There is no policy or process which allows an individual with a Medicare Set Aside (MSA) account to access or release funds during their lifetime other than for what is authorized under Medicare’s policies, i.e. to pay for healthcare related to the underlying work injury that is otherwise covered by Medicare.
Prior to the Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide (created in 2013, and now up to version 3.1 as of May 11, 2020), the Centers’ for Medicare & Medicaid Services (CMS) would issue policy guidance and updates via ad hoc memoranda. Currently, however, all previous memos have been supplanted by the WCMSA Reference Guide. Per Sec. 1.0 in the WCMSA Reference Guide:
This guide reflects information compiled from all WCMSA Regional Office (RO) Memoranda issued by CMS, from information provided on the CMS website, from information provided by the Workers Compensation Review Contractor (WCRC), and from the CMS WCMSA Operating Rules. The intent of this reference guide is to consolidate and supplant all historical memoranda in a single point of reference. Please discontinue the reference of prior documents. (emphasis added).
In the April 21, 2003 CMS Memo, at Question / Answer #11 the following was addressed:
11) If a beneficiary or injured individual’s physical condition substantially improves, may the administrator of the Medicare set-aside arrangement release or reduce the amounts of the set-aside?
Answer: The administrator of the CMS approved Medicare set-aside arrangement cannot release or reduce the set-aside amounts without approval from CMS. If the treating physician concludes that the beneficiary's medical condition has substantially improved, then the beneficiary (or his/her representative) may submit a written request to the appropriate CMS RO asking for a reduction of the Medicare set-aside arrangement. This request must include supporting documentation from the treating physician(s). Once the RO receives all pertinent documentation, the RO will then evaluate the request and make a decision. The RO decision is final and not subject to administrative appeal.
In the subsequent July 11, 2005 CMS Memo, the above Q & A was replaced by the following:
Q10. Beneficiaries that Request Termination of a WCMSA Account – May a claimant have any or all of a WCMSA released for personal purposes under any circumstances?
A10. The administrator of the CMS-approved WCMSA should not release set-aside funds for any purpose other than the purpose for which the WCMSA was established without approval from CMS. However, if the treating physician concludes that the beneficiary’s medical condition has substantially improved, then the beneficiary (or the beneficiary’s representative) may submit a new WCMSA proposal covering future expected medical expenses. Such proposals must justify at least a 25% reduction in the outstanding WCMSA funds. In addition, such proposal may not be submitted until at least five years after a previous CMS approval letter and should be accompanied by all supporting documentation not previously submitted with the original WCMSA proposal. The CMS decision on the new proposal is final and not subject to administrative appeal. The above proposals shall be submitted to CMS c/o COBC. If CMS determines that a 25% or greater reduction is justified, CMS will issue a new approval letter. After CMS issues a new approval letter, any funds in the current WCMSA in excess of the newly calculated amount may be released to the claimant.
Notwithstanding the above, as noted previously here, the WCMSA Reference Guide (and Self-Administration Toolkit) are the controlling document(s) with respect to policies and procedures for WCMSAs. Again, “[o]nce your WCMSA account is set up, you can ONLY use it to pay for medical treatment or prescription drugs related to your WC claim, and ONLY if the expense is for a treatment or prescription Medicare would cover. This is true even if you are not yet a Medicare beneficiary (not yet enrolled in Medicare). Self-Administration Toolkit, Sec. 4.
“The goal of establishing a WCMSA is to estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for work-injury-related conditions during the course of the claimant’s life, and to set aside sufficient funds from the settlement, judgment, or award to cover that cost.” WCMSA Reference Guide, Sec. 3.0.
“If you have funds left over at the end of a year, they remain in the account and are carried forward to the next year. The following year, you will be able to use the annual deposit money as well as whatever was carried forward. If there is excess money in that next year, that too is carried forward, and the account is used in this manner until all the funds accumulated in it are appropriately used up. Self-Administration Toolkit, sec. 11.
In sum, there is currently no policy which allows for an individual to access or release funds from their MSA other than to pay for medical treatment or prescription drugs related to the underlying claim which are otherwise covered by Medicare. This is the case even if an individual’s healthcare improves and they don’t require use of their MSA funds.