Tuesday, August 18, 2009

CMS Threshold to Review MSA Proposal

Posted by Matthew Garretson

I am close to settling a claim where the lump sum plus seed money for a proposed MSA plus the amount of the annuity payout under the MSA falls about $7,000 short of $250,000 and my client hasn't yet qualified for SSD though he has applied. Defendants have agreed to assume an additional risk on the MSA of up to $10,000. Defendants say that they don't have to submit this to CMS since it's below the $250,000 threshold and my client's not Medicare eligible. They're probably correct on that. However, I want it submitted. I don't want my client to assume the risk and have it suggested that we have a contingent settlement voidable at the option of either party. The problem is we won't be able to get CMS to consider it unless we get over the $250,000 threshold, or at least that's my experience. My question is this: can I add the $10,000 the defendants proposed on assuming the risk to the total to get it over $250,000 and would that cause CMS to consider it?

North Carolina Attorney

CMS Memos tell us that, in cases involving a claimant with a "reasonable expectation" of Medicare entitlement within 30 months of settlement, the gross settlement must be greater than or equal to $250,000 in order for CMS to review the MSA proposal. Computation of the gross settlement amount may include (but is not limited to) wages, attorneys' fees, all future medical expenses, and repayment of any Medicare conditional payments as well as any previously settled portion of the Workers' Compensation claim. This threshold is a workload review threshold, meaning CMS will not review the MSA proposal in this situation unless the gross settlement is greater than or equal to $250,000.

From the sounds of it, the MSA proposal itself is $7,000 short of the $250,000 threshold as opposed to the gross settlement. If that is the case, the gross settlement must exceed $250,000, meaning that the MSA proposal at $243,000 can be submitted to CMS for review and approval in its present state without having to have defendants assume an additional risk on the MSA, nor do you need a contingent settlement agreement voidable at the option of either party.

Hope this helps...

My best,
Matt Garretson