9-27-11; The lawyers, adjusters and WC claims managers in the various WC systems across the U.S. are all setting up literally thousands of Medicare Set-Aside Trusts, as part of the ongoing...

In our humble view, the answer is “no one knows.” You may note below, if a claimant dies, the trust money is to be ‘disbursed pursuant to state law.’ We have no clear idea what that might mean but assume the trust money may be an asset in claimant’s estate. We are aware some carriers are trying to have reverter clauses in the trusts to have the money revert back if unused for the reasons intended. That isn’t common and to our knowledge, the concept hasn’t been tested in the courts in Illinois, Wisconsin or Indiana where we practice. It also requires continuing audits of injured claimants for years and possibly decades.


It appears there is a process that may allow the money to be spent for other purposes, after five years and under very limited circumstances. We are fairly confident the CMS claims folks aren’t going to want thousands of “can we have the money” applications from all the claimants. Whatever happens, we assure all attorneys you don’t want to “mess with CMS” and should follow the law closely.


From the CMS web site:

v  Beneficiaries that Request Termination of a WCMSA Account (Ref: 7/11/05 Memo Q10)

The administrator of the CMS-approved WCMSA should not release set-aside funds for any purpose other than the purpose for which the WCMSA was established without review from CMS. However, if the treating physician concludes that the claimant's medical condition has substantially improved, then the claimant (or the claimant's representative) may submit a new WCMSA proposal covering future expected medical expenses. Such proposals must justify at least a 25% reduction in the outstanding WCMSA funds. In addition, such proposal may not be submitted until at least five years after a previous CMS approval letter and should be accompanied by all supporting documentation not previously submitted with the original WCMSA proposal. The CMS decision on the new proposal is final and not subject to administrative appeal. The above proposals shall be submitted to:

c/o Coordination of Benefits Contractor
P.O. Box 33849
Detroit, MI 48232-5849
Attention: WCMSA Proposal

If CMS determines that a 25% or greater reduction is justified, CMS will issue a new approval letter. After CMS issues a new approval letter, any funds in the current WCMSA in excess of the newly calculated amount may be released to the claimant. Effective August 25, 2008, the July 11, 2005 memorandum at Question and Answer 10, entitled "Beneficiaries that Request Termination of a WCMSA Account," is rescinded.

What do you do if the money is sitting there and claimant passes?

v  Death of a Claimant Prior to Exhaustion of the Medicare Set-Aside Money (Ref: 4/21/03 Memo Q21)

Once the Regional Office (RO) and the contractor responsible for monitoring the claimant's case verify that all of the claimant's claims have been paid, then any amount left over in the claimant's WCMSA may be disbursed pursuant to State law. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period ranging from 15-27 months after the date of service.

If you have questions or concerns, Shawn R. Biery, J.D. has the M.S.S.C. certification and is available by email at sbiery@keefe-law.com.