All litigants to an Oklahoma City or Tulsa Workers’ Compensation case (i.e. the injured worker, his or her employer, its insurance company and any attorney or lawyer for any ot these respective parties) have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving any Oklahoma Workers’ Compensation case that involves in any way future medical treatment and expenses.  The method most recommended by Medicare to protect its interest is a Workers’ Compensation Medicare Set-aside Arrangement (WCMSA), which arrangement allocates a portion of any Oklahoma City or Tulsa Workers’ Compensation settlement for future medical expenses.  The precise amount of the set-aside will be determined on a case-by-case basis, and will be reviewed by the Centers for Medicare Services (“CMS”), when appropiate.  Once the CMS determined set-aside amount has been exhausted and accurately accounted for to CMS, Medicare will then agree to pay primary for future Medicare covered expenses related to the injured employee’s work-related injury.

CMS REVIEW THRESHOLDS FOR OKLAHOMA WORKERS’ COMPENSATION CASES

Medicare has determined that it is not in its best interest to review every Oklahoma City or Tulsa workers’ comp settlement statewide in order to protect its interests pursuant to the Medicare Secondary Payer Statute.  CMS has determined that an attorney or lawyer in Oklahoma need not prepare and submit to Medicare a detailed Workers’ Compensation Medicare Set-aside Arrangement (“WCMSA”) when settlement of the injured employee’s Oklahoma workers’ compensation case leaves the medical treatment aspects of the claim intact.  However–a Workers’ Compensation Medicare Set-aside Arrangement should be submitted to CMS by any attorney or lawyer for a party to an Oklahoma City or Tulsa workers’ compensation settlement for proper consideration in the following situations:

• The injured worker is currently a Medicare beneficiary and the total settlement amount is greater than $25,000–that is CMS will not review WCMSA proposals submitted by the injured worker &/or his or her attorney or lawyer where the employee is not currently a Medicare beneficiary and the “total settlement amount” is $25,000 or less (injured workers commonly referred to by CMS as “low dollar threshold Medicare beneficiaries”)*; OR
• The hurt employee has a “reasonable expectation” of Medicare enrollment within 30 months of the settlement date and the anticipated total Oklahoma workers’ comp settlement amount for future medical expenses and disability/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.

*NOTE: CMS sternly cautions that this is a CMS workload review threshold and not a substantive dollar or “safe harbor” threshold.  In other words, if the total settlement amount is $25,000 or less, the insurance company, the injured employee &/or any attorney or lawyer for each, are still required to consider Medicare’s interests.   The method recommended by CMS to protect Medicare’s interests is to enter into a Medicare Set Aside arrangement to protect Medicare’s interests, even though CMS will not review the proposal.

COMPUTING THE TOTAL SETTLEMENT AMOUNT FOR DETERMINING WHETHER A WCMSA MUST BE SUBMITTED TO CMS FOR APPROVAL.  Insurance companies, injured workers and any attorney or lawyer for such parties should always keep in mind that in computing the total amount of any Oklahoma Workers’ Compensation settlement for determining whether such settlement reaches the threshold amount for preparation of a Workers’ Compensation Medicare Set-aside Arrangement that the total settlement amount necessarily includes, but is not limited to, wages, attorney or lawyer fees, all future medical expenses (including prescription drugs), and repayment of any Medicare conditional payments.  Also, payout totals for all annuities to fund the above expenses must be used rather than costs or present values of any annuities.  Finally–any previously settled portion of the Tulsa or Oklahoma City workers’ comp case must be included in computing the total settlement amount when determing whether a WCMSA must be submitted to CMS.

WHEN DOES AN INJURED WORKER HAVE A ‘REASONABLE EXPECTATION’ OF BECOMING A MEDICARE BENEFICIARY?  When an injured Oklahoma City or Tulsa Workers’ Compensation claimant settles his or her case for more than $250.000 (as defined above) he or she is required to submit a fully compliant Workers’ Compensation Medicare Set-aside arrangement to CMS for approval if he or she is ‘Reasonably Expected to Become a Medicare Beneficiary’.  According to CMS’ protocol an injured worker has a “reasonable expectation” of Medicare enrollment if he or she:

• has applied for Social Security Disability Benefits;
• has been denied Social Security Disability Benefits but anticipates appealing that decision;
• is in the process of appealing &/or re-filing for Social Security Disability Benefits;
• is 62 years and 6 months old (i.e., may be eligible for Medicare based upon his/her age within 30 months); or
• has an End Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD.

To the extent an Oklahoma Workers’ Comp settlement meets both of the criteria (i.e., the settlement is greater than $250,000 AND the injured worker is reasonably expected to become a Medicare beneficiary within 30 months of the settlement date), then a CMS-approved Medicare Set-aside arrangement is appropriate.

CAUTION! CMS flatly warns that both the beneficiary and non-beneficiary review thresholds described above are subject to adjustment at any time and without warning.  Any attorney or lawyer representing an injured worker or insurance company in an Oklahoma workers’ compensation compromise settlement should note that CMS reserves the right to modify or eliminate its review criteria if it determines that Medicare’s interests are not being protected or met.

WHEN A MEDICARE SET-ASIDE IS NOT REQUIRED ON OKLAHOMA SETTLEMENT

An attorney or lawyer representing an injured worker or insurance company in a Oklahoma City or Tulsa Workers’ Compensation compromise settlement should note that a Workers’ Compensation Medicare Set-aside Arrangement is not required to be submitted to CMS if ALL of the following apply:

• The facts of the Oklahoma workers’ compensation compromise settlement demonstrate that the injured worker is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement);
• There is no evidence that the injured worker &/or his or her attorney or lawyer is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare’s detriment; and,
• The injured worker’s treating doctor concludes in writing that to a reasonable degree of medical certainty the hurt employee will not longer require any Medicare-covered treatments related to the Oklahoma worker’s comp injury.

STRUCTURED WORKERS’ COMPENSATION MEDICARE SET-ASIDE ARRANGEMENTS

A Workers’ Compensation Medicare Set-aside Arrangement can be established as a structured arrangement, where payments are made to the arrangement on a defined schedule to cover expenses projected for future years.  In a structured Medicare Set-aside Arrangement, monies are apportioned over fixed or definite periods of time.  In such cases, Medicare will not agree to cover the beneficiary if there is no verication that the funds apportioned in the arrangement have been exhausted.  Medicare does not make any payments until the contractor responsible for monitoring the individual’s case can verify that the funds apportioned to the period, including any carry-forward amount, have been completely exhausted as set forth in the Medicare Set-aside Arrangement.  Attorneys and Lawyers to an Oklahoma workers comp settlement should consider that CMS will approve a payout amount for services that would otherwise be reimbursable by Medicare from the Workers’ Compensation Medicare Set-aside Arrangement in the following manner:

• The seed money for the Workers’ Compensation Medicare Set-aside Arrangement must include an amount equal to the amount of money calculated to cover the first surgery procedure &/or replacement and two years of annual payments.
• The remainder of the approved amount should be divided by the remainder of the claimant’s life expectancy.
• Subsequent annual deposits into the Workers’ Compensation Medicare Set-aside Arrangement are to be based upon a set “anniversary date” which cannot be more than one year after the settlement date.

NOTE: In a structured Medicare Set-aside arrangement, if funds are not exhausted during a given period, then the excess funds must be carried forward to the next period.  The threshold after which Medicare would begin to pay claims related to the injury would then be increased in any subsequent period by the amount of the carry-forward.  This carry-forward process continues until the accumulated carry-forward plus the payment for a given year is exhausted.

SETTLEMENT OF OKLAHOMA WORKERS COMP CASE PRIOR TO SUBMISSION TO CMS

The parties to an Oklahoma City or Tulsa workers’ compensation case, ie. insurance company, injured worker &/or any attorney or lawyer for such litigants, can proceed with the settlement of the medical expenses portion of an Oklahoma work comp claim before CMS actually reviews the proposed Workers’ Compensation Medicare Set-aside Arrangment and determines an amount that adequately protects Medicare’s interests.  However, any statement in the compromise settlement documents or record of the amount needed to fund the WCMSA is not binding upon CMS unless/until the parties & their attorneys and lawyers provide CMS with documentation that the WCMSA has actually been funded for the full amount as specified by CMS that adequately protects Medicare’s interests as a result of its review.

If CMS does not subsequently provide approval of the funded Workers’ Compensation Set-aside Arrangement amount as specified in the compromise settlement documents/record and proof is not provided to CMS that the CMS-approved amount has been fully funded, CMS may deny payment for services related to the Oklahoma workmens’ comp claim up to the full amount of the settlement. Only the approval of the WCMSA by CMS and the submission of proof that the WCMSA was funded with the approved amount, would limit the denial of related claims to the amount in the WCMSA. This shall be demonstrated by submitting a copy of the final, signed settlement documents indicating the WCMSA is the same amount as that recommended by CMS.

NOTE: Any party to an Oklahoma compromise settlement and such party’s attorney or lawyer should be reminded that the injured worker could be at risk if the WCMSA is funded for less than the amount that CMS determines to be adequate to protect Medicare’s interests.

LISTING FUTURE MEDICAL COSTS IN AN OKLAHOMA WORKERS COMP SETTLEMENT

An Oklahoma workers’ compensation settlement that does not specifically account for past versus future medical expenses will be considered to be entirely for future medical expenses. This means that Medicare will not pay for medical expenses that are otherwise reimbursable under Medicare and are related to the Oklahoma City or Tulsa workmens compensation case, until the entire settlement is exhausted.  Additionally, please note that any allocations made for lost wages, pre-settlement medical expenses, future medical expenses, or any other settlement designations that do not consider Medicare’s interests, will not be approved by Medicare.

USE OF OKLAHLMA FEE SCHEDULE vs. ACTUAL CHARGES FOR WCMSA

The CMS uses either the Oklahoma Workers’ Compensation Court’s work comp fee schedule or the full actual charges for its review of a proposed Workers’ Compensation Medicare Set-aside Arrangement based upon whichever methodology is used by the individual/entity or attorney/lawyer submitting the proposal.  The administrator of the WCMSA (both professional administrators and self administrators) should make payments from the WCMSA on the same basis.  That is, if the proposal was submitted and approved based upon full actual charges, the administrator should make payment from the WCMSA based upon full actual charges; if the proposal was submitted and approved based upon Oklahoma Workers’ Compensation fee schedule amounts, the administrator should make payment from the WCMSA based upon Oklahoma Workers’ Compensation Court’s fee schedule amounts.

ADMINISTERING OKLA WORK COMP SETTLEMENTS & WCMSAs

When an injured worker designates a representative payee, appointed guardian/conservator, or has otherwise been declared incompetent by a court, any attorney or lawyer for the injured worker or insurance company submitting the Oklahoma Workers’ Compensation Medicare Set-aside Arrangement must include that information in their Medicare set-aside arrangement proposal to CMS.  In addition, the injured worker may self-administer his or her own Workers’ Compensation Medicare Set-aside Arrangement–and if he or she chooses to do so–must submit an annual self-attestation form when monies have been exhausted.

In professional administration situations, the administrator of the set-aside arrangement must forward annual accounting summaries concerning the expenditures of the arrangement to the CMS Medicare contractor responsible for monitoring the individual’s case.  In turn–the Medicare contrator is responsible for verifying that no payments from Medicare are mode for medical expenses related to the Oklahoma workers’ compensation injury until the Workers’ Compensation Medicare Set-aside Arrangement is exhausted.

NO MEDICARE PAYMENTS FOR WORK COMP INJURY UNTIL WCMSA IS EXHAUSTED

The purpose of a Workers’ Compensation Medicare Set-aside Arrangement is to pay for all medical treatment related to the injured worker’s work related injury or disease, therefore–Medicare will not make any payments on any medical bills related to the Oklahoma workers’ compensation case until nothing remains in the WCMSA.  According to CMS, these arrangements are established in order to pay for all medical expenses resulting from work-related injuries or diseases; they are not designated to simply pay portions of medical expenses for work-related injuries or diseases.  When WCMSAs are designated as lum sum settlements (i.e., the WCMSA is designated in a manner that the Oklahoma Workers’ Compensation settlement is paid into the arrangement all at once), Medicare would not make any payments for the injured worker’s medical expenses for work-related injuries or diseases until all the funds (including interest) within the WCMSA have been completely exhausted.  Generally, WCMSAs that are lump-sum settlements (i.e., the WCMSA is funded by the Oklahoma workers’ compensation settlement all at once) present less of a problem to monitor than structured settlements.  Howver, these same basic principles also apply to structured settlments.

CONCLUSION–OKLAHOMA WORK COMP MEDICARE SET-ASIDE ARRANGEMENTS

Injured workers, employers, insurance companies, attorneys and lawyers who are parties to an Oklahoma City or Tulsa workers’ compensation settlement where Medicare is or could potentially be involved have significant repsonsibilities to assure that Medicare’s interests are protected as part of the express terms of the proposed settlement.  Medicare’s interests are served by assuring to the extent possible that any future medical expenses related to the Oklahoma workers’ compensation injury are paid out of the proceeds of the proposed settlement, and not by Medicare.  When certain threshold requirements are met–a formal Workers’ Compensation Medicare Set-aside Arrangement (WCMSA) is absolutely necessary.  However, even if a detailed WCMSA is not mandatory CMS rules are clear that all parties to the Oklahoma Workers’ Compensation compromise settlement are required to consider and protect Medicare’s interest in assuring in a reasonable manner that all future medical expenses are paid out of and with the proceeds of the injured worker’s Oklahoma workers’ compensation compromise settlement.

If you should have any questions regarding your own Oklahoma workers’ comp compromise settlement and your obligations under the Medicare secondary payer statute please contact one of our attorneys at THE ASH LAW FIRM–we understand the interplay between your Oklahoma workers’ compensation case, social security disability and Medicare entitlement.

The following shall not constitute a compensable injury under the Workers’ Compensation Code:

1. An injury occasioned by the willful intention of the injured employee to bring about injury to himself or herself, or another;

2. An injury resulting directly from the willful failure of the injured employee to use a guard or protection against accident furnished for use pursuant to any statute or by order of the Commissioner of Labor;

3. An injury which occurs when an employee’s use of illegal drugs or chemicals or alcohol is the major cause of the injury or accident. The employee shall prove by a preponderance of the evidence that the use of drugs, chemicals or alcohol was not the major cause of the injury or accident. For the purposes of this paragraph, post-accident alcohol or drug testing results shall be admissible as evidence. A public or private employer may require an employee to undergo drug or alcohol testing if the employee has sustained an injury while at work. For purposes of workers’ compensation, no employee who tests positive for the presence of substances defined and consumed pursuant to Section 465.20 of Title 63 of the Oklahoma Statutes, alcohol, illegal drugs, or illegally used chemicals, or refuses to take a drug or alcohol test required by the employer, shall be eligible for such compensation;

4. Except for innocent victims, an injury caused by a prank, horseplay, or similar willful or intentional behavior;

5. An injury occurring at a time when employment services were not being performed before the employee was hired or after the employment relationship was terminated; and

6. An injury which occurs outside the course of employment. Employment shall be deemed to commence when an employee arrives at the employee’s place of employment to report for work and shall terminate when the employee leaves the employee’s place of employment, excluding areas not under the control of the employer or areas where essential job functions are not performed; provided, however, when the employee is instructed by the employer to perform a work-related task away from the employee’s place of employment, the employee shall be deemed to be in the course of employment when the employee is engaged in the performance of job duties directly related to the task as instructed by the employer, including travel time that is solely related and necessary to the employee’s performance of the task. Travel by a policeman, fireman, or a member of a first aid or rescue squad, in responding to and returning from an emergency, shall be deemed to be in the course of employment.

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