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  1. #1
    Join Date
    Mar 2009
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    Default C&R Settlement & Private Disability Providers

    VA Case
    My wife has a WC case that is 390 weeks old. VA allows 500 week maximum for indemnity payments.

    We are considering a C&R Settlement of 300k +. There is no MSA as she does not have enough SS credits. She is 59.

    There is another disability carrier that will step in once settlement is completed.

    I have researched this relationship between the WC settlement and the other disability provider and found this statement:

    "C&R settlements are the only type of settlement that allows you to insert language into the settlement document that may avoid or limit how much credit the disability provider may take."

    My questions:
    [LIST][*]Is that statement correct?[*]If so, who determines the amount between future medical and indemnity?[*]Can we insist (since we are making the settlement demand) that all or a large majority of the settlement be designated as future medical?

  2. #2
    Join Date
    Feb 2007
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    Default Re: C&R Settlement & Private Disability Providers

    There is no MSA as she does not have enough SS credits. She is 59.
    You better check that again. At age 65, everyone is entitled to Medicare coverage, whether or not there are sufficient SSA credits. For one, she is eligible for SSA benefits under your account.
    And in a comp/PI claim that includes medical, you cannot sign any type of waiver that would release Medicare of any liability to benefits.

    My questions:[list][*]Is that statement correct?[*]If so, who determines the amount between future medical and indemnity?[*]Can we insist (since we are making the settlement demand) that all or a large majority of the settlement be designated as future medical?
    Where did you read the statement...?

    On the medical allocation... again, you need to check with CMS/Medicare before you finalize any settlement. Under the new reporting rules, for any party that does not take the steps to protect Medicare interests, there could be up to $1000/DAY in penalties. That includes the ER/IC/AA/DA and applicant. IF a setaside is required, CMS will tell you how much is necessary to fund.

    In a comp claim, the amount of indemnity is pretty much determined by the impairment rating.( VA allows 500 week maximum for indemnity payments). So the number of weeks remaining here would be the balance of PPD. You could adjust that number to reflect 'todays dollars'. That would reduce the amount of indemnity.

    There is another disability carrier that will step in once settlement is completed.
    This STD/LTD IC provides benefits to a work related injury?. Get it in writing.
    The language you are referring to is basically how the indemnity is calculated. As there are limits to the weekly/monthly benefit dollars, the IC will take an offset/credit based on the earnings at the time of injury. You need to show that the indemnity is based on an amount that coincides with those rules. That the payment whether lump sum or bi weekly would be the same... how the money has been pro rated over the remaining 110 weeks to amount to the portion of the 300K that is indemnity.

    Obviously that is why you are attempting to allocate the bulk of the settlement dollars to 'future medical' reimbursement. It isn't as simple to come up with a dollar amount, and allocate this on your own. And this claim/settlement IS going to be reported to SSA/CMS/Medicare. The actual legislated rule changes are not effective until July 1/09...but IC's are doing the already. You need the CMS allocation. That will determine the medical here.

  3. #3
    Join Date
    Mar 2009
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    2

    Default Re: C&R Settlement & Private Disability Providers

    Thanks for the quick response. A couple of follow ups if I may:

    1. I know she is going to be covered under spousal rules but here's what the IC carrier said:
    "What we would have to do if we reach a settlement is including this letter as an attachment and put language in the settlement documents that she is not eligible and if at any time she becomes eligible she understands that she must exhaust the settlement funds before pursuing treatment under Medicare for her work related injury."

    2. Statement came from a reference book from local university on life care planning. I did the future value calculation of remaining weeks payments. How does her disability rating enter into the calculation?

    3. Got the STD/LTD IC letter on benefits and they have been paying a minimum amount that is required by policy since claim inception. I also have original policy and am in contact with our case manager and have correspondence confiming info.

    4. You state " The actual legislated rule changes are not effective until July 1/09...but IC's are doing the already. You need the CMS allocation. That will determine the medical here" .

    what rule changes?
    Isn't the WC IC responsible for the CMS?
    If the VA WCC approves this settlement, how can we be held responsible?

  4. #4
    Join Date
    Oct 2006
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    9,076

    Default Re: C&R Settlement & Private Disability Providers

    there is a requirement for mandatory reporting that takes affect 7/1.
    they have to report the claim and settlement even though the settlement does not require CMS approval.

    "Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (PL 110-173) amends the Medicare Secondary Payer (MSP) provisions of the Social Security Act (Section 1862(b) of the Social Security Act; 42 U.S.C. 1395y(b)) to provide for mandatory reporting for group health plan arrangements, liability insurance (including self-insurance), no-fault insurance, and workers' compensation. The provisions will be implemented January 1, 2009, for information about group health plan arrangements, and July 1, 2009, for information about liability insurance, no-fault insurance, and workers' compensation.

    https://www.cms.hhs.gov/MandatoryInsRep/

  5. #5
    Join Date
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    Default Re: C&R Settlement & Private Disability Providers

    1. I know she is going to be covered under spousal rules but here's what the IC carrier said:
    "What we would have to do if we reach a settlement is including this letter as an attachment and put language in the settlement documents that she is not eligible and if at any time she becomes eligible she understands that she must exhaust the settlement funds before pursuing treatment under Medicare for her work related injury."
    Sorry, that is not sufficient. The CA/IC and/or your attorney has to have your wife sign a release of information to SSA and get the records. That is the only way to protect your, and their interests/asses.
    If nothing else, the IC should get a "0" allocation letter from CMS to confirm the status of your wifes Medicare entitlement, and the allowing of that language. The IC isn't providing the accurate information. Not all CA's or attorneys are familiar with settlements under the new rules, or that include Medicare eligibility.

    Read through this bulletin...http://www.jjcelderlaw.com/SettlementProcessMSABull.htm, some will pertain to your claim, some may not. But you have to take the steps anyway, or see that someone does.

    what rule changes?
    Isn't the WC IC responsible for the CMS?
    If the VA WCC approves this settlement, how can we be held responsible?
    Everyone can be included in these issues with SSA/SSDI/Medicare etc.
    There is a lot of information here...http://www.jjcelderlaw.com/MMSEAMSABull.htm, additional bulletins here...http://www.jjcelderlaw.com/MSABulletin.htm
    and at the CMS site..www.cms.gov, and www.ssa.gov.
    As I said, there is much more to a comp settlement than figuring out the allocation between indemnity and medical.

    3. Got the STD/LTD IC letter on benefits and they have been paying a minimum amount that is required by policy since claim inception.
    As they are paying on a work related injury, they should continue. the amount will be adjusted as it is now based on the min/max benefits amounts taking into consideration income from other sources.
    They will take the WC indemnity, and IF she receives SSA based on your account, and the amount they pay to calculate the max she is entitled to.
    As I said though, ''contact'' isn't enough... you need to have everything the STD/LTD representative says in writing. Do not rely on any verbal ''confirmations''. You'd be surpised how fast those people are 'no longer working there'...

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