The Remote Brief with Brendon: One Injury, Two Claim Types – How Many Medicare Set-Asides?
Written by: Brendon De Souza, Esq., MSPA
Question: “Brendon – I am on the verge of settling a workers’ compensation claim involving a Medicare beneficiary, but I’m a little lost on the Medicare Set-Aside issue because there was a recent and separate third-party liability settlement for the same Medicare beneficiary involving the exact same body parts / injuries as the workers’ compensation claim I am handling (the workers’ compensation and third-party liability claims arise out of the same incident). Under the terms of the finalized third-party liability settlement, a Medicare Set-Aside has been funded. Do I need to create a separate Medicare Set-Aside for the workers’ compensation claim? How would I report this to CMS? Would the carrier on the third-party liability settlement report their Medicare Set-Aside to CMS? Do I have to worry about Medicare conditional payment liens?”
Answer: The Centers for Medicare & Medicaid Services (CMS) published a Frequently Asked Questions Memorandum on April 22, 2003 confirming that a third-party liability carrier and workers’ compensation carrier may effectively share a single Medicare Set-Aside (MSA) in these “dual” claim-type scenarios. Even more so, if CMS’ $25,000 / $250,000 workload review thresholds are satisfied, that single MSA may also be submitted to CMS for review and approval if desired by the parties.
In this case, the workers’ compensation carrier is not obligated to fund a separate MSA for the workers’ compensation settlement given that an MSA for the same injuries has already been fully funded (prepared and priced according to the applicable state workers’ compensation fee schedule) by the third-party liability carrier under the terms of the liability settlement. Preparing an additional MSA involving the same injuries and treatment for the workers’ compensation settlement would be duplicative and an unnecessary overprotection of Medicare’s interests, not to mention a windfall to the Medicare beneficiary. I recommend that the workers’ compensation settlement language reference the existing MSA as confirmation that the parties adequately considered Medicare’s future interests with respect to the claimed injuries.
For Section 111 mandatory insurer reporting purposes, neither the workers’ compensation carrier nor the third-party liability carrier would report MSA information to CMS through Total Payment Obligation to Claimant (TPOC) reporting. The third-party liability carrier would be incapable of reporting the MSA information to CMS because the new April 4, 2025 MSA reporting fields are only available for workers’ compensation TPOCs, and the workers’ compensation carrier would not report the MSA information to CMS because it did not fund any part of the MSA as part of the workers’ compensation settlement. If CMS were to later audit the workers’ compensation carrier for having reported a $0.00 MSA value through its TPOC reporting, the workers’ compensation carrier may present CMS with evidence of the funded MSA on the third-party liability claim showing medical care for the same injuries which were released as part of the workers’ compensation settlement.
Lastly, the parties to the workers’ compensation settlement must still address Medicare conditional payment recovery interests. Even if Medicare conditional payments liens were identified and resolved as part of the third-party liability settlement, traditional and/or private Medicare may still have a recovery interest for medical expenses paid as part of the workers’ compensation claim. Failure to address potential workers’ compensation Medicare liens will result in “double-damage” exposure under 42 U.S.C. § 1395y(b)(2)(B)(iii) and/or 42 USC §1395(y)(b)(3)(A).
Sanderson Firm routinely assists our clients in navigating complex settlements similar to the circumstances described above. If you would like assistance regarding your settlements, have a question regarding this article, or have an idea for a future The Remote Brief with Brendon column, please email Brendon at brendon@sandersoncomp.com.
