When is a Medicare Set Aside Arrangement Required?

Medicare’s interests must be considered in all settlements where future medical benefits are being finalized via settlement. The appropriate method of considering Medicare’s interests is through the use of a Medicare Set Aside Arrangement.

The following is workload threshold for CMS review only and does not release the primary payer’s responsibility to consider Medicare’s interests:

Centers for Medicare/Medicaid Services (CMS) Threshold for Review of a Medicare Set Aside Arrangement Proposal

If a primary payer is settling future medical benefits for an individual meeting the following CMS review thresholds, a Medicare Set Aside Arrangement is appropriate in order to properly consider Medicare’s interests.*

  • The individual is a Medicare beneficiary at the time of settlement and the total amount of the settlement** is greater than $25,000;
  • Or the individual is not a Medicare beneficiary at the time of settlement, but the total settlement is greater than $250,000 and there is reasonable expectation of Medicare entitlement within 30 months of the settlement date.
Reasonable Expectation of Medicare Entitlement within 30 months of settlement includes but is not limited to:
  • Claimant is receiving Social Security Disability benefits at the time of settlement
  • Claimant has applied for Social Security Disability benefits or has applied and been denied, but anticipates appealing the decision
  • Claimant is in the process of appealing and/or re-filing for Social Security Disability benefits
  • Claimant is age 62.5 or greater at the time of settlement
  • Claimant has End Stage Renal Disease (ERSD) condition, but does not yet qualify for Medicare based on ERSD

*Medicare’s interests must be considered in all settlements where future medical benefits are being finalized via settlement. The appropriate method of considering Medicare’s interests is through the use of a Medicare Set Aside Arrangement. **The total settlement includes but is not limited to wages, attorney fees and costs, all future medical expenses, repayment of any Medicare conditional payments and any previously settled portion of the claim.

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