A Capehart Scatchard Blog

CMS May Soon Adopt New And More Strict Guidelines On Approving Zero Allocation Medicare Set Asides

By on October 31, 2016 in Medicare with 0 Comments

A number of prominent Medicare experts disseminated Legal Alerts last week to the effect that changes may be occurring with respect to the requirements for CMS to approve zero allocations.  These changes would spell bad news in New Jersey for employers who want to settle disputed cases on a Section 20 basis.  According to Martin Cassavoy of ISO Claims Partners in his October 27, 2016 News Alert, the Workers’ Compensation Review Contractor (WCRC) has stated that CMS will soon require the following for approval of a zero allocation:

  • The case or the body part in question has been denied throughout the case;
  • There has been no medical or indemnity payment for the denied case or body part; and
  • There is either a finding from a hearing by the Judge of Compensation relieving the carrier of liability or a report from the treating physician recommending no future treatment.

No official enactment of these requirements has occurred to date, but if this is the new approach that CMS is going to adopt, it will be very hard for employers to obtain zero set aside allocations in New Jersey and other states.  Compensation judges in New Jersey have enormous caseloads.  They have not historically been actively involved in ruling on Medicare issues.  If a judge now has to determine that no compensable workers’ compensation claim exists, that will create a long back-up of trials on cases that were formerly resolved simply and efficiently by way of Section 20 settlements.

Attorney Heather Schwartz Sanderson, Esq., Chief Legal Officer for Franco Signor, LLC.,  wrote in her Alert: “Our recommendation has always been where the workers’ compensation claim is completely denied, no medicals have been paid, and the claim is settling on a compromise basis CMS approval is not recommended.”  Ms. Sanderson’s statement makes sense since Medicare would have been and would continue to be the primary payor in this situation.  Her reasoning is persuasive and should be considered by employers.  She argues that there should be no allocation for future medical care in the above situation.

Our office will continue to update clients if these changes are adopted by CMS.  Thanks to Marita Tortorelli, Assistant Vice President of PMA Insurance Companies for bringing this issue to the undersigned’s attention.




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About the Author

About the Author:

John H. Geaney, a shareholder and co-chair of Capehart Scatchard's Workers' Compensation department, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.


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