June 20, 2018 • Education

How Do I Protect My MSA Money?

money in jar
Your Medicare Set Aside (MSA) money is meant to pay for your future medical treatments and prescriptions for your injury throughout your lifetime. MSAs are created to “protect Medicare’s interests.” This means the Centers for Medicare and Medicaid (CMS or Medicare) expects you to spend your MSA money on your injury before Medicare will pay for any of your injury-related bills. Some folks compare MSAs to a deductible that you must show you spent properly before Medicare will begin coverage. To go into more detail, the money in your MSA must be fully spent on treatments that are related to your injury and that Medicare would have otherwise paid, also known as Medicare-covered items. In addition, Medicare is expecting reporting on the way you spend the MSA funds so that they can tell if and when to step in as primary payer for treatment related your injury. You should not attempt to send any medical bills related to your injury to Medicare before you have appropriately spent all of your MSA funds. Medicare will deny bills they receive unless they can verify that you have properly spent the MSA money and reported to them all the details. If you do not take Medicare’s interests into account with your settlement funds – meaning you either do not spend the MSA money on appropriate treatments, or you do not send in your reporting –  you could be jeopardizing your future Medicare benefits. It can be easy for folks to overspend on treatments or to pay for items that are not an eligible use of the MSA money. Attorneys and professional administrators have seen clients compromise their Medicare benefits. If you want to preserve your funds for as long as possible and protect your Medicare benefits, take precautions and be sure to seek resources that can help you with what can be a challenging process after settlement.

Preserving Your MSA Funds

A professional administrator can help build a comprehensive plan for you to manage your MSA funds. The administrator will track all of your expenses for secure-bookkeeping and provide access to medical discounts to help preserve your MSA funds. These discounts can help you save anywhere from 10-65% on your medical purchases. All of the savings will remain in the account and are available to pay for future treatments. A professional administrator can help you save money on doctor visits, prescription drugs, durable medical equipment and more. In addition, the administrator can help you find new providers, coordinate care, and serve as a resource for any questions you might have. Involving a professional administration service as early as possible is the best way to help get organized and ensure that you will capture these discounts. The administrator will make sure that if you spend all of your MSA money, Medicare will be ready to step in and begin paying for your ongoing bills.

Medicare Set Aside Rules

Medicare requires you to abide by their 6 main requirements:
  • Deposit the MSA money into an interest-bearing account
  • Use the MSA money only for treatments related to the injury
  • Use the MSA money only for Medicare-covered expenses*
  • Pay your medical bills according to the appropriate fee schedule or usual and customary price
  • Prepare and submit annual accounting report to Medicare on the anniversary date of your settlement and any interim reporting if your money runs out
  • Maintain line item detail for all of your MSA expenses for the duration of eligibility
When you do not comply with these requirements, you will jeopardize your future Medicare benefits. Repercussions include having your Medicare benefits for your injury denied and having to replace any misspent funds back into your account. The best way to ensure 100% compliance is to work with an experienced professional administrator and it is “highly recommended” by Medicare. *To see if your test, prescription, or any other item is or is not covered under Medicare, enter it on Medicare’s website.

I Spent My MSA Money Now What?

When your MSA funds have been fully spent and properly reported to Medicare, Medicare or private insurance will step in to pay for future medical care. This will only happen if you have previously enrolled in Medicare and paid your premiums. When Medicare steps in to pay for your ongoing care, your coverage will typically pay for about 80% of costs, and you will be responsible for roughly 20% towards co-pays/deductibles (note: this can vary based on plans the Medicare beneficiary has in place and can change by individual). This can be a widely overlooked step in the process, and many assume that Medicare or private insurance will automatically step in regardless of previous enrollment. You must enroll in Medicare during specific enrollment periods. In general, the best date to apply is within 3 months before or after your 65th birthday or during the general enrollments that occur between January and March each year. Missed your initial enrollment date? Although not guaranteed, those who have missed the initial enrollment period can attempt to use their spouse’s or another private insurance plan to cover expenses until they are able to enroll at the next available period. However, it is always best and ensures guaranteed coverage if you enroll within the right time frame.

Are There Resources to Help Me?

If you want to protect your funds and ensure your future medical care, there are resources designed specifically for your needs. Ametros’ trusted professional administration service, CareGuard, is the most popular administration solution available. It is important to note that Medicare “highly recommends” that you use a professional administrator to help you with the management and reporting of your MSA money. The administrator will help you remain in compliance with Medicare and also help you preserve your MSA funds so that they last as long as possible. With CareGuard, less than 3% of individuals run out of their MSA money in a given year, which means as a member of CareGuard you will likely never have to use Medicare for your injury-related treatment. CareGuard has also never had an issue with reporting to ensure that Medicare will step in and begin paying for member’s ongoing medical bills. If you are considering settling or have already settled and currently have an MSA account, Ametros can help -  protect yourself and your money. Contact us today!

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