Dear Jen:

We are currently working with a WC claimant who was injured in 2000. He did not return to work, applied for SSDI, and was accepted. We had a MSA prepared last year in anticipation of settlement; however, earlier this year he let me know that he had returned to the workforce full time and his SSDI ended back in March 2008. He would still like to settle his case with a lump sum. Is it okay at this point to proceed with a lump sum settlement and will I need to obtain CMS approval on an MSA for this case?

Thanks,
Greg, claims adjuster

Dear Greg:

First, remember that under the Medicare Secondary Payer Statute (MSP), Medicare's interests need to be protected whether or not Medicare approval of a Medicare Set-Aside (MSA) is required per workload review thresholds set forth for workers' compensation claims. To determine whether Medicare has an interest to be protected, I strongly recommend you confirm the claimant's benefit status before you proceed with a final settlement. Just because a claimant returns to work does not mean he loses his Medicare or SSDI eligibility immediately. Return-to-work programs allow Social Security Disability beneficiaries to return to the work force on a trial basis without experiencing the immediate loss of benefits. In fact, a person can work for several months before their SSDI benefits are terminated. Although it sounds like this particular claimant participated in a return-to-work program and his SSDI benefits have been discontinued, under the Ticket to Work and Work Incentives Improvement Act, he may continue to be Medicare-eligible for several years after SSDI benefits have stopped. Therefore, it's very likely that Medicare has an interest that must be protected in settlement of this claim.

Jen

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