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Workers’ Compensation Workers’ Compensation Medicare Set-aside Medicare Set-aside

Arrangements Arrangements (WCMSAs)(WCMSAs)

Workers’ Compensation Workers’ Compensation Medicare Set-aside Medicare Set-aside

Arrangements Arrangements (WCMSAs)(WCMSAs)

Centers for Medicare & Medicaid Centers for Medicare & Medicaid ServicesServices

Centers for Medicare & Medicaid Centers for Medicare & Medicaid ServicesServices

As of 9/16/05As of 9/16/05

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WCMSAs

(Amount/Proposal)

Statutes and Authority

Future Medical Requirements

Submission Process

Final Settlement Agreement

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The Statute Addressing The Statute Addressing Workers’ Compensation Workers’ Compensation

and Medicareand Medicare

The Statute Addressing The Statute Addressing Workers’ Compensation Workers’ Compensation

and Medicareand Medicare

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Medicare's Authority to Review Medicare's Authority to Review WC CasesWC Cases

Medicare's Authority to Review Medicare's Authority to Review WC CasesWC Cases

Section 1862(b)(2) of the Social Security Act at 42 USC Section 1862(b)(2) of the Social Security Act at 42 USC 1395y(b)(2) precludes Medicare from paying a beneficiary’s 1395y(b)(2) precludes Medicare from paying a beneficiary’s medical expenses when payment has been made or can be medical expenses when payment has been made or can be reasonably expected to be made under a workers’ reasonably expected to be made under a workers’ compensation plan.compensation plan.

Section 1862(b)(5)(D) and (b)(6) of the Social Security Act Section 1862(b)(5)(D) and (b)(6) of the Social Security Act at 42 USC 1395y(b)(2) require that CMS and its providers at 42 USC 1395y(b)(2) require that CMS and its providers and suppliers ask beneficiaries about payers that may be and suppliers ask beneficiaries about payers that may be primary to Medicare.primary to Medicare.

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Compromise vs. CommutationCompromise vs. CommutationCompromise vs. CommutationCompromise vs. Commutation CompromiseCompromise WC compromise cases areWC compromise cases aresettlement awards for ansettlement awards for anindividual’s current or pastindividual’s current or pastmedical expenses that weremedical expenses that wereincurred prior to the dateincurred prior to the dateof settlement because of aof settlement because of awork-related injury orwork-related injury ordisease.disease.

Commutation Commutation WC commutation cases areWC commutation cases aresettlement awards or agreements settlement awards or agreements that intend to compensate anthat intend to compensate anindividual for future medical individual for future medical expenses required because of aexpenses required because of awork-related injury or disease.work-related injury or disease.Therefore, settlement awards orTherefore, settlement awards oragreements that intend toagreements that intend tocompensate an individual for anycompensate an individual for anymedical expenses after the date ofmedical expenses after the date ofsettlement are commutation cases.settlement are commutation cases.

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Combined SettlementCombined Settlement

A single WC settlement agreement can possess both A single WC settlement agreement can possess both WC compromise and commutation aspects.WC compromise and commutation aspects.

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WCMSAsWCMSAsWCMSAsWCMSAs

Apply strictly to WC settlements that involve a Apply strictly to WC settlements that involve a commutationcommutation aspect (i.e., those settlements aspect (i.e., those settlements intended to award the Claimant for future intended to award the Claimant for future medical benefits and/or release the WC carrier medical benefits and/or release the WC carrier from future responsibility for medical benefits).from future responsibility for medical benefits).

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WCMSAs Con’tWCMSAs Con’t

Decisions regarding WCMSAs are independent Decisions regarding WCMSAs are independent of any decision regarding any claims that of any decision regarding any claims that Medicare may have paid in the past.Medicare may have paid in the past.

Any identified claims for past injury-related Any identified claims for past injury-related services (i.e., conditional payments) must be services (i.e., conditional payments) must be reimbursed to the Medicare Trust Fund.reimbursed to the Medicare Trust Fund.

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WCMSA Review ThresholdsWCMSA Review ThresholdsWCMSA Review ThresholdsWCMSA Review Thresholds

Claimants who are entitled Claimants who are entitled to Medicare (Part A, B, or to Medicare (Part A, B, or both) when the total both) when the total settlement amount is settlement amount is $10,000 or greater$10,000 or greater;;

Claimants with a Claimants with a “reasonable expectation” “reasonable expectation” of Medicare enrollment of Medicare enrollment within 30 months of the within 30 months of the settlement date settlement date ANDAND a a total settlement of total settlement of greater greater than $250,000.00.than $250,000.00.

ANDAND

A WCMSA is reviewed by CMS in the following two A WCMSA is reviewed by CMS in the following two situations:situations:

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Reasons include but are not limited to:Reasons include but are not limited to:

The Claimant has applied for Social Security Disability The Claimant has applied for Social Security Disability Benefits;Benefits;

The Claimant has been denied Social Security Disability The Claimant has been denied Social Security Disability Benefits; anticipates appealing and/or re-filing for Social Benefits; anticipates appealing and/or re-filing for Social Security Disability Benefits; Security Disability Benefits;

The Claimant is 62 years and 6 months old; orThe Claimant is 62 years and 6 months old; or

The Claimant has an ESRD condition but does not yet The Claimant has an ESRD condition but does not yet qualify for Medicare based upon ESRD. qualify for Medicare based upon ESRD.

What is Reasonable Expectation?What is Reasonable Expectation?

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As a General RuleAs a General RuleAs a General RuleAs a General Rule

If the Claimant is less than 65 years old, and has been If the Claimant is less than 65 years old, and has been receiving Social Security Disability benefits for receiving Social Security Disability benefits for 2 years or 2 years or moremore, they would usually be entitled to Medicare., they would usually be entitled to Medicare.

If the Claimant is 65 years or older, they are usually entitled If the Claimant is 65 years or older, they are usually entitled to Medicare.to Medicare.

If the Claimant has End-Stage Renal Disease (ESRD), they If the Claimant has End-Stage Renal Disease (ESRD), they are usually eligible for or entitled to Medicare.are usually eligible for or entitled to Medicare.

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For the status of a claimant’s Medicare entitlement, contact the Social Security

Administration:

1-800-772-12131-800-772-12131-800-772-12131-800-772-1213

http://www.ssa.gov/http://www.ssa.gov/

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Low Dollar Threshold for Low Dollar Threshold for Medicare BeneficiariesMedicare Beneficiaries

Effective July 11, 2005, Medicare no longer Effective July 11, 2005, Medicare no longer reviews WCMSAs when the claimant is a reviews WCMSAs when the claimant is a Medicare beneficiary and the total settlement Medicare beneficiary and the total settlement amount is amount is less thanless than $10,000. $10,000.

NOTE:NOTE: This is a workload review threshold This is a workload review threshold and NOT a substantive dollar or “safe and NOT a substantive dollar or “safe harbor” threshold.harbor” threshold.

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Low Dollar Threshold for Low Dollar Threshold for Medicare Beneficiaries Con’tMedicare Beneficiaries Con’t

Regardless of the low dollar threshold, Medicare beneficiaries Regardless of the low dollar threshold, Medicare beneficiaries should always consider Medicare’s interest in all WC cases and should always consider Medicare’s interest in all WC cases and ensure that Medicare is secondary to WC.ensure that Medicare is secondary to WC.

NOTE: For current CMS policies and procedures related to NOTE: For current CMS policies and procedures related to WCMSAs, claimants, employers, carriers, and their WCMSAs, claimants, employers, carriers, and their

representatives should regularly monitor the CMS website at: representatives should regularly monitor the CMS website at:

http://www.cms.hhs.gov/medicare/cob/attorneys/att_wc.asphttp://www.cms.hhs.gov/medicare/cob/attorneys/att_wc.asp

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Computing the Total Settlement Computing the Total Settlement Amount (TSA)Amount (TSA)

The computation of the total settlement amount includes, but The computation of the total settlement amount includes, but is not limited to, wages, attorney fees, all future medical is not limited to, wages, attorney fees, all future medical expenses, and repayment of any Medicare conditional expenses, and repayment of any Medicare conditional payments. Payout totals for all annuities to fund the above payments. Payout totals for all annuities to fund the above expenses must be used rather than cost or present values of expenses must be used rather than cost or present values of any annuities.any annuities.

Also note that any previously settled portion of the WC claim Also note that any previously settled portion of the WC claim must be included in computing the total settlement amount. must be included in computing the total settlement amount.

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WCMSA Proposal RequirementsWCMSA Proposal Requirements WCMSA Proposal RequirementsWCMSA Proposal Requirements

A Cover LetterA Cover Letter Consent FormConsent Form Rated Age or Life Expectancy Information and DocumentationRated Age or Life Expectancy Information and Documentation Life Care PlanLife Care Plan Medical RecordsMedical Records Settlement Agreement or Proposed Court OrderSettlement Agreement or Proposed Court Order Set-Aside AdministratorSet-Aside Administrator Payment HistoryPayment History Current TreatmentCurrent Treatment Future Treatment and Amount of Future Medical TreatmentFuture Treatment and Amount of Future Medical Treatment Patient Medical Recovery PrognosisPatient Medical Recovery Prognosis

Documents to be Submitted for a WCMSA:Documents to be Submitted for a WCMSA:

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Cover LetterCover Letter Claimant Information:Claimant Information:

NameName AddressAddress Phone & Fax NumbersPhone & Fax Numbers HICN or SSNHICN or SSN GenderGender Date of BirthDate of Birth Entitlement Entitlement

InformationInformation

Age at Proposed Age at Proposed Settlement Date (PSD)Settlement Date (PSD)

Rated Age if ApplicableRated Age if Applicable Life ExpectancyLife Expectancy Description of InjuryDescription of Injury Date of InjuryDate of Injury ICD-9 Diagnosis Codes/ ICD-9 Diagnosis Codes/

DescriptionsDescriptions Annuity Starting DateAnnuity Starting Date

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Cover Letter Con’tCover Letter Con’t

Length of AnnuityLength of Annuity WCMSA WCMSA

Administrator/AgreementAdministrator/Agreement Claimant AttorneyClaimant Attorney Claimant EmployerClaimant Employer WC Insurance CarrierWC Insurance Carrier State of State of

Jurisdiction/VenueJurisdiction/Venue

Total WC Settlement Total WC Settlement AmountAmount

Type of SettlementType of Settlement Proposed WCMSAProposed WCMSA Annual Payout Amount of Annual Payout Amount of

AnnuityAnnuity WC Fee Schedule or Full WC Fee Schedule or Full

Actual ChargesActual Charges

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WCMSA Sample SubmissionWCMSA Sample Submission It is important to include as much information as It is important to include as much information as possible in the submitter letter rather than simply referringpossible in the submitter letter rather than simply referringto the attachments so the proposal can be reviewed more quickly.to the attachments so the proposal can be reviewed more quickly.

Sample submission can be found at Sample submission can be found at http://www.cms.hhs.gov/medicare/cob/pdf/attwc_sample.pdfhttp://www.cms.hhs.gov/medicare/cob/pdf/attwc_sample.pdf

NOTE:NOTE: The sample submission is intended to be used as a The sample submission is intended to be used as a sample. Each state has unique forms. The intent of the samplesample. Each state has unique forms. The intent of the sampledocument is to aid submitters in organizing the informationdocument is to aid submitters in organizing the informationthat is typically sent to CMS with their WCMSA proposals.that is typically sent to CMS with their WCMSA proposals.It is not the intent in any way for the sample document to It is not the intent in any way for the sample document to make or change policy. make or change policy.

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Submissions using CD-ROMsSubmissions using CD-ROMs

Must be in PDF format.Must be in PDF format. Must be in the same order as the requirement checklist.Must be in the same order as the requirement checklist. All documents on the CD-ROM must be identified on the index.All documents on the CD-ROM must be identified on the index. Medical records must be submitted in a logical order.Medical records must be submitted in a logical order.

PDF Format

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WCMSA BasicsWCMSA BasicsWCMSA BasicsWCMSA Basics

WCMSA funds should be sufficient to last the remainder of the WCMSA funds should be sufficient to last the remainder of the claimant’s estimated life expectancy (unless documented claimant’s estimated life expectancy (unless documented otherwise).otherwise).

WCMSA funds may WCMSA funds may ONLYONLY be used to pay for injury-related be used to pay for injury-related services that would otherwise be covered by Medicare.services that would otherwise be covered by Medicare.

A WCMSA is used for doctor visits, monitoring, blood tests, x-A WCMSA is used for doctor visits, monitoring, blood tests, x-rays, etc., whenever applicable.rays, etc., whenever applicable.

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Proposed Settlement Date (“PSD”)Proposed Settlement Date (“PSD”)

If the case has already settled, please provide the If the case has already settled, please provide the settlement date.settlement date.

If there is a proposed settlement date in the future, please If there is a proposed settlement date in the future, please provide that date.provide that date.

If the settlement date is unknown, CMS will default to four If the settlement date is unknown, CMS will default to four months from the date of submission for the PSD.months from the date of submission for the PSD.

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Life ExpectancyLife Expectancy

Evaluates the claimant’s condition as it relates to life span Evaluates the claimant’s condition as it relates to life span or State law limiting time span that covers WC work related or State law limiting time span that covers WC work related conditions.conditions.

Life Expectancy is computed using the Center for Disease Life Expectancy is computed using the Center for Disease Control (CDC) Tables 2 & 3. On July 1Control (CDC) Tables 2 & 3. On July 1stst of each year, the of each year, the updated tables for the following year should be used. (These updated tables for the following year should be used. (These tables are 2 ½ years behind the current year.)tables are 2 ½ years behind the current year.) Example:Example: 7/1/05 use 2002 CDC Tables7/1/05 use 2002 CDC Tables

7/1/06 use 2003 CDC Tables7/1/06 use 2003 CDC Tables

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Rated AgeRated Age When submitting one or more rated ages with a request for When submitting one or more rated ages with a request for

CMS approval of a WCMSA, the following criteria must CMS approval of a WCMSA, the following criteria must be met in order for the rated age to be considered in be met in order for the rated age to be considered in reviewing the case:reviewing the case: All rated ages shall be on insurance company or All rated ages shall be on insurance company or

settlement broker letterhead.settlement broker letterhead. All rated ages shall be accompanied by a written All rated ages shall be accompanied by a written

justification on how such age was determined.justification on how such age was determined.

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Rated Age Con’tRated Age Con’t All rated age sources shall be independent, in fact and All rated age sources shall be independent, in fact and

appearance, of the submitter, carrier, and claimant. appearance, of the submitter, carrier, and claimant.  Any documents on rated ages that contain redacted data will Any documents on rated ages that contain redacted data will

not be considered.not be considered.

If more than one rated age is submitted, CMS will use the If more than one rated age is submitted, CMS will use the median of all rated ages submitted.median of all rated ages submitted.

The median is the value at the center of an ordered range of The median is the value at the center of an ordered range of numbers. For life expectancy purposes, if there is an even numbers. For life expectancy purposes, if there is an even number of values, the median is the average of the two number of values, the median is the average of the two middle values, but without rounding.middle values, but without rounding.

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Common Medicare-Covered ServicesCommon Medicare-Covered ServicesCommon Medicare-Covered ServicesCommon Medicare-Covered Services

Doctor’s visitsDoctor’s visits Diagnostic testsDiagnostic tests Steroid injectionsSteroid injections HospitalizationsHospitalizations SurgerySurgery Morphine pumpsMorphine pumps TENS UnitsTENS Units Physical TherapyPhysical Therapy

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Common Services NOT currently Common Services NOT currently covered by Medicarecovered by Medicare

Common Services NOT currently Common Services NOT currently covered by Medicarecovered by Medicare

DenturesDentures GlassesGlasses Hearing aidsHearing aids Travel Expenses to medical appointmentsTravel Expenses to medical appointments Custodial CareCustodial Care

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Prescription DrugsPrescription Drugs Pursuant to the Medicare Prescription Drug, Improvement, Pursuant to the Medicare Prescription Drug, Improvement,

and Modernization Act of 2003 (MMA), prescription drug and Modernization Act of 2003 (MMA), prescription drug coverage under Medicare will be available starting on coverage under Medicare will be available starting on January 1, 2006.January 1, 2006.

In July 2005, CMS issued guidance to Part D sponsors on In July 2005, CMS issued guidance to Part D sponsors on CMS requirements and procedures for coordination of CMS requirements and procedures for coordination of benefits related to Medicare’s Part D prescription drug benefits related to Medicare’s Part D prescription drug coverage. coverage.

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Prescription Drugs Con’tPrescription Drugs Con’t The CMS is currently developing policy based on that The CMS is currently developing policy based on that

guidance which addresses the inclusion of Part D guidance which addresses the inclusion of Part D prescription drugs in a WCMSA as part of a WC prescription drugs in a WCMSA as part of a WC settlement.settlement.

Policy will be presented in September 2005 on the CMS Policy will be presented in September 2005 on the CMS Coordination of Benefits website at: Coordination of Benefits website at: http://www.cms.hhs.gov/medicare/cob/http://www.cms.hhs.gov/medicare/cob/

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For specific Medicare coverage questions, For specific Medicare coverage questions, please visit our web site at: please visit our web site at:

http://http://www.medicare.govwww.medicare.gov or call:or call:

1-800-MEDICARE 1-800-MEDICARE (1-800-633-4227) (1-800-633-4227)

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How You Can Improve the WCMSA How You Can Improve the WCMSA Proposal ProcessProposal Process

How You Can Improve the WCMSA How You Can Improve the WCMSA Proposal ProcessProposal Process

Submit complete case files with your set-aside proposals Submit complete case files with your set-aside proposals utilizing the Medicare Set-Aside Proposal Requirements utilizing the Medicare Set-Aside Proposal Requirements Checklist and/or Sample Submission.Checklist and/or Sample Submission.

Respond to letters and telephone requests for information Respond to letters and telephone requests for information in a timely manner. in a timely manner.

Limit status calls to offices unless 45 days have elapsed Limit status calls to offices unless 45 days have elapsed from date of submission of a complete file.from date of submission of a complete file.

Try not to schedule a hearing date prior to receiving Try not to schedule a hearing date prior to receiving approval of your set-aside proposal.approval of your set-aside proposal.

Share the proceduresShare the procedures in this presentation with yourin this presentation with your colleagues.colleagues.

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First Report of WC Case Should First Report of WC Case Should Be Made ToBe Made To

First Report of WC Case Should First Report of WC Case Should Be Made ToBe Made To

The The Coordination of Benefits ContractorCoordination of Benefits Contractor (COBC) (COBC) at the following address:at the following address:

Only past medicalsOnly past medicals

Medicare - Coordination of Benefits ContractorMedicare - Coordination of Benefits ContractorMSP Claims Investigation ProjectMSP Claims Investigation ProjectP.O. Box 5041P.O. Box 5041New York, NY 10274New York, NY 10274--50415041 -or--or-1-800-999-11181-800-999-1118

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Address for Submission of WCMSA Address for Submission of WCMSA Proposals for CMS ReviewProposals for CMS Review

All WCMSA proposals submitted for review must be sent to a national, centralized point of receipt at:

CMS CMS c/o Coordination of Benefits Contractorc/o Coordination of Benefits ContractorPO Box 660PO Box 660New York, New York 10274-0660New York, New York 10274-0660

Attention: WCMSA ProposalAttention: WCMSA Proposal

WCMSAWCMSA

U.S. Postal Only

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P.O. Box 5041 v. Box 660P.O. Box 5041 v. Box 660

50415041 Past medicalsPast medicals Beginning of settlement Beginning of settlement

processprocess Intermediary /carrier Intermediary /carrier

involvedinvolved Conditional paymentsConditional payments

660660 Future medicalsFuture medicals End of settlement processEnd of settlement process Workers’ Compensation Workers’ Compensation

Review Contractor Review Contractor (WCRC) involved(WCRC) involved

Set-asides (future Set-asides (future services)services)

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Useful Website AddressesUseful Website Addresses

The CMS:The CMS: http://www.cms.hhs.gov/medicare/http://www.cms.hhs.gov/medicare/

COBC:COBC: http://www.cms.hhs.gov/medicare/cob/http://www.cms.hhs.gov/medicare/cob/

Workers’ Comp:Workers’ Comp: http://www.cms.hhs.gov/medicare/cob/attorneys/http://www.cms.hhs.gov/medicare/cob/attorneys/

att_wc.aspatt_wc.asp

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Questions ?Questions ?