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.
The most effective way of assuring that Medicare steps in once the earmarked money is exhausted is by having the pre-determined amount deposited in an account, known as a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA), and administered by a professional. We recommend Ametros. The administrator should:
- Deposit the fund into an interest-bearing account
- Use the fund only for treatments related to the injury
- Use the fund only for Medicare covered expenses
- Pay according to the appropriate fee schedule
- Prepare and submit annual accounting report to CMS
- Maintain line item detail for the duration of eligibility
OTHER WCMSA ISSUES
Some workers’ compensation claimants may be eligible for health insurance benefits (e.g., group plan, Obamacare, managed care, Veterans Administration) when the workers’ compensation case is settled. Even still, a WCMSA is recommended. Not only could the health insurance or health services be canceled or reduced, some health insurance carriers take the same position as Medicare and require exhaustion of earmarked benefits before providing coverage.
(Ref: 4/21/03 Memo Q21) Death of a Claimant Prior to Exhaustion of the Medicare Set-Aside Money
Once the Regional Office (RO) and the contractor responsible for monitoring the claimant’s case verify that all of the claimant’s claims have been paid, then any amount left over in the claimant’s WCMSA may be disbursed pursuant to State probate law. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period ranging from 15-27 months after the date of service.
(Ref: 4/21/03 Memo Q16) WC Claims not Covered in the Settlement
Not infrequently, some past incurred medical expenses may go unpaid by the workers’ compensation insurance company. Because the WCMSA is created solely for future medical expenses, these unpaid bills cannot be paid from this account. If Medicare has paid accident-related medical bills before to the workers’ compensation settlement, they must be repaid once the case is settled pursuant to 42 CFR 411.47.
(Ref: 7/11/05 Memo Q9) Loss of Medicare Entitlement After CMS Approval of a WCMSA
Losing Medicare entitlement does not eliminate the need to continue administering the workers’ compensation funds through the WCMSA. If Medicare is reinstated, the agency will require the WCMSA accounting as if entitlement had never ended.
(Ref: 7/11/05 Memo Q13) Effect of WCMSA on Medicaid Eligibility
Medicaid Social Security Income (SSI) is a need-based benefit. Individuals whose cash and other assets convertible to cash exceed a certain level are not eligible for SSI. WCMSA funds are not exempt from the SSI/Medicaid resource definition unless placed into trusts that satisfy the definition of “special needs trusts” under Section 1917 of the Social Security Act.
The issues touched on here can be critically important to an individual’s health and welfare. They should not be taken lightly. The workers’ compensation claimant should consult with an experienced workers’ compensation claimant’s attorney before making any binding consequential decisions.
Contact us at 305-758-4900 or by email to learn your legal rights.
Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.
While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.