1. Medicare & Workers’ Compensation
Ian Fraser
Centers for Medicare & Medicaid Services (CMS)

2. What is a Workers Compensation Medicare Set Aside (WCMSA)?
A WCMSA is a financial agreement that allocates a portion of a workers compensation settlement to pay for future medical services related to the workers compensation injury, illness, or disease.
These funds must be depleted before Medicare will pay for treatment related to the workers compensation injury, illness or disease.

3. What does the Law require?
Medicare is required by statute (42 U.S.C. § 1395y(b)) to seek reimbursement for conditional payments related to the settlement. Further, Medicare is prohibited from making payment where payment has been made (that is, where the beneficiary obtains a settlement, judgment, award, or other payment). Medicare remains the secondary payer until the settlement proceeds are appropriately exhausted.
42 CFR requires that all WC settlements must adequately consider Medicare’s interests, and that, if a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized.

4. Are Medicare Set Asides required when settling a Workers Compensation Claim?
No. There are no statutory or regulatory provisions requiring that a WCMSA proposal be sent to CMS for review.
However, submission of a WCMSA proposal is a process recommended by CMS to ensure that the parties settling workers compensation claims are taking Medicare’s interest into account when settling.
In many situations, the parties to a WC settlement choose to pursue a CMS-approved WCMSA amount in order to establish certainty with respect to the amount that must be appropriately exhausted before Medicare begins to pay for care related to the WC settlement.

5. CMS Review of WCMSA is Recommended When:
Claimant is currently entitled to Medicare (Part A, Part B, or both) and the total settlement amount >$25,000
Claimant is reasonably expected to become entitled to Medicare within 30 months and the total settlement amount >$250,000
NOTE: these review thresholds are not intended to create a safe harbor. Parties should consider Medicare’s interest regardless of CMS review.

6. What will happen if I settle my case with a WCMSA but not obtain CMS approval?
If a WC settlement meets CMS’ workload-review thresholds, and the settling parties stipulate a WCMSA but do not receive CMS approval, then CMS is not bound by the set-aside amount stipulated by the parties, and it may refuse to pay for future medical expenses in the case, even if they would ordinarily have been covered by Medicare.
However, if CMS approves the WCMSA and the account is later appropriately exhausted, Medicare will pay related medical bills for services otherwise covered and reimbursable by Medicare regardless of the amount of care the beneficiary continues to require.

7. Denied or Disputed Liability
CMS will approve a “Zero ($0) Set-Aside) when:
Carrier has not made any indemnity or medical payments on the claim
Medical documentation demonstrates that no future treatment needed and settlement does not include money for future medicals
Court of competent jurisdiction has ruled on the merits of the case that carrier is not responsible for treatment related to the claim

8. Information Needed for a WCMSA Submission
Cover Letter
The cover letter is required with your WCMSA submission. It is used to present CMS with a high-level overview of all of the information that is included in the WCMSA proposal.
Consent to Release Form
Is the claimant’s signed authorization for CMS, its agents and/or contractors to discuss his or her case/medical condition with the parties identified on the authorization in regard to the WC settlement that includes a WCMSA.

9. Information Needed for a WCMSA Submission continued
Rated Age Information or Life Expectancy
Is a discount life insurance companies apply to structured settlement annuities when an annuitant has a reduced life expectancy. Each rated age must be on company letterhead for each insurance company (or companies) that made the rating and for each settlement broker that obtained them from the insurance company. All rated age sources shall be independent, in fact and appearance, of the submitter, carrier, and claimant.
Life Care/Future Treatment Plan
A Life Care Plan is document that provides a comprehensive assessment, data analysis, and research in an organized concise plan for current and future needs with associated costs for individuals who have experienced catastrophic injury or have chronic health needs. Current treatment should be supported by a minimum of two years or, if less, date back to the date of the work-related injury of medical documentation and a comprehensive payment history from the WC Carrier (including indemnity payments and any relevant past treatment, such as a surgery).

10. Information Needed for a WCMSA Submission continued
WCMSA Administration Agreement
The WCMSA can be administered either by the claimant (i.e., self-administered, if permitted under state law) or by a third-party trustee, such as a guardian or trust company. The settling parties should include that information in this section
Medical Records
Include the first report of injury, medical records of major surgeries, and medical records for the last two years or if less, date of injury, of treatment, no matter how long ago those last two years were or who paid for the services. Also include depositions from medical providers.

11. Information Needed for a WCMSA Submission continued
Payment History
Send an all-inclusive payment history (that is, medical, indemnity, and expenses) from all carriers, third party administrators (TPAs), employers, pharmacies, and prescription drug suppliers dated within the last six months of submission, showing all payments made (including payment date, payee, date of service, and amount) for at least the last two years of treatment.

12. WCMSA Funds
WCMSA funds can only be used to pay for medical care or prescriptions related to your workers’ compensation claim
You can use your WCMSA even if you're not yet enrolled in Medicare
You can only use the funds in your WCMSA to pay for items and services that would otherwise be covered by Medicare

13. Additional Use for WCMSA Account Funds
You can pay for these if directly related to the WCMSA account
Document copying charges
Mailing fees/postage
Any banking fees related to the account
Income tax on interest income from the set-aside account
You may not use the WCMSA account to pay for
Administrative fees
Expenses for administration of the WCMSA
Attorney costs for establishing the WCMSA
Medicare premiums, copayments, and deductibles

14. WCMSA Funding Lump-sum payment (easier to monitor)
Single payment intended to pay for all future medical expenses and disability benefits related to the WC claim
Medicare makes no payments for claim-related medical expenses until all WCMSA funds are exhausted
Structured settlement
Initial deposit to cover first surgical procedure or replacement and 2 years of annual payments
Subsequent annual deposits

15. Managing Your WCMSA Funds
Keep the following in mind when you manage your WCMSA
If you aren't sure what type of services Medicare covers, call Medicare before you use any of the money that was placed in your WCMSA
Keep records of your workers' compensation-related medical and prescription drug expenses, including what items and services you got and how much money you spent on your work-related injury, illness, or disease
Notify Medicare annually of the amount you spent from your WCMSA account and also when you have completely exhausted the WCMSA account

16. Managing Your WCMSA
Contact the Benefit Coordination & Recovery Center (BCRC) for
Questions about annual attestations
Annual accountings
To notify when all funds are spent
Contacting the Benefits Coordination & Recovery Center (BCRC) is always the first step in the process.
You can contact the BCRC several ways:
By telephone
Monday – Friday
8:00 am-8:00 pm, ET
TTY (TTY/TDD)
By mail
Benefits Coordination & Recovery Center
NGHP
P.O. Box
Oklahoma City, OK 73113
By Fax

17. Self-administration Resources
Self-Administration Toolkit to help people manage their WCMSA CMS.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview.html
CMS has developed a toolkit, the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements, to help people with the WCMSA process.
You can download a copy at CMS.gov/Medicare/Coordination-of-Benefits-and- Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA- Overview.html.

18. WCMSA Reference Guide
The WCMSA Reference Guide is a resource for attorneys, vendors and life care planners that submit WCMSA proposals to CMS
For an in-depth understanding of WCMSA documentation requirements and how CMS reviews WCMSA proposals visit CMS.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/May WCMSA-Reference-Guide-Version-22.pdf
The WCMSA Reference Guide is a resource for attorneys, vendors and life care planners that submit WCMSA proposals to CMS. If you would like an in-depth understanding of WCMSA documentation requirements and how CMS reviews WCMSA proposals please visit CMS.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/May WCMSA-Reference-Guide-Version-22.pdf.