Medicaid & Personal Injury Liens & Claims; Self Settled Trusts For Personal Injury, Wrongful Death & Worker Compensation

Medicare Third Party Liability, Secondary Payor Law, and Self Settled Trusts To Shelter WC and PI Awards

Special Trusts For Special Folks – Special Needs Trusts in Virginia (2014)

Worker Compensation Proceeds Exemption Pursuant to Virginia Code Section 65.2-531: the Apfel Bankruptcy Court Decision (United States Bankruptcy Court, Western District, Case No. 16-72070-SCS)

A very brief primer:

“CMS is responsible for protecting the Medicare program’s fiscal integrity and ensuring that it pays only for those services that are its responsibility. Medicare Secondary Payer (MSP) provisions make Medicare a secondary payer to certain non-group health plans (NGHPs), which include liability insurers (including self-insured entities), no-fault insurers, and workers’ compensation entities. CMS has the right to recover Medicare payments made that should have been the responsibility of another payer.

MSP situations involving NGHPs are triggered by … car accidents or work-related injuries, involve Medicare beneficiaries, and result in medical expenses for which an NGHP (rather than Medicare) has primary responsibility for payment. In these situations, Medicare becomes a secondary payer.”

Statutes, Regulations, and Register Resources

“Pursuant to 42 U.S.C. 1395y(b)(2(B)(ii)/Section 1862(b)(2)(B)(ii) of the Act) and 42 C.F.R. 411.24(e) & (g), CMS may recover from a primary plan or any entity, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer that has received a primary payment,” accessed at CMS “Attorney Services” page, June 21, 2015. (Note: on June 21, 2015, page reported that it had last been modified: 07/09/2014 12:54 PM.)

Code of Federal Regulations:  42 CFR Parts 405 and 411

Federal Register Publication of Secondary Payer Rule Making

CMS Materials

Medicare Secondary Payer (MSP) Liability Insurance, No-Fault Insurance & Workers’ Compensation Recovery Process.

Coordination of Benefits & Recovery Overview.  This resource contains a table of useful links.

Medicare’s Recovery Process (2020)

CMS Attorney Resources.

How to first report a case.

Proof of Representation and Consent to Release.

Conditional Payment Information, including limits ($300.00 / $25,000) for review, self service options, and the Medicare Secondary Payer Recovery Portal link.

Self Settled Trusts To Insulate Virginia Personal Injury, Wrongful Death & Worker Compensation Proceeds

Worker Compensation proceeds are generally exempt from creditors’ claims pursuant to Virginia Code Section 65.2-531: the Apfel Bankruptcy Court Decision (United States Bankruptcy Court, Western District, Case No. 16-72070-SCS).

Personal injury and wrongful death claim proceeds are generally exempt from creditors’ claims pursuant to Virginia Code Section 34-28.1.

The self settled spendthrift trust provisions of the Virginia Trust Act may be useful to further insulate these proceeds, especially in light of the Apfel decision set forth above when the trust is qualified with an independent trustee.

See:

§ 64.2-742     Rights of beneficiary’s creditor or assignee
§ 64.2-743     Spendthrift provision
§ 64.2-744     Exceptions to spendthrift provision
§ 64.2-745     Certain claims for reimbursement for public assistance
§ 64.2-745.1   Self-settled spendthrift trusts
§ 64.2-746      Discretionary trusts; effect of standard
§ 64.2-747      Creditor’s claim against settlor

Third Party Materials

“Ignoring Medicare Set-Asides Puts [Medicare] Coverage at Risk,” Mayo and Poland, Special Needs Alliance

Medicare Secondary Payor Case:

Laska and CMS v. General Casualty Company (March 14, 2013, Wis. Ct. App).