Frequently Asked Questions
Workers Comp and Medicare Set-asides


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Q3. Use of WC Settlement Funds Prior to Medicare Entitlement

May workers' compensation settlement funds attributable to future medicals be used prior to Medicare entitlement?
A3. For claimants who are not yet Medicare beneficiaries and for whom CMS has approved a WCMSA, the WCMSA may be used prior to becoming a beneficiary because the amount was priced based on the date of the expected settlement. Use of the WCMSA is limited to services that are related to the workers' compensation claim or settlement and that would be covered by Medicare if the individual were a Medicare beneficiary. The same requirements that Medicare beneficiaries follow for reporting and administration are to be used in the above cases. The CMS will not pay for any expenses related to the workers' compensation illness or injury until a self-attestation document or a full accounting of all monies expended from the WCMSA are sent to the lead contractor upon Medicare entitlement. At that time, the lead contractor will adjust the WCMSA record to reflect the expenses paid prior to entitlement.

Even if there is no CMS-approved WCMSA, any funds from a WC settlement attributable to future medicals that are remaining at the time a claimant becomes a Medicare beneficiary must be used for Medicare-covered services related to the workers' compensation claim or settlement until such funds are exhausted. Only then will CMS pay for Medicare-covered services related to the workers' compensation claim or settlement.

NOTE: THE ABOVE ANSWER REPLACES THE FIRST PARAGRAPH OF THE NOTE AT THE END OF ANSWER NUMBER FOUR IN THE JULY 23, 2001 ARA WC MEMORANDUM AND QUESTION NUMBER THREE IN THE MAY 23, 2003 ARA WC MEMORANDUM.