Medicare, the employer and insurance company can settle the claim for future medical expenses without worrying about Medicare trying to get reimbursed later. This is done through a Medicare set-aside agreement, which ensures the worker will still have Medicare coverage for future medical treatment. This makes it easier to settle the claim and get approval from the courts. Medicare set-asides can save money for employers and insurance companies. They allow for a compromise on future medical expenses and provide added benefits for injured workers. This information is provided by the Workers’ Compensation Section.

Source: https://www.floridabar.org/the-florida-bar-journal/dealing-with-medicare-issues-in-workers-compensation-settlements/