A Structured MSA combines cash seed money equal to two years of related Medicare covered expenses and anticipated near term related major Medicare covered expenses (e.g. surgery anticipated next year, replacement of wheelchair) with annual structured annuity payments for the life expectancy set forth in the MSA.
Full Answer
What is a reasonable expectation of Medicare enrollment after settlement?
Medicare does allow for MSAs to be annuitized and will review and approve the seed amount (initial funding provided to the injured party) and annual payment amounts. If the MSA submitted to Medicare is approved as a lump sum, then it cannot be changed to an annuity unless it is re-submitted for approval.
What are Medicare set aside receipts?
A Structured MSA combines cash seed money equal to two years of related Medicare covered expenses and anticipated near term related major Medicare covered expenses (e.g. surgery anticipated next year, replacement of wheelchair) with annual structured annuity payments for the life expectancy set forth in the MSA.
How are patient service costs apportioned to Medicare beneficiaries?
May 03, 2021 · For example, an overall Medicare set-aside of $100,000 might break down to a $25,000 seed amount (with one surgery), with the remaining $75,000 placed in an annuity. Under the new rule, requiring the seed amount to include the first surgery for each body part does not change the overall MSA amount, but it puts more funds in the seed amount and less in the …
How is Medicare Set Aside (MSA) funded?
If the MSA is funded with a structured settlement annuity, the MSA is also funded with a lump sum amount called the “seed money”. This is an upfront cash distribution to be used for the first 1-2 years’ worth of expenses. The annuity payments typically will begin paying one year from the anniversary date of the settlement.
What are the rights of Medicare?
42 U.S.C. Sec 1395Y provides the following: 1 The Centers for Medicare and Medicaid Services' interest be protected 2 The Centers for Medicare and Medicaid Services have monetary rights against plaintiffs, plaintiff attorneys and plaintiff advisors when the services' interest is not protected 3 The Centers for Medicare and Medicaid Services have double recovery rights against insurance carriers, their legal counsel and their advisors when the interest of the services' is not protected
What are the rights of the Centers for Medicare and Medicaid?
The Centers for Medicare and Medicaid Services have monetary rights against plaintiffs, plaintiff attorneys and plaintiff advisors when the services' interest is not protected.
What is the Medicare Secondary Payer Act?
§1395y (b) Originally signed into law by President Jimmy Carter in 1980, the MSP currently requires in any case in which a person who is eligible for Medicare settles a personal injury, auto accident, or worker's compensation claim: Settlement must be reported.
What is the primary fund for Medicare?
Medicare considers the allocation to be the primary fund for paying Medicare covered expenses compensable to the injury. Once the allocation amount is exhausted, Medicare becomes the primary payor of the Medicare covered expenses for the compensable injury.
What is structured settlement?
Structured settlements are the most cost-effective way to fund a Medicare Set-Aside. A structured settlement annuity will always save money over a straight cash MSA, regardless of the type of annuity used. #structuredmsa #seedmoney.
How to show that settling parties are taking into account Medicare's interest?
A common way to show that settling parties are taking into account Medicare's interest is by the deposit of cash, into a dedicated interest bearing account, for the amount required to fund all related future Medicare covered medical expenses and Medicare covered prescriptions over the injured party's life. A Structured MSA is an alternative Workers ...
Does CMS mandate a specific mechanism to protect their interests?
However, CMS does not mandate a specific mechanism to protect their interests. CMS also emphasizes that "the law requires that the Medicare Trust Funds be protected from payment for future services whether it is worker's compensation or liability case.
What is a Medicare Set Aside?
A Medicare Set Aside (hereinafter MSA) is a tool that an injury victim can utilize to preserve Medicare benefits by setting aside a portion of the settlement money in a segregated account to pay for future Medicare covered items. The funds in the set aside can only be used for Medicare covered expenses for injury related expenses.
Conclusion
Medicare Set Asides are becoming more prevalent in settling worker’s compensation and liability claims. It is important to educate all parties on why they should consider protecting Medicare’s future interests. All parties should be very leery of MSA vendors who indicate a formal MSA is always required.
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.
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.
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 is Medicare set aside account?
A Medicare Set Aside account, also known as an MSA, is an important component of the workers’ compensation payment landscape. Here’s the essential information you need to know about who qualifies for them, how they work, approved expenses, etc.:
How does MSA fund work?
How Does the Injured Person Access MSA Funds? MSA funds are placed into an interest-bearing account. The account may have a linked debit card , or the account holder may withdraw funds for reimbursement for expenses related to the settlement. For any expense, the account holder must keep detailed records and receipts.
What happens when Medicare sets aside funds are exhausted?
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.
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 Medicare secondary payer compliance?
Medicare Secondary Payer compliance plays an integral part in every workers’ compensation claim management team’s processes. In order to run an effective claim team, everyone must be aware of these changes, legislation that could become law, and understand how it impacts their processes and procedures.
Can you appeal a Medicare set aside?
Changes to the Re-Review and Amended Review process. While there is no formal appeals process for reviewing a Medicare Set-aside, parties can re-submit the approved allocation for a second look under certain circumstances.