What is it?
In a nutshell, the Medicare Secondary payer statute asserts Medicare’s position as a secondary payer, whenever a primary payer is responsible for the payment of health services. What that means to us as claims adjusters is that Medicare does not want to pay for your injured claimant’s injury and you will have to “set aside” funds in a separate account so that the injured worker can pay his own medical treatment after you settle the claim.
As adjusters, we’re accustomed to viewing claims from a technical perspective. We see these claims in terms of disability rating and reserve figures up until it’s time to settle. Once the key issues have been hashed over with the defense attorney, reality begins to sink in. The claim may not settle all that inexpensively. The injured worker is currently on Medicare and you will likely need to do a Medicare Set Aside Arrangement.
Sometimes we figure a claim may need a Medicare Set Aside Arrangement because we have a claim that rates out at a very high percentage of disability. The Centers for Medicare & Medicaid Services (CMS) has a different perspective about injury disability. CMS is interested in the monetary value of a claim. Your best indicator of potential Medicare compliance issues is clearly indicated by your claims benefits paid to date, primarily for the medical care but CMS also factors in temporary disability, permanent disability, attorney fees, lost wages paid, and previous stipulated settlement amounts.
Identifying the need for a MSA is the easy part. Figuring how to use the MSA report is a bit more of a challenge. Here are some thoughts:
- Use the report to accurately set reserves.
- Provide reality check to the claimant attorney if the settlement demand is not realistic.
- Identify the true need for specific medical treatment.
- Use the report to finalize a structured settlement deal.
- Most important, use the report to finalize a settlement.
So now you have a completed Medicare Set Aside Arrangement report in front of you, but before you can actually put it to work, it’s best you figure out some key aspects of the report and their implications.
Medicare Recovery Claim Identification – One of the more unpleasant surprises that can come along with the MSA process is the discovery that the injured worker has been receiving treatment for his work-related injury and Medicare has been footing the bill. The result is a potential Medicare lien which needs to be resolved outside the settlement agreement. Failure to resolve Medicare’s recovery claim may lead to litigation by the US Department of Treasury for double damages plus penalties.
Rated Age – When it comes time to settle a claim, it rarely feels like you are actually saving money. It seems that after all the negotiations; all you’ve done is spend. This is one of the few opportunities you have to save a little money. Once we receive your medical records, we immediately send a few select reports to your structured settlement broker who in turn sends them to a life insurance underwriter in order to calculate the injured workers medically rated age. Usually this means that the underwriter has shaved numerous years off of the claimant’s life due to his or her medical condition, including the non work injury. What that means to you as an adjuster, is that the period of future medical care has been diminished, resulting in reduced future medical costs.
Coaching you to effectively utilize and understand Medicare Set Aside allocations is our primary purpose. Supporting you in using the MSA to move you closer to settlement is equally important. We are committed to your success.