Employment Settlement Agreement Medicare Language: What You Need to Know
When it comes to employment settlement agreements, it is important to ensure that the language used is clear, concise, and compliant with various laws, regulations, and policies. One area of particular concern is Medicare, as settlements involving certain types of claims may trigger reporting and reimbursement obligations under the Medicare Secondary Payer (MSP) rules.
What is Medicare Secondary Payer (MSP)?
MSP is a provision of the Social Security Act that requires certain payers, including employers and insurers, to pay for medical services only after Medicare has paid its share. When a settlement involves a claim for medical expenses that should have been covered by Medicare, the MSP rules require the settlement funds to be used to reimburse Medicare for those expenses.
What Should Employment Settlement Agreements Include?
To comply with the MSP rules, settlement agreements should include language that addresses the following:
1. Identification of Claims: The agreement should specifically identify any claims related to medical expenses that may have been covered by Medicare.
2. Medicare Set-Aside Arrangements (MSAs): If the settlement involves a claim for future medical expenses, the agreement should address whether an MSA is required. MSAs are funds set aside from the settlement for future medical expenses that would have been covered by Medicare. These funds are used to reimburse Medicare before any other medical expenses are paid.
3. Reporting Requirements: The agreement should address who is responsible for reporting the settlement to Medicare and when such reporting is required. In general, settlements over $750 must be reported to the Centers for Medicare and Medicaid Services (CMS) within a specified timeframe.
4. Indemnification: The agreement should include provisions for indemnifying the parties against any claims or demands by Medicare related to the settlement.
5. Medicare Acknowledgment: The agreement should include language acknowledging the parties` awareness of the MSP rules and their obligations under those rules.
Conclusion
Employment settlement agreements involving medical claims require careful consideration of the MSP rules and the potential implications for Medicare. Including appropriate language in settlement agreements can help ensure compliance with these rules and protect the parties involved from potential liability. It is always advisable to consult with legal counsel experienced in MSP compliance when drafting settlement agreements to ensure all necessary language is included.