Client Solutions

Medicare Set-Asides

A Medicare Set-Aside Arrangement (MSA) is the method designated by the Centers for Medicare & Medicaid Services (CMS) to be used when settling certain workers' compensation (WC) claims in order to be in compliance with the Medicare Secondary Payer (MSP) Statute: 42 U.S.C. §1395y(b)(2). The MSA is a portion of the WC settlement proceeds that is "set-aside" by the WC claimant to pay future medical expenses resulting from the industrial injury. The amount of the MSA is calculated to cover the work-related future medical expenses that would otherwise be paid for by Medicare. This amount is determined through the analysis of the medical reports and the claim payment history and should be sufficient to cover the claimant's estimated life expectancy.

A WC settlement that meets the CMS Review Threshold must have the MSA reviewed and approved by CMS. However, under the MSP law, Medicare's interests must be taken into consideration when settling any WC claim. Thus, an MSA would also be appropriate in certain settlements even though CMS review is not required. Upon settlement of the workers' compensation claim, the MSA funds are to be placed in a separate interest bearing account and can only be used to pay for injury-related services that would otherwise be covered by Medicare. The rationale behind the law is to prevent attempts to shift the burden of medical expenses for work-related conditions to Medicare.

The consequences for failure to comply with the statute by not taking Medicare's interests into consideration can result in a claim by Medicare against any entity including the employer, insurance carrier or TPA to recover payment. CMS may recover double damages if it is necessary to take legal action to recover from the primary payer. In addition, failure to provide an MSA when appropriate could result in a loss of Medicare benefits to the injured worker.

Coventry Workers’ Compensation Services (“CWCS”) has formed a strategic partnership with Crowe Paradis Services Corporation (“CPSC”) to provide expert Medicare Secondary Payer compliance to the property and casualty industry. With recent increases in settlement costs prompted by the changes to the Medicare Secondary Payer Act, the combined value of advocacy and expertise at settlement has never been more critical. The partnership capitalizes on the strengths of both organizations to the mutual benefit of their existing customers. CPSC exclusively provides MSP compliance services for CWCS clients, including Medicare Set-Aside Allocations, Conditional Payment Discovery and Negotiation Services, and Section 111 Reporting Services. CWCS continues to provide both CWCS and CPSC an opportunity to maximizing savings through their Drug Utilization Advisory and Prescription Peer-to-Peer (P2P) programs.

Click here for more information on the partnership >>