State of Connecticut Workers' Compensation Commission

MEMORANDUM NO. 2019-13

Findings and Awards by Stipulation with allocations for future medical expenses, including Medicare Set-Asides, or with allocations of indemnity benefits.

 

TO: Commissioners, District Administrators, Advisory Board, Legal Advisory Panel, Self-Insureds, Insurance Carriers, Attorneys, and Unions
FROM: Stephen M. Morelli, Chairman
DATE: October 7, 2019
RE: Findings and Awards by Stipulation with allocations for future medical expenses, including Medicare Set-Asides, or with allocations of indemnity benefits.

 

In order to rationalize and simplify the preparation of findings and awards by stipulation (hereinafter “stipulations”) where a portion of the proceeds is allocated for future medical expenses, including Medicare Set-Asides, the Commission has determined that the following guidelines will apply:
 

  1. Required provisions in each stipulation in which a Medicare Set-Aside is established in connection with the settlement of the claim:
  1. The Stipulation should contain a statement which addresses whether or not the claimant is (a) receiving or applied for or is appealing a denial of Social Security Disability Insurance Benefits or (b) receiving Medicare or there is a reasonable expectation of the claimant's becoming eligible for Medicare within thirty months of the settlement.
     
  2. A provision should be included confirming that the interest of the Centers for Medicare and Medicaid Services (“CMS”) with respect to future Medicare payments has been considered and reasonably addressed in the finding and award by stipulation.
     
  3. A provision should be included which sets forth the respective responsibilities of the parties for reimbursement of conditional payments for the expenses of medical treatment for the claimed or accepted condition(s) enumerated in the stipulation known or likely to have been made by CMS or a Medicare Advantage Plan or its equivalent, and which requires each party to cooperate with the other party or parties in promptly obtaining the amount of conditional payments claimed by CMS or other payors entitled to reimbursement.
     
  4. Generally hold harmless language is disfavored. However, if in the discretion of the commissioner a provision is appropriate whereby one party holds harmless or indemnifies another party with respect to the reimbursement of such conditional payments, such provision should be printed in bold typeface, highlighted or underlined at the time the stipulation is signed or approved.
     
  5. Where a stipulation reflects the establishment of a Medicare Set-Aside, the stipulation should contain a provision which confirms that the claimant understands that before the cost of such medical service or prescription is submitted for payment to Medicare or a Medicare-equivalent plan, the claimant (or his or her designated third-party administrator, if applicable) is responsible for payment up to the amount of the Medicare Set-Aside for future medical services and prescription costs for claimed or accepted condition(s) enumerated in the stipulation, where such services would be covered and are otherwise reimbursable by Medicare or a Medicare-equivalent plan.
     
  6. Where a stipulation provides for periodic payments to the claimant, the stipulation must contain a provision which acknowledges that the respondent(s) will remain liable for the payment of such periodic payments, whether or not the respondent(s) transfer the obligation to make such payments to a third person or entity which is not a party to the underlying claim giving rise to the stipulation.
     
  7. Where a Medicare Set-Aside is being administered by a third party, a provision indicating both the claimant and respondent(s) have had input in the selection of said administrator.
     
  1. Permissible provisions in such stipulations.
  1. A provision may be included which confirms that the stipulation does not attempt to shift responsibility from the respondents to CMS or a Medicare Advantage Plan for the payment of work-related medical services or prescription costs which are covered and otherwise reimbursable by Medicare or a Medicare-equivalent plan.
     
  2. A provision may be included which states that the allocation for future medical expenses is agreed to by the parties and is found to be reasonable under the circumstances of the case. Any such provision may be rejected if it contains language stating the commissioner finds the allocation amount reasonable, absent the inclusion of an analysis, in the discretion of the commissioner, which adequately indicates why such allocation for future medical expenses is reasonable.
     
  1. Unacceptable provisions in stipulations concerning Medicare.
  1. No stipulation may include a provision which imposes upon an attorney an obligation to hold harmless, indemnify or defend a party to the stipulation.
     
  1. Coordination of stipulations with Social Security Disability Insurance Benefits.
  1. Where the claimant is eligible for or likely to be eligible for Social Security Disability Insurance Benefits, the parties to a stipulation must consider the impact of the stipulation on such benefits. A stipulation shall contain provisions allocating indemnity benefits in order to rationalize and clarify the coordination of workers' compensation benefits with Social Security Disability Insurance Benefits and other contractual or governmental supports systems.
     
  1. Commission policies with respect to Medicare Set-Asides and allocations for future medical expenses in stipulations.
  1. A stipulation may contain an allocation for future medical expenses, including an allocation which is intended to be a Medicare Set-Aside. Where a stipulation does not establish a Medicare Set-Aside, but where there is a reasonable basis to suspect that the claimant will become Medicare-eligible in the foreseeable future, the stipulation should specify the dollar amount of the proceeds of the stipulation which is paid in settlement of claims for future medical treatment.
     
  2. A commissioner may refuse to approve a stipulation which in the opinion of the commissioner unnecessarily requires the establishment of a Medicare Set-Aside.
     
  3. The Commission acknowledges that the interests of Medicare and CMS must be considered in certain cases even where the stipulation does not fall within the CMS thresholds for review of a proposed Medicare Set-Aside. In cases that do not fall within the CMS review thresholds and the stipulation reflects the establishment of a Medicare Set-Aside or an allocation for future medical expenses, the parties to the stipulation should be prepared to explain the basis for the amount(s) allocated for future medical expenses or for the Medicare Set-Aside. However, the Commission also recognizes that no Medicare Set-Aside or allocation for future medical expenses may be necessary in cases where future medical treatment is unlikely.
     
  4. The Commission recommends that if a Medicare Set-Aside is being established with some of the proceeds of the stipulation, and if the parties intend to end the respondents' liability for additional injuries, body parts or conditions which are not covered by the Medicare Set-Aside, that the parties consider dealing with the liability for these additional injuries, body parts and conditions in a separate stipulation.
     
  5. The commissioner will retain discretion to modify the above requirements, prohibitions and recommendations if necessary in unusual or exceptional cases.