Introducing “Answers from Amy”

8.30.2018 Blog

Medicare Secondary Payer compliance is an area of practice that is governed by the MSP Statute and supporting Federal Regulations.  In addition to the law, the Centers for Medicare and Medicaid Services (CMS) also publishes the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide.   The application of the MSP Statute to a particular set of facts however is not always straightforward. In light of this, our blog will feature a frequently asked question along with the appropriate MSP compliance analysis to assist our readers in determining the best course of action in any given claim.

Determining whether a claim meets the CMS internal workload review is not always straightforward. Parties may also lack a complete understanding of the impact the CMS review thresholds have in a settlement. Consider the following question involving review thresholds and submission to CMS:


I have a claimant who is currently 62 years and 1 month old.  The total settlement is over $250,000.   Does this meet the CMS review threshold? If not, are we “safe” by not submitting?

Amy’s answer:

The Reference Guide allows the parties to submit an MSA for approval where the Claimant will meet review thresholds on the proposed settlement date.   If no proposed settlement date is listed, CMS defaults to using a PSD of four months from the date of submission. The Claimant in the question above is 62 years and 1 month old. If submitted today without a PSD mentioned, CMS would consider the Claimant to be 62 years, 5 months at the time of the PSD and the case wouldn’t meet thresholds. However, if submitted one month from now, the case in question could technically meet review thresholds in this way.

I have heard advice here and there that submission of a below threshold MSA will yield a letter from CMS that protects the parties from any future claims by Medicare – i.e. a “safe harbor.”  This could not be further from the truth.  The Federal Statute and Code of Federal Regulations do not set the WCMSA review thresholds, nor do they provide any safe harbors, at least as the statute is written now.  There have been bills presented over the years to change that, but they have not passed nor been signed in to law.  Accordingly, per the US Code and CFR, no settlement should put the burden of payments on the Medicare system when there is a primary payer, regardless of review thresholds.  Should a settlement do so, a workers’ compensation specific section of the CFR specifically gives CMS the authority to completely disregard any workers’ compensation settlement which shifts the burden of medical care from the primary payer to the Medicare system. 42 CFR 411.46(b)(2) – dealing with WC compromise settlements –  specifically states: “If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers’ compensation by releasing the workers’ compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.”  Accordingly, I would counsel every client of mine that there is no safety in a below-threshold MSA where there is a burden shift.

CMS’s published position is that a “Below Threshold” letter does not provide any security or safe harbor. The Reference Guide states on page 9 as follows: “…if a claimant’s WC settlement does not meet the current workload review thresholds, CMS will not issue a ‘verification letter’ indicating that the review criteria have not been met, or indicating that a WCMSA is unnecessary. CMS will honor the threshold in effect at the time of settlement.”  The letter they send is called a “Below Threshold” letter and reads as follows: “…due to resource constraints, CMS will not review this case because the facts presented do not meet the above thresholds. However, claimants must still consider Medicare’s interest in all workers’ compensation cases and ensure that Medicare pays secondary to workers’ compensation in such cases.”  Nothing in any of these publications would lead me to counsel a client that a below threshold letter provides any modicum of safety or protection.

Send in your questions and watch our blog for our comments. Our team of experienced MSP compliance attorneys is here to assist you with your MSP compliance issues.


The NBKL blog is provided for informational purposes; we are not giving legal advice or creating an attorney/client relationship by providing this information.  Before relying on any legal information of a general nature, you may consider consulting legal counsel as to your particular facts and applications of the law.