Goldstein: How Medicare's Interests Should Be Considered in Certain Settlements

Wednesday, May 9, 2018 | 0

The Centers for Medicare & Medicaid Services, through various memorandums and guides, has clearly stated that “[w]hile there are no statutory or regulatory provisions requiring that a (workers’ compensation Medicare set-aside) proposal be submitted to CMS for review, submission of a WCMSA proposal is a recommended process.” 

Jean S. Goldstein

Of significant note, the word is "recommended," not "required." However, there are jurisdictions that have implemented a condition for approval of a workers’ compensation settlement: If one of CMS’ established work review thresholds are met, the WCMSA must be submitted to CMS.

Nebraska has been such a jurisdiction, for which the Nebraska Workers’ Compensation Court formally released “Guidelines for Medicare Set-Aside Arrangements in Lump Sum Settlements,” which explicitly requires that if one of the thresholds are met, CMS submission of a WCMSA is required. 

Recently, the Nebraska Legislature approved Legislative Bill 953, which intends to alleviate the requirement of CMS submission for WCMSAs that meet CMS’ workload review thresholds. The revised statute specifically requires that applications for an order approving a lump-sum settlement be submitted to the Nebraska Workers’ Compensation Court for approval.

However, as a result of the amended statute, if the agreement contains the following it can now be considered sufficient for approval:

• A concise statement of the terms of the settlement or agreement.
• A brief statement of the facts concerning the injury.
• The wages received by the injured employee.
• A description of the medical, surgical or hospital expenses incurred for treatment that will remain unpaid as part of the settlement if disputed and have been denied.
• A statement that the parties have considered the interests of Medicare and have taken reasonable steps to protect any interests of Medicare.

Most significantly, the statute further indicates that the Compensation Court will “conclusively presume that the parties’ agreement relating to consideration of Medicare’s interests set forth in such-lump settlement is in conformity with the compensation schedule and for the best interests of the employee or his or her dependents under all circumstances.”

Thus, the statute is essentially stating that whether the parties choose to submit to CMS or not, if the agreement contains the above statement regarding consideration of Medicare’s interests, and the employee’s attorney affirms that the agreement is in the best interests of the employee, the agreement should be deemed sufficient for approval. 

Interestingly, the standard of best interests is peppered throughout the new statute, and while the previous version of the statute also addressed this standard, it is the revised version that truly seems to take into consideration that which will benefit all parties.

The regulation is now stating that CMS submission is not required, even if one of the workload review thresholds for CMS submission are met. What remains to be seen is when the Workers’ Compensation Court issues revised “Guidelines for Medicare Set-Aside Arrangements in Lump Sum Settlements” to reflect the amended law. 

Nonetheless, LB 953 is a significant change, and we hope the Nebraska Workers’ Compensation Court will soon revise its guidelines and expectations for settlements of cases involving such settlements.

The decision to submit a WCMSA to CMS is one that must be based upon risk management decisions, as well as various circumstances, including unique medical and legal factors, and the inherent costs that are associated with the CMS review and submission process. Submitting a WCMSA can be quite expensive, not only in actual costs, but also due to unanticipated development delays.

Jean S. Goldstein is a CMS compliance manager and staff attorney for Medval. This blog post is republished with permission.