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CMS published a new 88-page reference guide for Workers’ Compensation Medicare Set-Asides (WCMSAs). The publication’s purpose is to serve as a reference guide for claimants, attorneys, WCMSA consultants and others by consolidating information from previous CMS WCMSA Regional Office (RO) Memorandums and other information on the CMS website. For more comprehensive information, readers are requested to continue to refer to the WCMSA RO Memorandums.

The format of the guide (with version numbers, version history and paragraph numbers) is structured to make it expandable for future updates. This guide is in response to users requests for CMS to provide clearer guidance on the WCMSA program.

This guide was written to help litigants understand CMS’ Workers’ Compensation Medicare Set – Aside Arrangement (WCMSA) amount approval process and to serve as a reference for those electing to submit such proposals to CMS for approval. Submitters of arrangements may include injured workers themselves, their attorneys, Workers’ Compensation Medicare Set-Aside Arrangement agents or consultants, or claimants’ other appointed representatives. This guide reflects information compiled from all WCMSA Regional Office (RO) Memorandums issued by CMS, and from information provided on the CMS website.

A WCMSA allocates a portion of the WC settlement for all future work injury related medical expenses that are covered and otherwise reimbursable by Medicare. When a proposed WCMSA amount is submitted to CMS for review and the individual or beneficiary obtains CMS’approval, the CMS – approved WCMSA amount must be appropriately exhausted before Medicare will begin to pay for care related to the beneficiary’s settlement, judgment, award, or other payment.

The goal of establishing a WCMSA is to estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for work-related conditions during the course of the claimant’s life, and to set aside sufficient funds from the settlement, judgment, or award to cover that cost. WCMSAs may be funded by a lump sum or may be structured, such that a fixed amount of funds are provided each year for a fixed number of years.

Any claimant who receives a WC settlement, judgment, or award that includes an amount for future medical expenses must take Medicare’s interest with respect to future medicals into account.  If Medicare’s interests are not considered, CMS has a priority right of recovery against any entity that received a portion of a third party payment either directly or indirectly. Medicare may also refuse to pay for future medical expenses related to the WC injury until the entire settlement is exhausted. These arrangements are typically not created until the individual’s condition has stabilized so that it can be determined, based on past experience, what the future medical expenses may be.

Once the CMS-approved set-aside amount is exhausted and accurately accounted for to CMS, Medicare will pay primary for future Medicare-covered expenses related to the WC injury that exceed the approved set-aside amount.

To view the new WCMSA reference guide, click here.