Considering Medicare and TennCare

Before Settling Your Workers’ Compensation Medical Benefits

Duty to Protect Medicare and TennCare

Medical and TennCare do not want to pay for medical services when another party is responsible. Employees who receive money to pay to close their medical benefits are expected to pay for their medical treatment with the settlement rather than shifting this cost to Medicare or TennCare.

Federal law requires injured workers, employers, and insurance companies to make appropriate plans to cover all workers compensation medical costs so that Medicare or TennCare do not pay for treatment or medication related to a workers compensation claim.

Authorization

Medicare or TennCare may agree to pay for your work injury if:

  1. You have a Workers’ Compensation Medicare Set-Aside Arrangement (WCSMA) that was approved by the Center for Medicare Services (CMS); and
  2. The CMS rules regarding managing a WCMSA appropriately are followed; and
  3. The WCMSA runs out of money.

What is a WCMSA?

A Workers’ Compensation Medicare Set-Aside Arrangement is a type of settlement where an employer pays an injured worker an appropriate amount of money to close their lifetime medical benefits.

An injured workers then puts the money into an independent account to pay for their medical care.

Follow the Rules:

Navigating the rules from CMS and Medicare is very important. There are two options to help you stay compliant:

  1. CMS Guidebook: injured workers can use this resource and follow the recommended steps to comply with the difficult regulations.
  2. Professional Administration: a WCMSA company can help make sure all the rules are followed. Many insurance companies are willing to pay for this service. They may offer this option during negotiations to close lifetime medical benefits.

Violations

If the rules are not followed, Medicare may not agree to cover your bills when the fund runs out of money, even if the CMS approved the WCMSA.

If you use Medicare, TennCare Medicare Advantage, or Medicare prescription drug plans for treatment of your work injury without permission, they can:

  • Seek Repayment: They may stop paying for medical care until your workers compensation settlement is paid to them. This includes disability benefits, not just the amount of money paid to close medicals,
  • Suspend All Benefits: Medicare or TennCare may stop providing any benefits including those for medical care not related to your work injury; and
  • Charge a Penalty: They may sue you for two times everything they paid plus interest.

CMS Approval

The Center for Medicare Services (CMS) will review a WCMSA if the agreement meets their requirements:

  • The injured worker must be on Medicare and the total settlement amount must be greater than $25,000, o
  • The injured worker must have a reasonable expectation to be on Medicare within 30 months of the settlement and the settlement amount must be greater than $250,000.00.

Steps for Approval

There are four steps to obtain approval from CMS.

  1.  Employer hires an expert to estimate future medical costs.
  2. Parties use the estimate and agree to close medicals benefits.
  3. Employer submits the agreement to CMS.
  4. Parties finalize the agreement after CMS approves it.

CMS Approval Is Not Required:

Injured workers are allowed to close their lifetime medical benefits without CMS approval. If your claim does not meet the CMS criteria, there are other options to close medical benefits. Such options include:

  • Hiring medical and legal experts to look at the claim and provide an estimate of the expected future costs and avoid using Medicare or TennCare to treat the work injury, or
  • Doing the same as above and adding an insurance plan that pays if the fund is not sufficient to cover the expected costs, or
  • Obtaining a statement from the treating physician confirming the work injury has resolved and no future medical care is needed.

Medicare will only cover costs that exceed the WCMSA if CMS approves the WCMSA. Injured workers who don’t qualify for CMS review will not have CMS protections.

CMS Reporting

CMS mandates Section 111 reporting of WCMSA data, including those with zero-dollar allocations, for all settlements involving Medicare beneficiaries. Reporting is required, even if approval is not.

More Information

Obtain more information by contacting: