Medicare's Unreasonable Assessment of Adequate Allocations for Drugs in Workers' Compensation Settlements in California
| Publication year | 2018 |
| Author | MARK L. RIGGENBACH, ESQ. |
MARK L. RIGGENBACH, ESQ.
Sacramento, California
I have been representing employers, insurers, and third-party administrators in workers' compensation cases for 15 years. In my experience, settlement of a case often brings a sense of relief. That sense might be short lived, however, if the injured worker is on or eligible for Medicare, since, as attorneys and claims professionals, we might want a Medicare Set-Aside (MSA) if our plan is to settle liability for future medical care.
Many stakeholders in workers' compensation settlements demand MSAs. A significant number believe it is required, and even more consider it a best practice since the MSA demonstrates an effort to consider Medicare's interests and avoid shifting the burden of future medical to Medicare, which federal law prohibits.
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Medicare is not and should not be responsible for any medical expense related to a workers' compensation claim that can reasonably be expected to be paid under a state or federal workers' compensation law. 42 CFR §411.40(b)(1)(i). Medicare, however, will cover medical expense if workers' compensation does not. 42 CFR §411.40(b)(2). And, of course, our clients always want to settle by Compromise and Release. Medicare allows an injured worker to settle liability for future medical care in a workers' compensation case. 42 CFR §411.46(a). If the settlement allocates an amount to cover future medical, Medicare will pay for medical care after the date of settlement only when the amount allocated has been exhausted. 42 CFR §411.46(d)(1), (2).
Medicare does not wish to pay for any services related to a work-related injury if it appears the parties intended to shift liability for future medical to Medicare. 42 CFR §411.46(b)(2). Medicare looks at this issue if bills are submitted to Medicare that appear to be for treatment for a work injury.
If there is no allocation in the settlement, Medicare may infer an allocation equal to the full amount of the settlement. Even if the work injury has necessitated an allocation of dollars to future medical and regardless of whether an MSA has justified the allocation, Medicare may deem that allocation inadequate and consider the entire settlement amount to be the allocation. Whether the allocation is the one in the settlement or a larger one Medicare has inferred, exhaustion of the allocation does not...
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