A Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) is a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease. These funds must be depleted before Medicare will pay for treatment related to the workers’ compensation injury, illness, or disease.
All parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving cases that include future medical expenses. The recommended method to protect Medicare’s interests is a WCMSA.
The purpose of this memorandum is to reiterate guidance provided in the Centers for Medicare & Medicaid Services’ (CMS’) July 23, 2001, July 11, 2005, and April 25, 2006 procedure memoranda regarding CMS’ Workers’ Compensation Medicare Set-aside Agreement (WCMSA) proposal review thresholds, which can be found on CMS’ Web site at: http://www.cms.gov/WorkersCompAgencyServices.
Submission of a WCMSA proposal to CMS for review and approval is a recommended process. There are no statutory or regulatory provisions requiring that a WCMSA proposal be submitted to CMS for review. However, if an entity chooses to use the WCMSA review process, CMS requests that it comply with the established policies and procedures referenced on its Web site. Claimants, employers, carriers, and their representatives should be encouraged regularly to monitor this dedicated workers’ compensation Web site for changes in policies and procedures.
There can be a delay between when a bill is filed for the work-related illness or injury and when the state workers' compensation insurance decides if they should pay the bill. Medicare can't pay for items or services that workers' compensation will pay for promptly (generally 120 days). Medicare may make a conditional payment if the workers' compensation insurer denies payment for your medical bills pending a review of your claim (generally 120 days or longer).
If the state workers' compensation insurance denies payment, and if you give Medicare proof that the claim was denied, then Medicare will pay for Medicare-covered items and services.
In some cases, workers' compensation insurance may not pay your entire bill. If you had an injury or illness before you started your job (called a " pre-existing condition"), and the job made it worse, workers' compensation insurance may agree to pay only a part of your bill because the job didn't cause the original problem. You and workers' compensation insurance may agree to share the cost of your bill. If Medicare covers the treatment for your pre-existing condition, then Medicare may pay its share for part of the doctor or hospital bills that workers' compensation doesn't cover.
If you have decided to self-administer your CMS-approved Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA), this Tool kit can help you manage your account appropriately and satisfy Medicare’s interests related to future medical care.