(a) Lump-sum commutation of future benefits. If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment.
(b) Lump-sum compromise settlement. (1) A lump-sum compromise settlement is deemed to be a workers' compensation payment for Medicare purposes, even if the settlement agreement stipulates that there is no liability under the workers' compensation law or plan.
(2) If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers' compensation by releasing the workers' compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.
(c) Lump-sum compromise settlement: Effect on services furnished before the date of settlement. Medicare pays for medical expenses incurred before the lump-sum compromise settlement only to the extent specified in § 411.47.
(d) Lump-sum compromise settlement: Effect on payment for services furnished after the date of settlement—(1) Basic rule. Except as specified in paragraph (d)(2) of this section, if a lump-sum compromise settlement forecloses the possibility of future payment of workers' compensation benefits, medical expenses incurred after the date of the settlement are payable under Medicare.
(2) Exception. If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses.
Notes of Decisions
Cited in
18
cases (
3 in the last 5 years), 2005–2026 · leading case:
Protocols, LLC v. Leavitt, 549 F.3d 1294 (10th Cir. 2008).
Protocols, LLC v. Leavitt, 549 F.3d 1294 (10th Cir. 2008).
· cites it 2× “See 42 C.F.R. § 411.46 (b)(2). Medicare then would not pay for treatment that should have been covered by workers’ compensation.”
Frazer v. CNA Ins., 374 F. Supp. 2d 1067 (N.D. Ala. 2005).
· cites it 2× “” Relevant to the present inquiry is 42 C.F.R. 411.46 which provides Lump sum payment.”
Rood v. New York State Teamsters Conf. Pension & Ret. Fund, 39 F. Supp. 3d 241 (N.D.N.Y. 2014).
· cites it 3× “§ 1395y(b)(2)(A); see also 42 C.F.R. § 411.46 (“If a lump-sum [WC] award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are…”
Su Hoang v. Workers' Comp. Appeal Bd., 51 A.3d 905 (Pa. Commw. Ct. 2012).
“R. § 411.45 and § 411.47. Whenever future medical expenses are a component of a compromise and release agreement, as in this case, Medicare's interests must also be considered.”
Hudson v. Cave Hill Cemetery, 331 S.W.3d 267 (Ky. 2011).
“42 C.F.R. 411.46 requires a lump-sum workers’ compensation settlement that includes future medical benefits to consider Medicare's interests adequately for the remainder of the worker’s life expectancy.”
Sipler v. Trans Am Trucking, Inc., 881 F. Supp. 2d 635 (D.N.J. 2012).
· cites it 2× “To be sure, Medicare set-asides are prudent in settlements for future medical expenditures in the worker’s compensation context because, under the MSP, Medicare becomes a secondary payer for such expenditures to the extent a “compensation award stipulates that the amount paid is…”
In re Marriage of Washkowiak, 2012 IL App (3d) 110174 (Ill. App. Ct. 2012).
· cites it 4× “See 42 C.F.R. § 411.46 (2012). Specifically, 42 C.”
Miller v. Workers' Comp. Appeal Bd., 940 A.2d 603 (Pa. Commw. Ct. 2008).
“42 C.F.R. § 411.46 . 5 Currently, the Center for Medicare and Medicaid Services (CMS) is responsible for administering Medicare.”
William B. Cherry v. Rhonda Marlene Cherry (now Fulkroad), 2021 Ark. 49 (Ark. 2021).
“However, the circuit court found that the annuities, including a prorated share of the pending five-year The Medicare set-aside annuity was created in accordance with 42 CFR 411.46 and 1 411.47 to accommodate potential Medicare liens resulting from Cherry’s medical expenses.”
In Re Marriage of Washkowiak, 966 N.E.2d 1060 (Ill. App. Ct. 2012).
· cites it 6× “For example, 42 C.F.R. § 411.46 establishes that all parties *1064 in a workers' compensation case have a duty to protect Medicare's interests when resolving workers' compensation cases that include future medical expenses.”
M.W. Sheaffer v. WCAB (Stand. Steel, LLC) (Pa. Commw. Ct. 2017).
“§1395y(b)(2); 42 CFR §§411.46 , 411.47, and 411.21. The recommended method to protect Medicare’s interests is a Workers’ Compensation Medicare Set Aside Account, a financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical…”
Stillwell v. State Farm Fire & Cas. Co. (M.D. Fla. 2021).
“Although CMS prescribes in 42 C.F.R. § 411.46 (b)(2) a standard for voiding a workers’ compensation settlement that fails to cover expected medical expenses, no similar standard exists to escape a settlement in a personal injury action.”
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