[Code of Federal Regulations]

[Title 42, Volume 2]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 42CFR411.47]



[Page 393-394]

 

                         TITLE 42--PUBLIC HEALTH

 

                    CHAPTER IV--CENTERS FOR MEDICARE

                          & MEDICAID SERVICES,

                        DEPARTMENT OF HEALTH AND

                             HUMAN SERVICES

 

PART 411_EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT

--Table of Contents

 

  Subpart C_Limitations on Medicare Payment for Services Covered Under 

                          Workers' Compensation

 

Sec. 411.47  Apportionment of a lump-sum compromise settlement of a 

workers' compensation claim.



    (a) Determining amount of compromise settlement considered as a 

payment for medical expenses. (1) If a compromise settlement allocates a 

portion of the payment for medical expenses and also gives reasonable 

recognition to the income replacement element, that apportionment may be 

accepted as a basis for determining Medicare payments.

    (2) If the settlement does not give reasonable recognition to both 

elements of a workers' compensation award or does not apportion the sum 

granted, the portion to be considered as payment for medical expenses is 

computed as follows:

    (i) Determine the ratio of the amount awarded (less the reasonable 

and necessary costs incurred in procuring the settlement) to the total 

amount that would have been payable under workers' compensation if the 

claim had not been compromised.

    (ii) Multiply that ratio by the total medical expenses incurred as a 

result of the injury or disease up to the date of the settlement. The 

product is the amount of the workers' compensation settlement to be 

considered as payment for medical expenses.



    Example: As the result of a work injury, an individual suffered loss 

of income and incurred medical expenses for which the total workers' 

compensation payment would have been $24,000 if the case had not been 

compromised. The medical expenses amounted to $18,000. The workers' 

compensation carrier made a settlement with the beneficiary under which 

it paid $8,000 in total. A separate award was made for legal fees. Since 

the workers' compensation compromise settlement was for one-third of the 

amount which would have been payable under workers' compensation had the 

case not been compromised ($8,000/$24,000=\1/3\), the workers' 

compensation compromise settlement is considered to have paid for one-

third of the total medical expenses (\1/3\x$18,000=$6,000).



    (b) Determining the amount of the Medicare overpayment. When 

conditional Medicare payments have been made, and the beneficiary 

receives a compromise settlement payment, the Medicare overpayment is 

determined as set forth in this paragraph (b). The amount of the 

workers' compensation payment that is considered to be for medical 

expenses (as determined under paragraph (a) of this section) is applied, 

at the workers' compensation rate of payment prevailing in the 

particular jurisdiction, in the following order:

    (1) First to any beneficiary payments for services payable under 

workers' compensation but not covered under Medicare.

    (2) Then to any beneficiary payments for services payable under 

workers' compensation and also covered under Medicare Part B. (These 

include deductible and coinsurance amounts and, in unassigned cases, the 

charge in excess of the reasonable charge.)

    (3) Last to any beneficiary payments for services payable under 

workers' compensation and also covered under Medicare Part A. (These 

include Part A deductible and coinsurance amounts and charges for 

services furnished after benefits are exhausted.)



The difference between the amount of the workers' compensation payment 

for medical expenses and any beneficiary payments constitutes the 

Medicare overpayment. The beneficiary is liable for that amount.





[[Page 394]]





    Example: In the example in paragraph (a) of this section, it was 

determined that the workers' compensation settlement paid for $6,000 of 

the total medical expenses. The $18,000 in medical expenses included 

$1,500 in charges for services not covered under Medicare, $7,500 in 

charges for services covered under Medicare Part B, and $9,000 in 

hospital charges for services covered under Medicare Part A. All charges 

were at the workers' compensation payment rate, that is, in amounts the 

provider or supplier must accept as payment in full.

    The Medicare reasonable charge for physicians' services was $7,000 

and Medicare paid $5,600 (80 percent of the reasonable charge). The Part 

B deductible had been met. The Medicare payment rate for the hospital 

services was $8,000. Medicare paid the hospital $7,480 ($8,000--the Part 

A deductible of $520).

    In this situation, the beneficiary's payments totalled $3,920:



Services not covered under Medicare............................   $1,500

Excess of physicians' charges over reasonable charges..........      500

Medicare Part B coinsurance....................................    1,400

Part A deductible..............................................      520

                                                                --------

      Total....................................................    3,920





    The Medicare overpayment, for which the beneficiary is liable, would 

be $2,080 ($6,000-$3,920).