The Medicare set-aside program, sitting astride the workers' comp and federal benefit systems, has been hard for me to understand. To learn more, I located Ryan Roth. He is an expert and is comfortable talking about the broad context of serious disabilities and insurance economics. He spoke with me from his office at Medval, a Maryland firm that handles Medicare set-asides for claims-payers.
Rousmaniere: When does Medicare get into workers' comp?
Roth: In two ways. When an injured worker by virtue of age becomes eligible for Medicare, any ongoing medical treatment for the injury might be paid by Medicare. The other way is, when the injured worker becomes a beneficiary of Social Security Disability Insurance, she or he by law automatically becomes eligible for Medicare regardless of age after 24 months.
Rousmaniere: What is a Medicare set-aside?
Roth: It is a program by which Medicare ensures that it will not become responsible for paying for medical costs that should otherwise be paid by a primary payer. It is mostly focusing on workers' comp claims settlements involving a potentially significant amount of future treatment. No one knows how many settlements of note take place, but a reasonable estimate is 30,000 a year. That's about 1 percent of all work injuries.
Rousmaniere: Who are these claimants?
Roth: Medval's business tends to involve the relatively more complex and expensive claims within the entire set-aside population. The median total lifetime medical costs of claims we see are roughly $300,000. About 10 percent will likely have medical costs of over 1 million dollars. Most of these claimants are already eligible for SSDI.
Rousmaniere: What injuries?
Roth: About 70 percent of the claims we see are very serious injuries, about which compensability is not an issue and for which there is a need for future, possibly lifetime care. The set-aside program has been very helpful in settling these types of claims. With a formal, Medicare-approved settlement, all parties can be assured that if some unforeseen complications arise, Medicare won't look to the parties for additional reimbursement. For these types of claims, the goal is to create a set-aside that Medicare approves and also gets settlement dollars to the claimant.
Rousmaniere: What about disputed claims?
Roth: Things get sticky when an attorney has built up a medical catastrophe scenario in trying to increase the size of a settlement. The set-aside may then threaten to consume the entire settlement--not what the attorney and claimant had in mind. These questionable claims are about one-tenth of the ones we are asked to become involved with.
Rousmaniere: Back to serious injuries. What conditions do you see?
Roth: A lot of failed back syndrome. These cases may involve spinal cord stimulators, morphine pumps and a large amount of narcotic medications. We also work with a lot of paraplegics, quadriplegics, RSD and severe pain management cases. Many have a psychiatric component, nonoccupational in nature or aggravated by the work injury.
Rousmaniere: Can the set-aside program be improved?
Roth: Since the program began in earnest a few years ago, the set-aside industry has become more sophisticated, more focused on the entire settlement. Medicare is now more consistent and timely. But it has no appeal process. And it needs to better distinguish genuinely catastrophic cases from largely manufactured ones.
is a Vermont-based writer and columnist for
Risk & Insurance®.
October 1, 2006
Copyright 2006© LRP Publications