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Workers' Comp.- MSA settlement is over a particular amount and I receive Medi-care, will SMA and CMS approval needed?

San Francisco, CA |

If settlement is over a particular amount and I receive Medi-care, is it mandatory for employer to get SMA and CMS approval, or can employer bypass those agencies and make their own decision? If they do is it legal? Can SMA and CMS disagree with what employer is offering in settlement, and increase or decrease amount needed for Medicare Set Aside?

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Attorney answers 3

Best Answer

There is no minimum threshold for a MSA if the Applicant is already a Medicare beneficiary.

Parties do have an obligation to "consider the interests of Medicare" in any settlement, to avoid cost-shifting. However, that does not necessarily require CMS submission/approval. CMS can disagree with any submitted MSA number, but a well-drafted MSA calculation is usually within 5-10% of another well-drafted MSA. Insurance Carriers are in the business of Risk Management; ALL MSA calculations are estimates, and I generally tell my clients that close is good enough.

If I submit 50K MSA to CMS and they counter with 55K because they prognosticate more X-Rays being needed, somebody has to find 5K or I have to convince CMS that people do not really get annual lumbar X-Rays for a post-surgical back. If I settle a case with an non-approved but well-drafted MSA at 50K, the Applicant is unlikely to burn the MSA money on annual lumbar X-Rays. I believe he is going to try and ration it out for NECESSARY medical treatment so that it lasts.

Reasonable minds differ on this issue, so you should follow the advice of your Attorney, who more accurately understands your specific facts and circumstances.

Attorneys are very competitive. Choose the Best Answer so we know who helped you the most.


There is actually no requirement that you get CMS approval on every MSA. Most attorneys don't know this and, in my experience, all insurance companies require the CMS approval. CMS approval can take up to a year!

If CMS comes back and says that the MSA needs to be bigger, it is always my position that the insurance company must make up the difference.

This MSA~CMS stuff gets pretty tricky and very technical. I recommend you get an attorney to work with you to make sure it's done right. That attorney can also advise you on whether or not it's in your interest to structure the MSA.

There are some great w.c. attorneys in S.F. Find a good one here at or at CAAA is the association for attorneys here in California who represent injured workers. Or you can call me for a referral. Good luck.


I agree with my colleagues. Do not worry about this.

If this information has been helpful, please indicate by clicking the up icon. Legal Disclaimer: Mr. Candiano is licensed to practice law in Illinois and Indiana. The response herein is not legal advice and does not create an attorney/client relationship. The response is in the form of legal education and is intended to provide general information about the matter within the question. Links: