Medicare Set Asides (MSAs) can be daunting. The issue of settling with one can be so confounding that many injured parties avoid settling their workers’ compensation claims for fear of mishandling these accounts and jeopardizing their future Medicare benefits.
It is imperative that an MSA is managed according to the letter of the guidelines from the Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees Medicare. There are many moving parts, and a simple slip-up could mean the difference between lifetime medical coverage for an injury and losing future Medicare coverage for injury-related treatment if funds exhaust.
MSA: Who, What, When, Where
Congress created the Medicare Secondary Payer Act to ensure Medicare does not pay for medical services that are rightly the responsibility of another party, such as workers’ compensation.
“On July 23, 2001, CMS issued a directive memo, called the Patel Memo, indicating that Medicare’s interest MUST be taken into consideration for Workers’ Compensation cases,” explained Krista Johnson, CMSP. Senior Director of Special Programs for Ametros, during a webinar focused on sharing critical concepts individuals need to know about managing their Medicare Set Aside. “This is true for current Medicare beneficiaries, as well as those with a reasonable expectation of becoming a Medicare beneficiary.”
In response, Medicare Set Asides were created to outline and calculate the future Medicare-covered medical for an injured person over their remaining lifetime.
While there is no legal requirement to have an MSA, experts suggest it is among the best ways to protect future Medicare benefits, protect Medicare’s interest, and follow CMS policy.
While the idea of an MSA may seem straightforward, it actually is a conundrum of twists and turns. Ametros frequently hears from injured parties facing the challenges of the MSA, with comments such as:
“I got hurt on the job a few years back and had to set up an account. I didn’t know what to do so I have never touched it. Is there someone who can go over my file and see if I can take some of the money out without being penalized?”
“I will be receiving a workman’s comp settlement. I am on Medicare and SSD. Will all of the settlement money go into an account? Will I be able to use this money for anything else, such as housing or to fix my car? What will happen if I do use it for something else? Please advise. No one has told me anything.”
It is vital that injured parties who choose to self-manage their MSAs, or those who represent them have a clear understanding before they find themselves in such dire circumstances.
CMS has developed a variety of materials related to MSA set-up and maintenance. Among them are:
Medicare and You – the official U.S. Government Medicare handbook. Sent to all Medicare households each Fall, this includes a summary of Medicare benefits, rights, and protections; lists of available health and drug plans; and answers to frequently asked questions about Medicare.
Self-administration toolkit for workers’ compensation Medicare Set Aside Arrangements (WCMSAs). Also published by CMS, this booklet is invaluable for anyone considering managing an MSA account. It delves into the specifics of creating and managing an MSA. The toolkit:
- Describes the self-administration process and guidelines, from the set-up of the WCMSA bank account until all of its funds have been used
- Explains whom to work with to manage the WCMSA account
- Discusses the two types of WMCSA accounts: lump sum and structured
- Covers special circumstances, such as when an injured party’s Medicare beneficiary status changes
WCMSA Reference Guide. While CMS approval of MSAs is not required, it is considered a wise move to help protect all parties. This guide explains the process used by CMS for approving proposed MSA amounts and serves as a reference for those choosing to submit such amounts to CMS for approval.
MSA Self Administration Overview
A variety of steps are involved in administering an MSA. They include:
- Ensure MSA funds are deposited into an account that is compliant with all CMS requirements
- Notify medical providers of the WCMSA for appropriate billing
- Seek treatment for Medicare-approved medical items and treatments
- That the treatment is for the occupational injury only
- The treatment is covered by Medicare
- Accurate coding for the injury-related expenses
- The appropriate fee schedule has been applied
- If there is not enough money in the MSA to pay the healthcare provider, send attestation to CMS notifying of the exhaustion of funds (see below). Medicare will only step in to help provide additional coverage if the expenses leading up to exhaustion of the Medicare Set Aside account have been properly reported to CMS.
- If there is sufficient money in the MSA, pay the provider. Keep complete records for the annual Attestation or Exhaustion – whichever comes first
Follow CMS Requirements for the MSA
Among these are
- Place funds in a separate interest-bearing account where they cannot be comingled with other monies
- Pay medical bills according to state-specific workers’ compensation fee schedule or usual and customary rates to ensure providers do not overcharge
- Keep strict records of all expenses, treatment, dates of service and related medical codes and submit to CMS annually.
Failing to comply with these and other requirements can jeopardize future Medicare benefits.
Coordinate Medicare benefits with the MSA
An eligible injured party who does not have separate private insurance coverage must be enrolled in the Medicare plans needed in case the MSA funds exhaust. If MSA funds exhaust, the injured party must be enrolled in Part D to cover prescriptions.
Submit the Annual Attestation
This will include either
- Annual accounting of WCMSA, with information such as dates of service, method of payment, name(s) of medical provider(s), descriptions with corresponding ICD-9/10 codes, and the amount charged
- Accounting for temporary depletion of MSA or annuity funds, if the account’s funds have exhausted
While CMS “highly recommends” professional administration to manage MSAs, some professional administrators offer some of the benefits of their services while the injured party actually controls the account. For example, the injured party could reap the medical cost discounts offered by a professional administrator and use a special template to ensure compliant reporting.
For those who opt to work entirely with a professional administrator, they will not need to set up the initial account or handle bill review and paying medical providers directly themselves. Professional administrators also handle all coordination of care and provide a supportive resource long after settlement.
The MSA is a useful tool to ensure injured parties who settle their workers’ compensation claims have enough money to cover their medical expenses for the injury while still protecting Medicare’s interests. But failing to adhere to the requirements for MSAs after settlement can put the person in the crosshairs of the government and risk misspending needed money. Having a thorough understanding of the requirements and resources available before settlement can ensure injured individuals are protected.
A Resource to Help Protect Individuals Considering Self-Administration
If you’re looking to brush up on what’s required with managing a Medicare Set Aside or want to provide an individual with a resource that simply breaks down the components of Medicare Set Aside administration, Ametros has a free video resource package sharing 5 critical tips individual need to know about managing future medical funds. You can get access to the resource here.