SURPRISING POLICY CHANGE IMMEDIATELY IMPACTING MEDICARE SET-ASIDE ACCOUNTS

On August 25, 2008, the Centers for Medicare & Medicaid Services ("CMS"), issued a Memorandum immediately rescinding a previous policy pertaining to claimants requesting termination of Workers' Compensation Medicare Set-Aside ("WCMSA") funds.

As you may recall, CMS had previously issued a Memorandum date July 11, 2005, establishing guidelines and allowing for requests for the reduction of WCMSAs. If the treating physician concluded that the beneficiary's medical condition had substantially improved, then the beneficiary (or the beneficiary's representative) may submit a new WCMSA proposal covering future expected medical expenses.

That policy has now been eliminated. Pursuant to the recent CMS Memorandum:

Effective immediately, the July 11, 2005 memorandum at Question and Answer 10, entitled "Beneficiaries that Request Termination of a WCMSA Account," is rescinded. Section 1862(b)(2) of the Social Security Act (the Act) (42 USC 1395y(b)(2)) requires that Medicare payment may not be made for any item or service to the extent that payment has been made under a workers' compensation (WC) law or plan. Medicare does not pay for an individual's WC related medical services when that individual received a WC settlement, judgment or award that includes funds for future medical expenses, until all such funds are properly expended.

The ramifications of this Memorandum is that CMS will no longer consider a reduction of the funds required to be "Set-Aside" to protect Medicare's interests, at least in Workers' Compensation cases, once the proposal has been submitted and a determination has been issued, even if the client's condition substantially improves and can be documented by medical records. The funds must remain in the WCMSA account as originally proposed. Time will tell if this policy will also be extended to "liability only" cases, but practitioners should be forewarned of same.

Now, more so than ever, it is critical that Plaintiff's counsel consider the timing of the submission of a WCMSA proposal, based upon not only a client's current medical condition, but also the future prognosis for improvements which may eliminate costly surgical procedures and/or cause the "weaning off" and discontinuance of prescription medications.

This information has been provided by Settlement Professionals, Inc.