Change in CMS Low Dollar Threshold

Saturday, May 6, 2006 | 0

On April 25th, 2006, the Centers for Medicare & Medicaid Services (CMS) released a policy memorandum addressing the Low Dollar Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) Threshold for Medicare Beneficiaries (Class I Beneficiaries). This CMS policy memo replaces Question/Answer #2 of their July 11, 2005 memorandum. The memorandum states that CMS will now only review new WCMSA proposals for Medicare beneficiaries where the total settlement amount is greater than $25,000.00. CMS stressed that this is a CMS workload review threshold and not a substantive dollar, or "safe harbor" threshold. Also, Medicare beneficiaries must still consider Medicare's interests in all WC cases and ensure that Medicare is secondary to WC in such cases.

It should be noted that the computation of the total settlement amount includes, but is not limited to, wages, attorney fees, all future medical expenses (including prescription drugs) and repayment of any Medicare conditional payments. Payout totals for all annuities to fund the above expenses should be used, rather than cost or present values of any annuities. Also noted, is that any previously settled portion of the WC claim must be included in computing the total settlement amount.

Both the beneficiary, and non-beneficiary review thresholds are subject to adjustment. Claimants, employers, carriers and their representatives should regularly monitor the CMS website at www.cms.hhs.gov/WorkersCompAgencyServices for changes to these thresholds and for other changes in policies and procedures.

This change in Medicare policy reflects a positive and proactive acknowledgement of the increase in WCMSA values as a result of prescription drug inclusion. Other portions of the policy remain unchanged and particular attention should be paid to the 7/11/2005 FAQ with respect to work review thresholds (see G&L web site at www.gouldandlamb.com under the "Resources" tab).

Article republished with permission from Gould &Lamb - news@gouldandlamb.com or call 866-672-3453 ext.1343.

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