CMS THRESHOLDS FOR MSA REVIEW                          American Flag                    
Law Offices of Beverly Manley & Associates, P.C.                                    
Your Single Source for Medicare Secondary Payer Act Compliance Services 
Not every Medicare Set Aside (MSA) must be submitted to CMS for review and approval.  While the Medicare Secondary Payor Act requires that all secondary payor claim settlements consider Medicare's interests, there are CMS review thresholds that must be applied to determine which MSA's need CMS approval.  In order to make such a determination, we must first know the total settlement amount (which can be tentative if settlement is not yet final) and the claimant's Medicare eligibility status.
The CMS definition of total settlement amount (TSA) includes "indemnity (lost wages), attorney fees, set-aside amount, non-Medicare medical costs, payout totals for all annuities rather than cost or present values, settlement advances, lien payments (including repayment of Medicare conditional payments), amounts forgiven by the carrier, prior settlements on the same claim, and liability settlement amounts on the same WC injury (unless apportioned by a court on the merits), but excludes prior contested awards by a court on the merits."  Please note that when determining the TSA, it is important to include the lifetime MSA total, rather than an annuity purchase price. 

Medicare eligibility status can be determined in a number of ways.  If the claimant is a Medicare beneficiary, obtaining a copy of the Medicare card is the quickest, easiest way to verify eligibility.  If the claimant is eligible but does not have a Medicare card yet, we can determine the Medicare eligibility date basedon a copy of a SSD award letter.  If these are not available, a query can be sent to the Social Security Administration (SSA) by our firm; a nominal fee is charged by the SSA for a response. 

If the claimant is Medicare eligible AND the TSA exceeds $25,000.00 (inclusive of the MSA lifetime total), CMS review and approval of the MSA is required per the CMS April 25, 2006 Policy Memo.  Conversely, if the claimant is Medicare eligible AND his TSA (inclusive of the MSA lifetime total) is $25,000.00 or less, CMS approval is not required. 

If the claimant is NOT Medicare eligible AND the TSA is $250,000.00 or less (inclusive of the MSA lifetime total), CMS review and approval of the MSA is NOT required.  When the TSA is at least $250,000.00, we recommend submission to CMS.

While some cases do not meet the CMS threshold for review, the MSA should still be established and maintained.   Per the July 11, 2005 CMS policy memo, "The thresholds for review of a WCMSA proposal are only CMS workload review thresholds, not substantive dollar or 'safe harbor' thresholds for complying with the Medicare Secondary Payer law.... [E]ven if review thresholds are not met, Medicare's interest must always be considered." 

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