Why you should consider having your MSA Professionally Administered
We’re back with part two of our three-part series on mistakes to avoid when administering your MSA. In our last post [Part I], we focused on the top three near-term, most costly mistakes we see.
Today, we turn our focus to a number of issues that can occur in the usage of the funds over time that can cause major reporting problems. There are quite a bit of details to pay attention to in the process of using your MSA funds to secure the care you deserve. Our team identified several issues that over the medium to long-term will likely result in your MSA reporting being inaccurate and your Medicare benefits in jeopardy.
- Believing that Medicare will play some part in managing the billing of your MSA
- Medicare does not receive your bills and verify information. A professional administrator will do this for you, but if you are self-administrating it is your responsibility. Medicare only sees what you’ve sent in as your annual report.
Many injured individuals we speak to wrongly think that their medical bills after settlement will go directly to Medicare and that the MSA is set up only to pay their copays or deductibles. This is a dangerous misunderstanding, because it means that you may be trying to bill Medicare for the injury and Medicare will most likely reject paying for it. It also means you may be underestimating the cost of your treatments.
Instead, remember that as long as you have funds in your MSA you are responsible for collecting the bills and paying for them in full. Medicare will rely on your annual reporting to see that you did the right thing.
To clarify how you will pay for bills with your MSA, let's look at an example. For the average person, let’s say a procedure would cost $100 total, both at the Medicare reimbursal rate and workers compensation fee schedule (to simplify things). The average Medicare beneficiary would contribute a $20 dollar copay to the cost and Medicare would cover the remaining $80. An MSA account holder, on the other hand, will need to pay the full $100 out of their MSA funds. Only once their MSA is exhausted, do they contribute just the copays alongside Medicare like any other Medicare beneficiary would.
- Using your MSA funds to pay for medical expenses that are unrelated to your injury or not Medicare-covered
- A professional administrator verifies that each medical expense is Medicare eligible and will go the extra mile with you and your doctors to document relatedness.
Many injured individuals view their MSA as a pool of funds that they can use for their medical care in general, or at least for any type of expense that arises from their injury. In reality, Medicare’s guidelines are very specific. Medicare requires that you only use the MSA funds to pay for the entire cost of medical treatments that are A) related to your injury and B) would be covered under Medicare. At CareGuard, our team receives constant questions about whether medical treatments meet both requirements.
First, it’s important to have your doctor verify that medical treatments are causally related to your injury, and to keep their notes on file. Injuries to one body part can affect other areas of the body and often individuals with MSAs do not recognize the relatedness and document properly how and why they spent their funds on certain treatments. For instance, a knee injury may trigger a hip problem that requires hip surgery. When it’s related to your injury and Medicare would cover it, it should be paid for with the MSA. It’s best to document this so that if Medicare questions you, you have all the records handy. Also, if you fail to use your MSA funds for a procedure that is related, you run the risk of Medicare denying it.
Next, it’s equally as important to verify that Medicare would cover for the expense. Often times, injured individuals are caught off guard that expenses like transportation, long-term care facilities, many compound creams, and over-the-counter products are not covered by Medicare. Many folks who self-administer try to rely on the Medicare & You guide to see if they can determine what is covered, but often times, it’s a challenge to get specific feedback on the exact expense in question. At CareGuard, we’re verifying thousands of bills per month automatically so there is no ambiguity and more importantly, no hassle for you to do the research.
- Using your MSA funds to pay for copays, deductibles, premiums or administrative fees.
- Copays, premiums and administrative fees are not allowable uses of your MSA funds. A professional administrator ensures that all payments out of your MSA are for eligible costs and will block any such expenses.
Medicare guidelines dictate that the MSA funds are not to be used for any co-pays, deductibles, premiums, or any administrative fees. It’s important to note as well that if you have an annuitized MSA, then you may think that once your MSA funds arrive, you can use them to pay a backlogged bills for deductibles or copays related to your injury that you received from Medicare or your health plan. Medicare does not permit this either.
Some injured individuals purchase Medicare supplement plans to fortify any coverage gaps they may run into if their MSA funds exhaust. While this can often be a very good idea, Medicare does not allow you to use our MSA funds to pay the premiums for Medicare supplement plans, nor the premiums for any other plan (including Medicare Part B, C or D).
Medicare also does not allow use of the MSA funds to pay investment advisors or any other administrative service. At CareGuard, our administration fee for professional administration always comes from funds that are separate and apart from the MSA funds.
- Failure to coordinate with providers and pharmacists on which items to bill your MSA vs. your Medicare or private insurance plan. Staff at most pharmacy and provider offices has never heard of an MSA so there is often confusion about directing bills to be paid by the MSA or insurance plan.
- A professional administrator works hand-in-hand with your providers to ensure bills are routed and paid properly; they also catch and correct any bills that were misdirected.
As an individual self-administering your MSA, you are responsible for making sure you pay each bill properly with your MSA funds or route unrelated bills to your Medicare or insurance plan. It may sound simple, but often times, you will visit the pharmacy to pick up some medications that should be covered by your MSA and other medications that should go to your health insurance or Medicare. The same can happen with doctor visits. The same physician may be treating you for your injury and also for other ailments. It’s important to be very specific with your healthcare providers and their staff to make sure they are separating out the bills.
At CareGuard, we often see doctors’ offices or pharmacies incorrectly route bills to Medicare or insurance plans. These bills need to be reversed and paid for out of the MSA funds. On the other hand, we reroute bills that come in for payment out of the MSA that should go to the insurance plan. If you are self-administering, this bill administration tracking can be a huge hassle; it’s also a challenge to request that your insurance plan reverse bills or to try to secure a refund from your doctor if bills are routed improperly in a timely manner. At CareGuard, we routinely resolve billing issues so you don’t have to waste your time.
That’s it for today! We’ll be back in a couple of weeks with part three of our three-part series.