A workers’ compensation settlement may not address all questions about medical care needed after the settlement. Federal rules can require money from a settlement to be reserved for medical treatment that Medicare might otherwise cover. This requirement can affect people who already receive Medicare and some who may become eligible in the near future. Understanding these rules can help prevent settlement delays and reduce problems with future Medicare coverage.
How does Medicare set aside work?
Some workers’ compensation settlements include money for medical treatment that may be needed later because of a work injury. A Medicare set-aside keeps that portion separate from the rest of the settlement. The reserved amount pays for eligible injury-related treatment before Medicare covers those expenses. Once the set-aside funds are exhausted, Medicare may cover eligible medical treatment arising from the injury.
When does Medicare require a set aside?
A workers’ compensation settlement may require funds to be set aside arising from the work-related condition. This requirement helps prevent Medicare from paying for treatment that the settlement is expected to cover. Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicare and Medicaid, uses specific dollar limits to decide when it may review a proposed arrangement. A claimant who is already enrolled in Medicare may fall under CMS review requirements when the settlement exceeds $25,000. Different rules may apply when Medicare eligibility is likely to begin before 30 months have passed and the settlement exceeds $250,000. The claimant’s age, disability status, and injury may also affect whether a set-aside is required.
How does a set aside affect the settlement?
A Medicare set aside lowers the amount of settlement money available right away. A life care planner or medical cost analyst reviews future care costs and calculates the amount to reserve. This review may take extra time.
The main effects include:
- Reserved funds: Part of the settlement pays for future care from the work injury.
- Medicare limits: Medicare may not cover that care until the reserved funds run out.
- Unrelated care: This limit does not apply to care for conditions unrelated to the work injury.
Settling these issues before the settlement is final can help prevent coverage problems.
Working with an attorney on Medicare set-aside requirements
Medicare set-aside requirements depend on federal law, state workers’ compensation laws and the facts of each case. Addressing these issues before a settlement is final can help avoid delays and allow time to set up the arrangement. A workers’ compensation attorney can review the case under current CMS guidelines and help protect the claimant’s settlement and future Medicare eligibility.