Question: We recently learned that an injured worker is using an American citizen’s Social Security number, and that American citizen is a Medicare beneficiary. The worker using that Social Security number is technically undocumented, however, and is 64 years old. What do I need to do in my settlement to remain in compliance with the Medicare Secondary Payer Act?
At the risk of criticism for addressing this question in today’s current political climate, I chose this question because it comes up often and the answer is not always straightforward.
The question begins with the premise that an injured worker is using someone else’s, valid Social Security number (SSN) for their own employment purposes. This also means the injured worker is paying taxes under that American citizen’s Social Security number, including Medicare taxes. While the injured worker will never really become a Medicare beneficiary under this Social Security number, the first and main concern is whether the undocumented worker used the American citizen’s Medicare entitlement to receive medical care. If so, these payments would be considered “conditional payments” and should be addressed.
Practically, however, there are a couple of concerns in addressing conditional payments made using else’s Medicare card. First, if the injured worker is not using the same exact name or date of birth as the true Medicare beneficiary, it may be very difficult to report the case using Section 111. If either of these data elements is not a match, CMS will reject the Section 111 report. Second, any authorization signed by the beneficiary is not technically valid for that conditional payment case since it is not being signed by the Medicare beneficiary themselves, but instead the individual illegitimately using that number. Accordingly, CMS could refuse to allow case access. In such a case, we recommend you do your best to report the claim using the Social Security number the injured worker provided, and if the entry is rejected due to a lack of a complete match, the BCRC be contacted by phone in an attempt to rectify the issue. Settlement language should also clearly place the burden of conditional payment reimbursement on the injured worker.
The next question is whether the employer/insurer has any duty to address future medical treatment in the settlement. Since the injured worker might use the citizen’s Medicare entitlement to pay for post-settlement medical benefits, there technically can be a cost shift if the settlement does not address post-settlement medical expenses. The risk here, however, is on the injured worker. If the employee is not entitled to Medicare benefits, and there is no reasonable expectation that he or she will be entitled to Medicare benefits through some other means (such as naturalization), the Respondent has no affirmative duty under State or Federal Law to go outside of the normal negotiation process for a workers’ compensation claim. There is no legal duty to protect Medicare’s non-existent interests. For the Claimant, however, the risk is two-fold. First, in order to shift the burden of the future medical care to the Medicare system, the Claimant would need to commit fraud by using the citizen’s Medicare benefits to obtain those medical benefits. Civil and criminal penalties could apply against the injured worker in such a situation. Second, once a settlement has been effectuated which closes medical rights, the burden of post-settlement medical payments falls solely on the Claimant. The monies would be payable from the total amount of the settlement, hence insulating the employer from post settlement liability even further.
With that noted, settlement may be impossible without some type of future medical allocation, particularly in cases where future medical expenses are certain given the nature of the injury. A future medical allocation without a formal MSA could be appropriate. In the unlikely event that CMS ever looked to negate the settlement, such a future medical allocation can demonstrate that future medical interests were addressed.
I would be remiss if I did not mention that the Court of Civil Appeals in Oklahoma addressed a similar situation in 2013, where the employee was using his tax identification number at the time of the settlement, was not Medicare eligible at the time of settlement, and became a naturalized citizen two years after the settlement was effectuated. An MSA was not approved by CMS — presumably because the Claimant was not a Medicare beneficiary on the settlement date and the case therefore settled for an amount below CMS’ review thresholds. The Claimant tried to enforce payment of the future medical portion of the settlement by arguing that the employer agreed to pay him over $12,000.00 – though after the MSA was approved by CMS. The Court found that since a condition precedent to CMS submission of the MSA, i.e. that the Petitioner was a Medicare beneficiary, was a mutual misapprehension of the parties, and since the condition precedent (that CMS approval occur) never did happen, the Claimant could not complain of the employer’s failure to pay the future medical (MSA) monies.
A word of caution: All cases on enforcement of the terms of a settlement contract are very fact specific. We strongly recommend careful drafting of settlement contract language, particularly when settlement is effectuated before CMS approval and/or before Medicare eligibility is confirmed. We help our clients draft settlement language on a regular basis, and are happy to assist any time you have issues such as these come along.