CMS Operating Rules

Posted by Sylvius Von Saucken

Question:
If a claimant is not a current Medicare beneficiary, is not expected to become a Medicare beneficiary within 30 months following the settlement, and the total settlement amount is less than $250,000, will Medicare still want to review the settlement?

-Ohio Attorney

Answer:
The CMS review thresholds provided by the Patel memorandum are not static. As CMS has told us in the past, the review thresholds are subject to adjustment and may be modified at any time. So, the answer depends on whether the claimant is expected to become a Medicare beneficiary within 120 days of the date that the Coordinator of Benefits Contractor receives settlement information. While prior CMS Memoranda imply that Medicare’s position is that they waive any interest in the settlement (see CMS Memos dated 7-23-01, 4-22-03, and 5-23-03), on 12/19/08, CMS posted “Operating Rules” on its website in an effort to share more information with the workers’ compensation industry and workers’ compensation MSA submitters. These Operating Rules, though partially redacted, provides further insight to the question.

With the Operating Rules as guidance, we note that “if the TSA (Total Settlement Amount) is between... $25,001 and $250,000, the case is eligible for review only if the claimant is entitled to Medicare according to the WCCCS (Workers’ Compensation Case Control System) before the PSD (Proposed Settlement Date).” Upon further review of the definition of PSD in section 3 of the Operating Rules, CMS defines it as the later of COBC receipt date plus 120 days or a certain redacted pricing date plus 3 months. So, if the claimant receives a letter from the COBC that falls within this time frame, the claimant would be eligible for Medicare before their defined PSD, this makes the settlement (and MSA) reviewable. In that case, then clearly, Medicare would not be foregoing any interest (if they are asking for review).

Note that this is a change to how CMS approval is determined for WCMSAs, but does not change the fact that an MSA evaluation is needed where due to settlement there is a permanent burden shift of future injury-related care over to Medicare.