Individuals receiving Florida workers’ compensation benefits for serious medical conditions must give deep thought and consideration to the role of Medicare in their future medical plans. This is especially so for those who are eligible or soon to be eligible for Medicare.
Because workers’ compensation has primary responsibility [for covering medical care associated with work-related injuries] versus Medicare’s secondary payor status, failing to adequately account for Medicare’s imperatives may keep the Centers for Medicare & Medicaid Services (CMS), a branch of the Department of Health and Human Services (HHS), the federal agency that runs the Medicare Program, from covering much needed future care and services.
Most Florida workers’ compensation cases end up settling. The settlement can take the form of a lump sum (all at once) payment or a structured settlement (which may also include a lump sum component). In consideration for this compensation, claimants must typically forego the right to receive future workers’ compensation medical benefits.
Given its status as a secondary payor, Medicare expects a portion of the lump sum and structured settlement money to be used by the claimant to cover the cost of medical care received in the future in connection with the work-related injuries. Until the amount, which should be pre-established by experts and approved by Medicare — in the absence of pre-approval, we try to get the workers’ compensation insurance carrier to agree to cover the difference between the informal earmarked amount and a later amount Medicare may claim is due — is exhausted and properly accounted for, Medicare will not undertake its role as a secondary payor, i.e., begin making payments for work-related injuries. For example, if $53,000 (a number we used in a recent settlement) were earmarked for this purpose, Medicare would not make any payments until the entire $53,000 (plus interest, if applicable) were exhausted on the claimant’s medical care (for Medicare covered services only — meaning that any money expended for non-covered services does not count against the set-aside amount that must be exhausted before Medicare pays penny one.) See, July 23, 2001 Medicare memo.