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When Does the Reasonable Expectation of Medicare Benefits Begin? When Does the Reasonable Expectation of Medicare Benefits Begin?

When Does the Reasonable Expectation of Medicare Benefits Begin?

Parties to worker’s compensation settlements are required by federal law to consider Medicare’s potential interests. The Center for Medicare & Medicaid Services (CMS) is interested in ensuring that Medicare pays secondary to compensable worker’s compensation cases. Therefore, it is good practice to include an explanation of how the parties have considered Medicare’s past and future interests in each settlement agreement.  

Even if the employee/claimant is not currently a Medicare beneficiary at the time of settlement, Medicare may have an interest related to future medical care needs if there is a reasonable expectation the claimant will be enrolled in Medicare within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability over the duration of the settlement agreement is expected to be greater than $250,000 (current CMS review threshold for non-Medicare beneficiaries). Historically, parties to worker’s compensation settlements considered the claimant’s reasonable expectation of Medicare enrollment to begin with the receipt of Social Security Disability Benefits (SSDB). This conclusion may need to be adjusted.  

CMS recently clarified that it believes its interests begin earlier than receipt of SSDB. According to the current CMS Workers’ Compensation Medicare Set-Aside Agreement (CMSMSA) Reference Guide (version 3.5, published January 10, 2022), the claimant does not need to be on SSDB at the time of settlement to trigger an expectation of Medicare enrollment. Rather, the Guide lists an application for SSDB or the appeal, or anticipated appeal, of a denial of that application as sufficient events to trigger Medicare’s anticipated expectation (see § 8.1 CMSMSA Reference Guide, version 3.5). Therefore, if a worker’s compensation claim settlement has the impact of resolving future medical care issues, the parties may need to include additional language in the agreement describing how the parties have considered Medicare’s potential or anticipated interests in the settlement.    

Claimants must consider Medicare’s potential interests in all worker’s compensation cases regardless of the review thresholds. Note that the review thresholds are subject to adjustment and CMS reserves the right to change or remove these thresholds based on Medicare’s interests. We recommend parties regularly monitor the CMS website for updates or seek advice regarding the current requirements before finalizing worker’s compensation settlements.

For more information about worker's compensation or Medicare requirements, contact Ann H. Stewart.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
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