Following resolution of a workers' compensation claim that includes payment for future medicals – usually in the form of a Medicare Set Aside (MSA) – injured workers who attempt to administer their funds potentially face struggles and risks in going it alone. CMS “highly recommends” the use of a professional administrator to manage and administer an MSA. See Workers' Compensation Medicare Set-Aside (WCMSA) Arrangement Reference Guide, v3.1, Sec. 17.1. This recommendation is for good reason. As will be explored here, at a minimum, administering an MSA requires knowledge and understanding of Medicare guidelines, diligent record keeping and execution on complex attestation reporting. Deficiencies in any one of these areas may cause disruption in care, compromise an individual's Medicare benefits or result in denial of payment.
Misspending & Mismanagement of Funds
An MSA allocates funds to pay for post-settlement treatment related to work injuries which are otherwise covered by Medicare. See WCMSA Reference Guide, v3.1, sec. 3.0. In a self-administered situation, without guidance and education around the fundamental intent of an MSA, there's risk of an injured worker misspending and mismanaging their funds. The adage in the industry is there's always a concern an injured worker may use their MSA to “buy a boat.” If misspending or mismanagement of the MSA funds occur, Medicare benefits may be compromised and treatment could be denied. There are instances where injured individuals are under the mistaken assumption that they can utilize their MSA funds for anything they want.
“If payments from the WCMSA account are used to pay for services other than Medicare-allowable medical expenses related to medically necessary services and prescription drug expenses for the WC settled injury or illness, Medicare will deny all WC-injury-related claims until the WCMSA administrator can demonstrate appropriate use equal to the full amount of the WCMSA.” WCMSA Reference Guide, v3.1, sec. 17.3.
When an MSA is submitted to the Centers for Medicare & Medicaid Services (CMS) for review, the injured worker must authorize this through signing a Consent to Release (CTR) form. To place an emphasis on an individual's understanding of an MSA, as of April 1, 2020, CMS now requires all CTRs to “include language indicating that the beneficiary reviewed the submission package and understands the WCMSA intent, submission process, and associated administration. This section of the consent form must include at least the beneficiary's initials to indicate their validation.” See WCMSA Reference Guide, v3.1, sec. 10.2.
Incomplete Recordkeeping
CMS maintains detailed recordkeeping requirements for tracking and maintaining documentation relative to an MSA. These include:
- Maintaining proper records and accounting of the MSA
- For every transaction with the account, the following needs to be tracked:
- Transaction date
- Check number
- Payable to or health care provider name
- Date of service
- Description (procedure, service, or item received, deposit, interest, other allowable expense)
- Amount paid
- Any deposit amounts
- Account balance
See Self-Administration Toolkit for Workers' Compensation Medicare Set-Aside Arrangements, v1.3, sec. 7. Failing to properly maintain and account for the above records and transactions can result in deficient attestation reporting. This in turn could negatively impact the individual's Medicare benefits.
Failing to Properly or Timely Submit Attestation Information
Attestation is reporting to Medicare providing an accounting and certifying that MSA funds were spent properly. Attestations must be sent to the Benefits Coordination & Recovery Center (BCRC) annually within 30 days of the anniversary of settlement. Additional attestation reports must be provided if a structured or lump sum account has permanently exhausted, or if a structured account has temporarily depleted. See Self-Admin Toolkit, v1.3, sec. 8.
Attestation reporting includes:
- Total spent for medical services
- Total spent for prescription drugs
- Grand total of expenditures
- Total of interest income the account earned, if any
- Balance of WCMSA account at the end of the calendar year
See Toolkit at sec. 8. It's of note that individuals and professional administrators can now transmit attestation information electronically via the Workers' Compensation Medicare Set Aside Portal (WCMSAP). Regardless of how annual attestation is submitted, however, it is critical that it is accurate and timely. Submission of inaccurate or delinquent attestation information could put an individual's Medicare benefits at risk and cause Medicare to deny payment for otherwise legitimate treatment.
In sum, an individual attempting to administer their post-settlement funds on their own may likely face difficulties and potential risks in disruption of care and denial of service. Utilizing a professional administrator can remove these risks and the burdensome activities associated with administering an MSA to ensure continuity of care, Medicare compliance and that the life of the fund is maximized. Professional administration also provides support, education and guidance to the injured individual and peace of mind to settling parties that the funds will be managed appropriately.
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