Page 30: of Marine News Magazine (November 2011)

30MNNovember 2011LEGALThe sad story repeats itself often; an employee gets injured, argues that he can never return to work offshore, receives a big settlement or award (that includes money for future medical care), buys a new house , truck and a lot of toys. Several years later, they are broke because they have blown all of the money. In the past, if the employee was eligible for Medicare, he could have the government pay for his future medical care, even though he received a monetary award to pay for his future medical care. Today, however and due to budget concerns, the federal government is trying to cut down on this practice. The process started with workers? compensation claims in the 1980?s and has quietly expanded its reach beyond the comp world and now includes Jones Act claims and other third party negligence claims. UNDERSTANDINGTHE GOVERNMENT ?SPOSITION? ANDYOURS , TOO It is important that employers understand the govern- ment?s position when settling claims with injured employ- ees that will require future medical treatment. Failing to comply with the government?s suggestions may expose the company to significant liability for the employee?s future medical care, despite receiving a full release of liability from the worker. The government has mandated the use of a Medicare Set Aside (MSA) that provides funding for future medical care when the injured employee receives an award that com- pensates him for future medical treatment. The govern- ment?s mandate for the use of MSAs arises from an infor- mal set of rules, regulations and guidelines that are prom- ulgated by the Centers for Medicare and Medicaid Services (CMS) under the authority of the Medicare Secondary Payer Act (MSP). To reduce Medicare costs, Congress enacted a collection of statutory provisions in the 1980?s; collectively referred to as the Medicare Secondary Payer Act. Congress recog- nized that workers? compensation carriers should be the primary source of medical insur- ance coverage for people injured on the job. The MSP prohibits Medicare from making payments, if payment has been made or isreasonably expected to be made by a workers? compensation plan, lia- bility insurance, no-fault insur-ance, or a group health plan. Simply put, the MSP provisions provide that the government serve as a secondary insurance provider when another source of primary coverage exists. If another source of coverage is available for someone?s injury-related care, he or she should use it. If no other source of coverage is available, Medicare will still pay for injury-related care. If a workers? compensation carrier settles its future obli- gation to pay for injury-related medical care, the settle- ment must protect Medicare?s interests by allocating a por- tion of the settlement proceeds to cover those future med- ical costs. Medicare does not pay for the medical care until the beneficiary has exhausted his or her remedies under workers? compensation, including spending the portion of the settlement earmarked for future medical expenses. In 2001, Medical Set-Asides were officially recognized as a procedural option for workers? compensation cases. In a memorandum, CMS announced that compliance withthe MSP required claimants to set aside a portion of their settlement for future Medicare-covered expenses when the settlement closed out future medical expenses. The new ?set aside? requirement was designed to prevent attempts ?to shift liability for the cost of a work-related injury or ill- ness to Medicare.? The MSA must account for the future medical needs of the injured worker related to the work injury that are ?rea- sonably foreseeable.? These medical expenses include doc- tor bills, hospital care, skilled and intermediate care, skilled rehabilitation, home health care, hospice care, durable medical equipment, and any other items or serv- ices that would otherwise be covered by Medicare. By Lawrence DeMarcay, III The Jones Act, Medicare Set Asides & You Despite settling a personal injury claim with full release, can you still have future liability? MN#11 (18-31):MN 2011 Layouts 10/27/2011 9:30 AM Page 30