Frequently Asked Questions
Part D and Medicare Set-asides

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Q3. What are CMS' submission requirements if the WC claim did not "settle" (as defined in Answer 2 above) prior to January 1, 2006?

A3. If the WC case did not "settle" (as defined in Answer 2 above) prior to January 1, 2006 and the WCMSA proposal is received by CMS' Coordination of Benefits Contractor (COBC) on or after January 1, 2006, then the submitter must include separate amounts for future medical treatment and future prescription drug treatment in the cover letter. In addition, the cover letter must include an explanation as to how the submitter calculated the future prescription drug treatment amount (i.e., actual costs, average wholesale price, etc.).

For structured WCMSA proposals, the submitter must also indicate whether any portion of the future prescription drug treatment amount has been included in the initial deposit (i.e., seed money). Per Question and Answer Number 5 of the October 15, 2004 memorandum, the seed money for a structured WCMSA must include a sum equal to the amount of monies calculated to cover the first surgery procedure and/or replacement and two years of annual payments (which must include prescription drug treatment). The remainder of the approved amount should be divided by the remainder of the claimant's life expectancy (or a shorter defined period of time if CMS has agreed to a shorter time period).

NOTE: The amount for future prescription drug treatment should not be a separate annuity from the future medical portion of the WCMSA.