Guidelines for Medicare set-aside agreements include: Individuals must deposit the funds in a separate interest-earning bank account. Money in a WCMSA account must go toward future medical expenses related to the work-related injury or illness.
- Funds must be held in an interest-bearing account.
- Use the fund only for treatments related to the injury.
- Use the fund only for Medicare–covered expenses.
- Pay according to the appropriate fee schedule.
Can I get the money from a Medicare set aside?
Using a Medicare set-aside arrangement, you can set aside the money you’ll need for treatment. The money in your Medicare set-aside arrangement will then be used to pay for the care you need as a result of your injury or illness. Common expenses include:
How long does it take to get Medicare set aside?
The process typically begins with a referral to a Medicare set-aside vendor or consultant. Most vendors and consultants can complete the Medicare set-aside allocation within a week or two of receiving a copy of the medical records and prescription history.*
Can you spend your Medicare set aside money?
The most important thing you need to know about your Medicare Set-aside Account is that you are not free to spend that money however you want – and you are not even free to spend it on every medical need you may have for your injury.
How does the Medicare Set Aside (MSA) work?
- Having to pay back any amount you paid over the approved Medicare price or in violation of Medicare’s rules;
- Medicare’s denial of bills for your injury until you have paid back any improperly spent funds; and
- Jeopardizing your entitlement to future Medicare benefits for your injury.
Can I manage my own Medicare set aside?
Medicare beneficiaries may choose to self-administer their CMS-approved WCMSA or have it professionally administered on their behalf.
How does a Medicare set aside work?
A Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) is a financial agreement that allocates a portion of a workers' compensation settlement to pay for future medical services related to the workers' compensation injury, illness, or disease.
What happens to Medicare set aside?
Settlement funds are 'set aside' in a special account to pay claimants' future medical treatment and service costs. Once the funds are exhausted, Medicare will begin paying for the injured person's qualified medical expenses.
Is Medicare set aside taxable?
In most cases, the entire amount paid out in a personal physical injury settlement is non-taxable. So, your MSA funds, as part of that settlement are also not taxed upon receipt. The injured party is responsible for taxes on interest earned on their MSA funds.
What is an MSA payment?
An MSA is a financial arrangement that allocates a portion of a settlement, judgment, award, or other payment to pay for future medical services. The law mandates protection of the Medicare trust funds but does not mandate an MSA as the vehicle used for that purpose.
How long is CMS approval good for?
CMS has issued a conditional approval/approved WCMSA amount at least 12 but no more than 48 months prior to filing of an Amended Review request. The case has not yet settled as of the date of the request for re-review.
What is a non submit MSA?
A Non-Submit Medicare Set-Aside (MSA), sometimes called an Evidence-Based MSA, may be appropriate when the settlement does not meet the Centers for Medicare and Medicaid Services (CMS) Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) review thresholds or in situations where the settling parties have decided ...
Does Medicare cover on the job injuries?
If you have Medicare and file for workers' compensation, workers' compensation pays primary for any care related to your accident or injury. If workers' compensation does not make a decision about paying your health care bills within 120 days, Medicare may make conditional payments.
How do I set up an MSA?
You must open an MSA through your health plan provider. Your provider will then open your account with Optum Bank, Member FDIC. Your health plan provider will then deposit money into your account.
What happens to money left in a MSA at the end of the year?
Any money left in your account at the end of the year will remain in your account. If you stay with the Medicare MSA Plan the following year, the new deposit will be added to any leftover amount.
Is MSA required?
An MSA is never required, but workers' compensation insurance companies usually want to have this process completed as a way to prove no one is trying to shift the burden of medical treatment from private insurance to the public medicare system without some payments to medicare.
What is CMS approval?
CMS approvals are issued at a local level by the Medicare Administrative Contractor (MAC) or are reviewed an approved through a centralized process by CMS. Studies approved through the centralized process are listed here.
Who Administers the Medicare Set Aside Account?
MSA account administration may be performed by the injured person (self-administered) or by a professional administrator. The party who administers the MSA (individual or administrator) must keep accurate records of all disbursements from the account for CMS reporting.
Who must report Medicare set aside expenses?
Rules and Regulations. Medicare Set Aside account holders are required to report their expenditures on annual basis to the Centers for Medicare and Medicaid Services (CMS). They must hold on to all receipts in order to validate the expenses.
What are the Qualifications for an MSA?
CMS guidelines state that it will review new claims proposals for the following:
What Happens When the MSA Funds are Gone?
Once all Medicare Set Aside account funds have been exhausted, a final audit is performed on expenditures. If the funds were used appropriately, then the injured person should receive Medicare benefits for medical expenses related to the claim.
How Does the Injured Person Access MSA Funds?
For any expense, the account holder must keep detailed records and receipts.
What happens if you don't manage your MSA?
If account holders do not manage their MSA account properly, pay more than the approved amount for a service or treatment , or pay for non-allowable expenses from the account, they can face some serious repercussions, such as paying back the overages/improperly spent funds and jeopardizing future Medicare benefits.
What is MSA settlement money?
MSA settlement money is only for approved medical services and other costs directly related to the specific injury. MSA accounts must be interest-bearing and the interest must stay in the account to be used for medical expenses. Recipients should keep ALL records and receipts for every expense paid for from the account.
What is the recommended method to protect Medicare's interests?
The recommended method to protect Medicare’s interests is a WCMSA. The amount of the WCMSA is determined on a case-by-case basis. To assist you in determining if a WCMSA is reasonable, please review Section 15.1 (Criteria) in the WCMSA Reference Guide.
How to submit a WCMSA?
If you decide to submit a WCMSA for review, it can be submitted electronically through the WCMSA Portal (WCMSAP) or by paper/CD through the mail. The portal submission is the recommended approach for submitting a WCMSA as it is significantly more efficient than sending this information via the mail. For more information about this application, please see the WCMSAP page.
How to get notifications from WCMSA?
If you have not already signed up for these notifications, please enter your e-mail address in the “Receive E-Mail Updates” box at the bottom of this page . Next, select “Worker’s Compensation Agency Services” and any other topics you would like to receive notifications on. When notifications and new information, regarding WCMSA are available, you will be notified at the provided e-mail address.
Is WCMSA a CMS submission?
While there are no statutory or regulatory provisions requiring that a WCMSA proposal be submitted to CMS for review, submission of a WCM SA proposal is a recommended process. More information on this process can be found on the WCMSA Submissions page.
How much is set aside for Medicare?
Worker’s compensation Medicare set-aside arrangements (WCMSAs) are required if you receive $25,000 or more and are already enrolled in Medicare or plan to enroll within the next 30 months.
How is Medicare set aside funded?
Medicare set-aside arrangements are funded by settlements you receive from a worker’s compensation claim, liability lawsuit, or no-fault car accident claim.
When does Medicare kick in?
Medicare is always the secondary payer when another option, like a worker’s compensation or liability settlement, is available .
How will Medicare notify you of a decision?
Medicare will notify you by mail about the decision.
What happens if you get injured on Medicare?
If you’re enrolled in Medicare, the money from your settlement will pay for care related to that injury before Medicare does.
When do you have to notify Medicare of a set aside?
You must notify Medicare when your Medicare set-aside arrangement runs out.
Where does Medicare set aside money come from?
The money in your Medicare set-aside arrangement comes from one of three sources: settlement of a worker’s compensation claim. settlement of a liability lawsuit. settlement of a no-fault car accident claim.
What is a Medicare Set Aside?
A Medicare set aside ( MSA) is simply an account or trust that holds settlement proceeds. Medicare recipients who receive greater than $25,000 for a personal injury settlement or reasonably expect to enroll in Medicare within 30 months of a settlement of more than $250,000 need to consider Medicare Set Aside. Most likely, in the latter instance, an injured party will receive Social Security Disability Insurance benefits or Supplemental Disability Income after a 24-month waiting period. The 1980 legislation was to protect Medicare Trust Funds from several types of ongoing medical and liability claims. It also deemed Medicare the secondary insurance payer in those cases. The action was to shift costs from Medicare to private sources of payment. Consequently, money received due to a settlement gets segregated and spent for ongoing medical issues related to the liability. Medicare becomes the primary insurance payer once the segregated funds become exhausted. A workers’ compensation insurance company may partner with Medicare to request approval for the amount placed in the Set Aside Account. However, this union is not as copacetic as it sounds.
How can Medicare set aside mistakes be navigated?
Medicare Set Aside mistakes and benefits can be navigated through partnership with professional administration and qualified legal representation.
How are MSA Allocations determined?
The crucial first step is to hire a qualified attorney for representation in a Workers’ Comp or personal liability claim. A personal injury professional with a track record in Medicare Set-Asides and secondary payer compliance is an absolute necessity. As a first step, one can look to the Special Needs Alliance. The SNA is a national organization of law professionals with significant experience in disability and elder law. Trying to do this without proper legal support is where Medicare set aside mistakes occur. An MSA expert may be part of the team because there are many moving parts to consider, including the difficulty of extrapolating future medical costs from current records. Per Synergy Settlement Services, a company that specializes as analyst and connection to Centers for Medicare and Medicaid Services:
What is MSA in workers compensation?
Commonly, MSAs get established for Workers’ Compensation claims (WCMSA). In addition, they are used for personal liability settlements (LMSA). The sources of the liabilities may differ, but accounts get established to ensure Medicare is the secondary payer of future claims. Again, the requirement of MSAs is only for Medicare recipients or those eligible after a 30-month waiting period. In addition, recipients reimburse the federal government for medical expenses paid by Medicare before a settlement.
Does CMS maintain standards?
CMS maintains specific standards for creation and adherence to WCMSA guidelines and provides copious guides and instructions. However, as an administrator (could be self-administered) for allocated funds, whether lump sum or paid in an annuity structure, ongoing compliance is an ominous task. We’ll discuss this more later in the blog.
Does Medicare accept MSA allocations?
Medicare does not necessarily accept the allocation recommendation. If an MSA gets submitted to CMS for review/approval, Medicare could require more or less to be set aside than the amount suggested in the MSA allocation.
How to avoid Medicare set aside?
How to Avoid a Medicare Set Aside? The short answer is if your settlement includes future medical expenses and there’s likelihood a cost-shift could occur to Medicare (i.e. Medicare could reasonably be expected to pay for injury-related medicals), then it is not advised to attempt to avoid a Medicare Set Aside.
What is the only method CMS recommends to protect Medicare's interests?
CMS’s only recommended method to protect Medicare’s interests is a Workers’ Compensation (MSA). If parties to a settlement avoid incorporating an MSA, there are potential risks and exposure for this non-compliance. They include:
What is MSP in Medicare?
The MSP is federal law, including statutory, regulatory and policy provisions designed to prevent a cost-shift to the Medicare program. Medicare is overseen by the Centers for Medicare & Medicaid Services (CMS). CMS’s only recommended method to protect Medicare’s interests is a Workers’ Compensation (MSA).
What is a disregard of settlement?
Disregard of the Settlement - If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. See 42 CFR 411.46 (b) (2).
Can CMS refuse to pay for workers compensation?
Refusal to Pay – CMS has the right to refuse to pay for certain expenses related to the workers’ compensation injury until the entire settlement is exhausted. See WCMSA Reference Guide, v3.1, Sec. 3.
Is CMS bound by MSA?
CMS not bound by non-submitted MSA - If the parties to a Workers’ compensation settlement stipulate an MSA amount but do not receive CMS approval, then CMS is not bound by the set-aside amount specified by the parties, and CMS may refuse to pay for future medical expenses related to the work-related injury, even if they would ordinarily have been covered by Medicare. WCMSA Reference Guide, v3.1, Sec. 8
The History Behind Medicare Set-Aside Solutions
The Aranki vs. Burwell case evolved from a medical malpractice case that started in 2009 in Arizona. While a settlement had been reached, the defendants were still concerned about its finality due to the uncertainty of the MSA question.
Recent Developments
More critical insight is available in the 2011 Stalcup memo. A memo by Sally Stalcup, Regional Director of Region 6 for Medicare and CMS in Dallas. Her memo states that we must protect Medicare trust funds from payment for future service. Regardless of whether it’s Worker’s Comp. or liability.
What Comes Next?
Meanwhile, it’s important to decide whether, and which, Medicare Set-Aside solution is right for your client. That depends on their unique facts and circumstances. Also, whether they are a do-it-yourself or a do-it-for-you type. The law requires that we protect Medicare Trust Funds from payment for future services.
Let Us Help
Sign up to receive our 2 Ways to Avoid an MSA guide. Together, we can decide if one of these can work for you. And if your client can’t avoid an MSA and wants professional help? Then we’ll create a custom, strategically-minimized Medicare Set-Aside allocation. One brought down to the lowest possible, reasonable and defensible number.
Who sends final accounting to Medicare?
A final accounting needs to be sent to Medicare by the professional administrator (if there is one) or the claimant if they are self-administering the WCMSA funds.
What happens if you lose your WCMSA?
If the claimant loses his or her entitlement to Medicare after the WCMSA is established, claim ant cannot release these funds and they must still be used for injury-related Medicare-covered treatment.
Does Medicare take over a claim?
If the claimant is a Medicare beneficiary, Medicare takes over payment and, if not, claimant would have to pay these expenses out of pocket or utilize other healthcare options.
Can WCMSA funds be used for medical expenses?
WCMSA Reference Guide 3.2 Section 17.3 states that “WCMSA funds may only be used to pay for those expenses that would normally be paid by Medicare.” Medicare does not cover payment for treatment outside of the United States except for very limited circumstances i.e. emergency situations. As such, WCMSA funds cannot be used for this purpose. There may be other funding options available to the parties in these situations.
Does Bridge Pointe offer self administration?
However, Bridge Pointe has been offering self-administration support services to claimants as an alternative to professional administration for many years. The purpose of self-administration with support is to enable the claimant to have the freedom of self-administration and still have support with bill repricing, Medicare-coverage questions, attestation statement assistance, discounted treatment opportunities, assistant communicating with providers about the establishment and pricing of the WCMSA and much more.
Does WCMSA still apply?
Yes. All account management rules in administering the WCMSA would still apply.
Can WCMSA be used for injury related expenses?
According to Section 17.4.2 of the WCMSA Guide, the WCMSA may be used for injury-related Medicare- covered expenses prior to the claimant becoming a Medicare beneficiary. If the claimant loses his or her entitlement to Medicare after the WCMSA is established, claimant cannot release these funds and they must still be used for injury-related Medicare-covered treatment.
