Medicare Set Aside Directive–Fort Worth, Texas Workers’ Compensation Defense Lawyers

JUL 23 2001
To: All Associate Regional Administrators
Attention: Division of Medicare
From: Deputy Director
Purchasing Policy Group
Center for Medicare Management
SUBJECT: Workers’ Compensation: Commutation of Future Benefits
Medicare’s regulations (42 CFR 411.46) and manuals (MIM” 3407.7&3407.8 and MCM
”2370.7 & 2370.8) make a distinction between lump sum settlements that are commutations of
future benefits and those that are due to a compromise between the Workers’ Compensation
(WC) carrier and the injured individual. This Regional Office letter clarifies the Centers for
Medicare & Medicaid Services (CMS) policy regarding a number of questions raised recently by
several Regional Offices (RO) concerning how the RO should evaluate and approve WC lump
sum settlements to help ensure that Medicare’s interests are properly considered.
Regional Office staff may choose to consult with the Regional Offices Office of the General
Counsel (OGC) on WC cases because these cases may entail many legal questions. OGC should
become involved in WC cases if there are legal issues which need to be evaluated or if there is a
request to compromise Medicare’s recovery claim or if the Federal Claims Collection Act
(FCCA) delegations require such consultation. Because most WC carriers typically dispute
liability in WC compromise cases, it is very common that Medicare later finds that it has already
made conditional payments. (A conditional payment means a Medicare payment for which
another payer is responsible.) If Medicare’s conditional payments are more than $100,000 and
the beneficiary also wishes Medicare to compromise its recovery under FCCA (31U.S.C.3711),
the case must be referred to Central Office and then forwarded to the Department of Justice. It is
important to note in all WC compromise cases that all pre-settlement and post-settlement
requests to compromise any Medicare recovery claim amounts must be submitted to the RO for
appropriate action. Regional Offices must comply with general CMS rules regarding collection of
debts (please reference the Administrator’s March 27, 2000 memo re: New instructions detailing
your responsibilities for monies owed to the government).

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.