The short answer is “yes,” you can ignore Medicare, regardless of the settlement amount. I mean, you’re an adult and this is America, right? You can do anything you want! You can tear the label off your mattress. You can skip flossing your teeth. You can stick a fork in the toaster to retrieve that last tiny piece of toast. (It’s gross but) you can drink straight out of the milk carton. However, the lawyer (and parent) in my head feels compelled to remind you – there are consequences!
If you poll a random group of folks, they would probably agree that “1” is the loneliest number. But if you poll a group of human resource, insurance and workers’ comp professionals, you might find many of them opining “25,000” is the loneliest number, which also makes it the most misunderstood.
Remember the game “Telephone?” I imagine playing it, where someone starts by saying “$25,000, is a review threshold, meaning CMS will not review an MSA for Medicare Beneficiary when the total settlement is under $25,000. It is not a safe harbor, which means you can’t just ignore Medicare.” By the end of the round, the last person blurts out “Ok! If the settlement is under $25,000, dock your ship and grab a pina colada! Woohoo!”
The truth is the number comes from CMS, it is memorialized in the reference guide, and it is indeed a review threshold. When the parties decide an MSA is the preferable method of dealing with future medical costs that would be paid through the claim and would be covered by Medicare, and they would like to submit it to CMS for approval, it must fit one of two review categories or classes.
Class 1 is where the claimant is a current Medicare Beneficiary, and the total settlement amount (all settlement money, including attorney fees) is expected to be greater than $25,000.00.
Class 2 is where the claimant is not a current Medicare Beneficiary, but has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount is expected to be greater than $250,000.00.
According to the reference guide, a claimant has a reasonable expectation of Medicare enrollment within 30 months if any of the following apply:
• The claimant has applied for Social Security Disability Benefits.
• The claimant has been denied Social Security Disability Benefits but anticipates appealing that decision.
• The claimant is in the process of appealing and/or re-filing for Social Security Disability benefits.
• The claimant is 62 years and 6 months old.
• The claimant has an End Stage Renal Disease (ESRD) condition, but does not yet qualify for Medicare based upon ESRD.
If the MSA doesn’t fit one of these categories, you can’t submit it for approval. Well, you can’t submit it and expect a reply (other than it does not meet the review thresholds). This is not a safe harbor, which means you can’t claim you submitted the MSA to CMS, but it refused to review. In fact, keep in mind the guide also reminds us there is NO legal obligation to seek CMS approval, which implies there still might be an obligation to properly consider.
The facts of each case will dictate whether Medicare has an interest that needs to be considered and/or protected. If nothing else, remember the review thresholds have NOTHING to do with this consideration. If you have any questions or concerns about this aspect of your settlement, consult your MSP professional for assistance.
Hopefully, “25,000” in this context, is no longer misunderstood. For me, it’s always been Pi.
Thanks for stopping by.