There is currently no policy that permits an individual with a Medicare Set-Aside (MSA) account to access or release funds during their lifetime, except for authorized expenses related to the original work injury covered by Medicare. This remains true even if an individual's condition improves.
Guidelines from CMS on Set-Aside Funds
The Centers for Medicare & Medicaid Services (CMS) does not allow the release or reduction of set-aside funds without its express approval. If a treating physician determines a beneficiary's condition has significantly improved, the beneficiary or their representative can submit a request to the appropriate CMS Regional Office (RO) for a reduction. This request must be accompanied by supporting documentation from the physician. The decision made by the RO is final and cannot be appealed.
Circumstances for Proposals to CMS
CMS outlines that if a new proposal is required due to significant health improvements, it must show at least a 25% reduction in the current WCMSA fund. Such proposals can only be submitted five years after a prior CMS approval and must include new supporting documents. If approved by CMS, any excess funds in the WCMSA may be released to the claimant.
WCMSA Account Restrictions
According to the WCMSA Reference Guide, funds in an MSA account can solely be used for medical treatments or prescriptions related to the work injury, which Medicare would otherwise cover. Unused funds at the end of a year are carried over to the next year, continuing until all funds are used appropriately.
In summary, while condition improvement may seem like grounds for reducing an MSA, CMS controls decisions about these funds, allowing access only for medical expenses related to the claim and covered by Medicare, irrespective of any health improvements the individual might experience.
For further details, please refer to the WCMSA Reference Guide.
