Why you should consider having your MSA Professionally Administered
There is one correct way to administer your MSA (Medicare Set-Aside); but there are plenty of ways to screw it up! Mistakes in managing your MSA can have a huge impact because they may result in you running out of money quicker than you expected or in Medicare denying to cover your medical benefits.
Let us clear up some misunderstandings for you, your client, your family member, etc so you can make an informed decision about how to best manage your funds and avoid the most common mistakes that are made in self-administering an MSA. We have compiled the top 10 MSA administration mistakes we most commonly see from the most costly in the near-term to the most impactful in the long-run. Today, we’ll go over part one of a three-part series of posts and cover the top three mistakes we encounter in the first year or so of self-administration:
- Overpaying! When you self-administer your MSA you are paying retail prices on drugs, doctors’ visits, procedures and medical equipment instead of the much lower fee schedule.
- A professional administrator will make sure you save your money by only paying fee schedule or below.
In most states, an injured worker is required to pay the state fee schedule for their treatments even after settlement. However, providers do not know how to bill you at the fee schedule rates. Their billing department rarely knows that you have had a worker’s compensation settlement nor do they know Medicare’s guidelines for billing. If you do not calculate the fee schedule for each of your treatments and demand to be billed accurately, you will be overpaying! In short, paying anything other than fee schedule is a huge waste of your MSA money!
At CareGuard, we find that on average the fee schedule is 55 percent below what doctors actually bill at retail prices. Why pay $100 for a doctor visit when you legally should pay $45? Or in other words, why reduce your $100,000 MSA settlement to $45,000 dollars? A professional administrator like CareGuard automatically ensures you pay fee schedule on all your expenses, and often times even less.
The double impact of paying retail prices is that Medicare may review your reporting and determine that you spent through your money too quickly because you overpaid on your bills.
Medicare could then deny to provide your medical benefits until you make up the difference on what you overpaid! In other words, you may have to use your personal funds to pay the amounts you overpaid with your MSA funds again.
- Assuming that when your funds run out, Medicare or your private insurance will automatically cover 100% of your healthcare costs.
- This is not the case. You will be responsible for copays and deductibles. By keeping your expenses to a minimum a professional administrator makes it far less likely you will run out and face these expenses.
The settlement process has a lot of moving parts. Often times, we find that injured workers are told that when their MSA funds exhaust Medicare or private insurance will kick in and take care of everything. This is a huge misunderstanding.
First, you need to be actually enrolled in Medicare or private insurance and paying your premiums! If you did not enroll, you do not have coverage for anything but emergencies. If you are enrolled in a plan, when your funds run out, your insurance/Medicare will begin picking up the bills, but you will still need to contribute copays! In other words, once your MSA funds run out, your medical expenses are not 100% covered. Typically, you are expected to contribute around 20% of your medical costs.
This is why it’s important to have a professional administrator ensuring you do not overpay on your medical expenses, so that you never have to use personal funds to cover copays and deductibles once your MSA funds are gone.
- Failure to enroll in Medicare or personal insurance altogether. Many injured individuals assume that having an MSA means they are setup on Medicare automatically.
- You need to enroll in a Medicare or private insurance plan to have coverage if your funds run out. A professional administrator will guide you through the plans that are required or a good fit for your situation.
Regardless of your settlement, as mentioned above, you need to be enrolled in Medicare or a private insurance plan and paying your premiums so that they know to cover you as a beneficiary for any and all of your healthcare needs. Medicare has an open enrollment period from October 15th to December 7th and most private plans have an open enrollment period from November 1st – January 31st. You also may be able to take advantage of a special enrollment period – check with Medicare or your plan to see if you’re eligible.
While Medicare Part A (emergency visits) does not require enrollment, Part B (regular doctor visits), C (private Medicare plans) and D (prescription drugs) all have monthly premiums you must pay and require that you actively elect to enroll. If you do not enroll in a plan, when your MSA funds exhaust, you will have to pay your healthcare costs out-of-pocket. By the way, you are legally required to have insurance so if you do not enroll you may also have to pay a fine when tax season comes around.
At CareGuard, we work closely with each injured individual when they come onto our platform to make sure they get themselves a plan to be covered for any potential costs once their MSA exhausts. One extra insurance protection that many of members ask about is Medicare Supplement plans. These supplement plans kick in to cover many copays and the costs of extended hospital visits. CareGuard works with a partner to provide guidance on all Medicare plans as well as supplement plans to make the question of coverage easy to the injured individual.
We hope this post helps you, your clients or your family be aware of the top three mistakes we see injured individuals make in the first year of self-administering their MSA. Ametros’ premier product, CareGuard provides professional administration of the MSA and will help you avoid all of these mistakes and make the process easy. Ametros also offers a self-administration service, called CareAssist that provides support to folks that still want to self-administer.
Next week we’ll continue with mistakes number 4-7.