Client Solutions

MSA Training

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, a 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 a MSA when appropriate could result in a loss of Medicare benefits to the injured worker.

Medicare Set-Aside Arrangement - When CMS Review & Approval is Appropriate:

CMS has established the following Review Thresholds indicating when a MSA is both appropriate and approval is needed when settling a Workers' Compensation (WC) claim that is closing out the future medical expenses:
1. If the claimant is already a Medicare beneficiary at the time of settlement, then a CMS reviewed MSA is appropriate when the total settlement amount is greater than $25,000, or
2. If the claimant is not yet a Medicare beneficiary then both of the following must be true for a CMS reviewed MSA to be appropriate:
a. The total settlement amount exceeds $250,000 AND
b. The claimant has a "reasonable expectation" of Medicare enrollment within 30 Months* of the date of settlement.

Medicare Set-Aside Arrangement - When Appropriate but CMS Review Not Needed:

The claimant is already a Medicare beneficiary but the total settlement amount is $25,000 or less.
The claimant is not yet a Medicare beneficiary but has a "reasonable expectation" of Medicare enrollment within 30 Months* of the date of settlement.
*Situations where an individual has a "reasonable expectation" of Medicare enrollment within 30 months include but are not limited to:
a) The individual has applied for Social Security Disability Insurance (SSDI) benefits;
b) The individual has been denied SSDI benefits but anticipates appealing that decision;
c) The individual is in the process of appealing and/or re-filing for SSDI benefits;
d) The individual is 62 years and 6 months old (i.e., may be eligible for Medicare based upon his/her age within 30 months);
e) The individual has an End Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD.

To arrange a Free Medicare Set-Aside training seminar, call Diane Yurkas at (818) 737-8650.