Question 1

What is a Medicare Set-Aside?

Accepted Answer

https://www.youtube.com/embed/gJ9SyWW1hZ4

In workers’ compensation cases, a Medicare Set-Aside (MSA) is crucial to protect Medicare's interests under the Medicare Secondary Payer laws. An MSA allocates part of a workers’ compensation settlement for future medical expenses related to the work injury, which are covered by Medicare. This ensures that Medicare does not pay for medical costs that the settlement is intended to cover.

Essential Elements of a Medicare Set-Aside

Medical Allocation: The MSA includes a detailed list of Medicare-covered treatments and prescription drugs. This list specifies the frequency, duration, dosage, and costs for the claimant's lifetime.

Sum to Structure: The MSA can be funded as a lump-sum payment or through a structured annuity. This provides flexibility in managing settlement funds.

Administration: While beneficiaries can manage their MSA funds, using a professional administrator is highly recommended to ensure compliance and efficiency.

Why is a Medicare Set-Aside Important?

An MSA ensures that Medicare remains the secondary payer in work-related injury cases. It preserves Medicare funds by preventing them from being used for expenses covered by the settlement.

Additional Resources

For more detailed information on MSAs and their specific regulations, refer to the Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, particularly sections 19.2, 9.4.4-9.4.6, 10, and 5.0.

Question 2

Can I spend my Medicare Set-Aside money?

Accepted Answer

https://www.youtube.com/embed/J5A4rLsco88

Once your Medicare Set-Aside (MSA) account is established, you can only use it to cover medical treatment or prescription drugs related to your workers' compensation (WC) claim. This spending is subject to Medicare guidelines, even if you're not yet enrolled in Medicare.

Is it illegal to spend Medicare Set Aside money?

No, however, spending MSA funds on non-covered items may lead to denied Medicare claims until proper usage of the full MSA amount is demonstrated. In other words: funds in an MSA are specifically allocated for treatments associated with the work-injury covered by Medicare. These funds can only be used for medical treatment or prescription drugs related to your workers' compensation claim.

Can I use MSA funds for over-the-counter medications and medical supplies?

Generally yes, but only if they're prescribed by a doctor or are directly related to your workers' compensation injury. Keep detailed receipts and documentation to prove the connection to your work-related condition.

What can I use my Medicare Set Aside account on?

What will happen if I spend my MSA funds on other expenses?

When funds from your MSA account are utilized incorrectly, Medicare may deny related claims. The account administrator must show appropriate use equal to the MSA amount for claim acceptance.

Detailed Guidance and Reference

For more detailed information, you can consult the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements and the Workers’ Compensation Medicare Set-Aside Reference Guide.

What is a Medicare Set-Aside?

What is a Medical Cost Projection?

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Question 3

What is a Medical Cost Projection?

Accepted Answer

https://www.youtube.com/watch?v=6JgpBw2_Eok

Purpose and Coverage

While both MCPs and MSAs involve funding for medical expenses, their purposes differ. An MSA is specifically for Medicare-covered services related to a particular injury. In contrast, an MCP is assigned for medical expenses that Medicare does not cover or that are unrelated to the injury.

Flexibility and Management

MCPs, sometimes known as "Non-Qualified" medical expense accounts or Medical Custodial Accounts when managed by professional administrators, offer more flexibility. They do not have Medicare reporting requirements and can cover a wider range of treatments.

Post-Exhaustion Payment

One key distinction is what happens when funds run out. With an MCP, if funds are depleted, Medicare does not automatically step in to cover expenses, unlike with an MSA.

Final Thoughts on Medical Cost Projections

For those settling claims that require prediction of future medical expenses beyond standard Medicare coverage, considering a Medical Cost Projection can be beneficial. MCP accounts are advantageous for their flexibility and ability to manage non-Medicare eligible medical costs. For more complex details, refer to specialized legal or financial professionals.

For further understanding, it may be helpful to consult additional resources or legal professionals regarding MCP specifics and implications in settlement agreements.

Question 4

When do you need a Medicare Set Aside?

Accepted Answer

A Medicare Set-Aside (MSA) is not mandatory but is a proactive measure to demonstrate that Medicare's interests were considered during a settlement. An MSA allocation report outlines items related to the injury that Medicare would cover. Submission to Medicare for approval is voluntary to ensure the allocated amount is accurate.

Understanding Medicare's Interests in Settlements

Under Section XVIII of the Social Security Act, interests of Medicare must be considered in injury settlements. Though not required, some parties might opt to create an MSA report detailing costs that Medicare would cover.

Voluntary Review by Medicare

Medicare offers to review these allocation reports when the injured party is, or soon will be, Medicare-eligible, and the amounts are significant. While Medicare review is voluntary, adhering to the following thresholds can make it beneficial:

The claimant is a Medicare beneficiary, and the settlement exceeds $25,000.
The claimant expects Medicare enrollment within 30 months from settlement and expects future medical expenses and disability/lost wages settlement to exceed $250,000.

Who Is Eligible for Medicare?

Individuals are eligible for Medicare after age 65 or if under 65 and receiving Social Security Disability Insurance (SSDI), with exceptions in certain cases.

For detailed insights about MSA processes and requirements, refer to guidelines or consult professionals experienced with the Social Security Act and related Medicare stipulations.

Question 5

What are the rules and regulations for the administration of Medicare Set Asides?

Accepted Answer

Injured parties managing Medicare Set-Asides (MSAs) must adhere to certain rules:

Use MSA funds exclusively for Medicare-covered treatments related to the injury.
Maintain funds in a separate, interest-bearing bank account.
Keep and organize all related bills and receipts.
Report expenditures to CMS annually or when funds are depleted.

Key Rules for MSA Administration

Adhering to MSA administration regulations is crucial. Here’s a breakdown of important points to remember:

Medicare-Covered Expenses: The primary rule is that MSA funds can only be used for expenses that Medicare covers, directly pertaining to the injury. This helps ensure continued Medicare coverage when MSA funds deplete.

Dedicated Bank Account: MSA funds should be stored in a separate, interest-bearing account to prevent commingling with other funds and simplify accounting.

Record Keeping: Maintaining accurate records is essential. This includes:
- Copies of all bills and receipts.
- Detailed reports of every expense funded by the MSA.

These records must be submitted to the Centers for Medicare and Medicaid Services (CMS) in an annual attestation.

Reporting and Compliance

Annual Reporting to CMS Regular reporting is mandatory to prove that MSA funds are used correctly. Failing to do so could lead to Medicare denial of injury-related treatments.

Depletion and Exhaustion Forms In cases where MSA funds are depleted:
- File a temporary depletion form for future annuity payments.
- Submit a permanent exhaustion form if funds are permanently exhausted.

Professional Administration

CMS highly recommends using professional administrators, like Ametros, to ensure proper management and reporting of MSA accounts. This can mitigate risks related to compliance and ensures government reports are accurate.

Further Details and Resources

For comprehensive guidance, refer to CMS' WCMSA Reference Guide and Self Administration Toolkit. These resources offer in-depth information on navigating MSA administration, ensuring compliance, and safeguarding your Medicare benefits.

Question 6

What happens when I exhaust my Medicare Set-Aside money? Will Medicare pay?

Accepted Answer

https://youtu.be/0nyPHc7JMJk?si=77Re51hp47TRSnvT

When your Medicare Set-Aside (MSA) funds are exhausted, Medicare will begin to pay for covered items related to your injury, provided that you have properly managed and reported your MSA spending to Medicare. Additionally, you must be enrolled as a Medicare beneficiary. If these conditions are met, Medicare covers you just like any other beneficiary, including the applicable co-pays, coinsurance, and deductibles.

Conditions for Medicare to Step In

Proper Management of MSA Funds: If your MSA funds are depleted according to Medicare’s guidelines, and you've reported your spending correctly, Medicare will become the primary payer for your future medical expenses related to the injury.

Requirements to Ensure Coverage

To qualify for Medicare to cover your injury-related medical expenses after your MSA is exhausted:

Enrollment in Medicare: You must be enrolled during an enrollment period.
Correct Management of MSA Funds: Adhering to Medicare’s rules for managing your MSA is crucial.

Failure to correctly manage and report your MSA funds may result in a denial of coverage for injury-related care. Incorrect handling might jeopardize your future Medicare benefits.

Steps if Coverage is Denied

If your care is denied, you must replenish your MSA account for any unaccounted expenses and correct reporting to Medicare. It may be helpful to consult a professional administrator for assistance in managing your MSA effectively.

For detailed information about the rules and proper management of your MSA, consider referring to the WCMSA Reference Guide.

Question 7

Is getting an official Medicare Set Aside report from a third-party vendor required?

Accepted Answer

In most cases, it is not necessary to obtain an official Medicare Set-Aside (MSA) report from a third-party vendor. An attorney, adjuster, or another involved party can determine the amount to be set aside. Many parties choose to work with a third-party vendor due to their expertise in adhering to Medicare’s guidelines, as well as their status as an independent party.

Why Choose a Third-Party Vendor?

Many choose third-party vendors for their expertise in MSA allocations. These vendors have specialized knowledge in following Medicare’s extensive guidelines, providing confidence in the accuracy and compliance of the MSA amount.

Can a Settlement Party Draft Their Own MSA?

Yes, a settlement party, such as an attorney or adjuster, can draft their own MSA. The decision typically depends on the complexity of the case and confidence in understanding Medicare’s requirements.

Where to Find More Information

For detailed guidelines on creating MSAs, refer to the WCMSA Reference Guide. This guide provides comprehensive information on the criteria and processes involved in setting up a Medicare Set-Aside.

Question 8

Is getting the Medicare Set-Aside reviewed and approved by Medicare required?

Accepted Answer

No, obtaining approval for a Medicare Set-Aside (MSA) is not mandatory. Medicare offers a voluntary submission and review process for MSAs that meet specific thresholds. If an MSA does not meet these thresholds, it will not be reviewed by Medicare. However, if the MSA does meet the review criteria, parties involved in the settlement can choose to send the report to Medicare for review and approval.

Benefits of Medicare Set-Aside Approval

The primary advantage of having an MSA reviewed and approved by Medicare is the assurance that Medicare has deemed the amount sufficient to cover its interests. This helps mitigate uncertainty in cases where funds might deplete in the future.

Voluntary Submission Process

When deciding whether to submit an MSA for approval, consider that an unreviewed MSA leaves room for uncertainty regarding Medicare's acceptance of the settled amount.

Final Considerations

For those dealing with MSAs, understanding whether to opt for Medicare’s review process can impact the settlement's security and future fund sufficiency. More detailed information can be found in the WCMSA Reference Guide.

Question 9

What if my Medicare Set-Aside was never reviewed and approved by Medicare?

Accepted Answer

Many Medicare Set-Asides (MSAs) are not reviewed or approved by Medicare because they fall below the thresholds for review. In some cases, even substantial MSAs are not submitted for review by the parties involved in the settlement. Importantly, the process of review and approval by Medicare is entirely voluntary. If the amount Set-Aside is reasonable and deemed adequate by Medicare, and accurate reporting is conducted, Medicare will assume the role of the primary payer once the MSA funds are depleted.

Understanding Medicare Set-Aside Review

Why Some MSAs Are Not Reviewed: Some MSAs don't undergo Medicare's review due to their falling under the specified minimum necessary thresholds. This happens often in cases where smaller sums are expected to cover the entirety of future medical costs.

Voluntary Submission for Approval: Submission of an MSA for Medicare's review is voluntary. It depends on the parties involved in the settlement to decide whether to seek approval for larger MSAs.

When Does Medicare Become the Primary Payer?

Medicare steps in as the primary payer once the MSA funds are exhausted, provided that the Set-Aside was considered reasonable. It's crucial that all reporting connected to the MSA should be detailed and precise to ensure there are no issues with Medicare taking over.

Final Details: Understanding the Process

For more detailed information on Medicare Set-Asides, including guidance and considerations, you might refer to authoritative resources such as the WCMSA Reference Guide. This guide details the processes involved and various scenarios related to MSAs.

Question 10

Is getting an annuity for my Medicare Set-Aside required?

Accepted Answer

When it comes to Medicare Set-Asides (MSA), an annuity is not required. However, many involved in a settlement choose annuities for the security of future payments. Medicare permits MSAs to be annuitized, reviewing and approving both the initial seed amount and annual payments.

Choosing Between Lump Sum and Annuity:

Annuities for MSA: MSAs can be structured as annuities, allowing long-term financial planning for the injured party. An annuity provides the assurance of regular future payments, which can offer peace of mind.

Lump Sum: If a Medicare Set-Aside is approved as a lump sum, it cannot be changed to an annuity without re-submitting for approval. Conversely, if initially approved as an annuity, the settlement parties can opt to switch to a lump sum without notifying Medicare.

Considering a Change

From Lump Sum to Annuity: Requires re-approval from Medicare.
From Annuity to Lump Sum: Change is allowed without Medicare notification if initially approved as an annuity.

Allowed expenses for MSA funds

All allowed expenses must be primarily for medical care rather than general health or cosmetic purposes and must be related to the injury that necessitated the MSA. Expenses that are usually allowed include:

Medical care: Doctor visits, hospital services, surgeries, and lab work.
Prescription medications: All medications prescribed by a physician.
Durable medical equipment and supplies: Crutches, wheelchairs, blood sugar test kits.
Physical therapy and rehabilitation services.
Hearing aids and batteries.
Dental care: Cleanings, fillings, extractions, dentures, and orthodontia.
Vision care: Eye exams, glasses, contact lenses, and laser eye surgery.
Mental health services: Therapy, psychiatric care, and addiction treatment.
Preventive care: Screenings, annual physicals, and immunizations.
Qualified long-term care services.
Travel expenses essential for medical care (gas mileage, parking, tolls).

What expenses are not allowed to be paid from an MSA account?

It's important to note that MSA funds cannot be used for any other expenses other than the Medicare-approved items and services connected to the injury. Misuse of funds can lead to penalties or affect future Medicare coverage.

Health insurance premiums (with certain exceptions like COBRA, long-term care insurance, or health insurance while receiving unemployment benefits)
Cosmetic procedures that aren't medically necessary (such as cosmetic surgery, teeth whitening, etc.)
General health products like vitamins, supplements, or toothpaste (unless specifically prescribed for a medical condition)
Non-prescription medications (except insulin and some OTC items with a doctor's prescription)
Expenses incurred before your MSA was established
Gym memberships or fitness programs (unless specifically prescribed by a doctor for a medical condition)
Expenses reimbursed by other insurance
Funeral expenses
International medical treatments (in most cases)

Managing MSA expenses effectively

If you are self-administering your MSA, it’s important to carefully review healthcare provider bills to ensure they are only for items and services that are both related to your workers' compensation claim and covered by Medicare before paying. Proper management of your MSA funds ensures that once your account is appropriately exhausted, Medicare will pay for future treatments.

Managing MSA expenses yourself can be complicated. We’re here to help – with CareGuard, you'll never touch a medical bill, and our experts will file any necessary Medicare Set Aside reporting on your behalf.

Learn More about CareGuard

Additional Guidance on MSA Accounts

For more detailed information about managing and using MSA funds in accordance with Medicare guidelines, consult the WCMSA Reference Guide.

Question 12

Are my Medicare Set Aside funds taxed?

Accepted Answer

In most situations, the entire amount received from a personal physical injury settlement is non-taxable. Consequently, your Medicare Set-Aside (MSA) funds, as part of that settlement, are also not taxed when you initially receive them.

Tax Responsibilities for Interest on MSA Funds

The injured party must pay taxes on any interest earned from their MSA funds. Generally, if the interest earned exceeds $10, the bank will issue a 1099-INT form to the injured party for use in their tax return. According to Medicare's guidelines, taxes on interest income can be paid from the MSA account itself.

Additional Tax Considerations

Interest income from MSA funds is taxable.
Ensure to use your 1099-INT form provided by the bank during tax filing.

For any intricate details regarding taxation and Medicare guidelines, consider consulting a tax professional or referring to the IRS website on taxable income.

Question 13

What happens if I don’t properly manage my Medicare Set-Aside account?

Accepted Answer

If you do not properly manage your MSA account, you could severely jeopardize Medicare paying for your future medical care. Consequences include: denial of future bills from Medicare if your funds exhaust and being required to repay your MSA account for expenses that were paid for that are not covered by Medicare. Medicare reserves the right to have reporting for up to the entire settlement amount on medicare covered treatments before Medicare agrees to begin covering injury-related bills.

If the injured party doesn’t properly manage their MSA account, Medicare will deny paying for their injury-related treatment until the reporting is corrected. To do so, the injured party will have to pay back any amount that was used on an improper expense not relating to their injury back into the MSA account.

Mismanaging the MSA account will jeopardize the injured party’s future Medicare benefits; for this reason, it's important to be careful and seek assistance. Medicare "highly recommends" the use of a professional administrator.

Question 14

How can Ametros help?

Accepted Answer

Ametros’ CareGuard service supports individuals in efficiently managing their settlement funds. With CareGuard, the MSA funds are securely held in an interest-bearing account under the injured party’s name. Ametros acts as the custodian, overseeing all aspects of fund management.

Benefits of CareGuard Service

Professional Administration: CareGuard takes care of everything for the injured party, ensuring hassle-free fund management.
Ease of Use with the CareGuard Card: The injured party gets a CareGuard card, functioning like a traditional insurance card, allowing them to avail of group purchasing discounts at doctors or pharmacies.

Simplified Medical Payments and Compliance

Streamlined Bill Payments: CareGuard handles all medical bills for the injured party, ensuring Medicare compliance by managing all required reporting.
Flexibility in Choosing Healthcare Providers: The injured party can select any doctor or pharmacy without the need for utilization reviews.

Dedicated Support Team

Ametros offers a team of Care Advocates ready to assist injured parties in coordinating their care, ensuring they receive the best possible service and support.

Additional Information

For more detailed insights into how Ametros and CareGuard services operate, please refer to the WCMSA Reference Guide.

Question 15

Why is professional administration recommended for an Medicare Set-Aside?

Accepted Answer

https://www.youtube.com/embed/neZCIDi2KVU

The Centers for Medicare & Medicaid Services (CMS) strongly recommend professional administration for a Medicare Set-Aside (MSA). This service helps alleviate the burden on the injured party by managing funds, ensuring proper reporting to CMS, and tracking expenses.

Importance of Professional Administration

Professional administration is recommended due to the complex rules and regulations involved in managing a Medicare Set-Aside account. The CMS updated their Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide in July 2017 to emphasize this, stating in Section 17.1: “It is highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

Benefits of Professional Administration

Compliance Management: Professional administrators ensure adherence to all relevant rules, reducing the risk of mismanagement that could jeopardize Medicare benefits.
Fund Tracking: They help track the funds, making it easier for the injured party to manage their settlements efficiently.
CMS Reporting: Accurate and timely reporting to CMS is handled, ensuring continued eligibility for Medicare benefits.

How Ametros Helps

At Ametros, we strive to offer a seamless process for protecting Medicare benefits through our professional administration service, CareGuard. With CareGuard, the injured party does not have to handle bills or worry about Medicare reporting, ensuring their Medicare benefits remain intact upon settlement.

For further details about MSAs and professional administration, consult the WCMSA Reference Guide. This guide provides comprehensive information on the best practices for effectively managing a Medicare Set-Aside account.

Question 16

What if I want to self-administer my Medicare Set-Aside?

Accepted Answer

What if I want to self-administer my Medicare Set-Aside?

Injured parties have the option to self-administer their Medicare Set-Aside (MSA). While Medicare does not recommend this approach, it is possible for individuals to manage their own accounts.

Self-Administration Toolkit

For those choosing to self-administer, there is a 31-page Self Administration Toolkit available. It is essential for the injured party to become acquainted with this toolkit to effectively manage their MSA funds.

Importance of Legal Familiarity

Besides the toolkit, it’s crucial for the individual to understand the WCMSA Reference Guide and the Federal Medicare Secondary Payer Act (42 U.S.C. §1395 et seq), which are subject to periodic amendments.

Using Ametros’ Amethyst Service for Self-Administration

Ametros provides a service known as Amethyst, which aids individuals in self-administering their MSA with added support. This service links directly to the injured party’s personal bank account, offering the convenience and control of their settlement funds. With the Amethyst card, functioning similarly to a traditional insurance card, individuals can easily manage their medical funds while benefiting from support and savings — akin to what is offered by CareGuard.

Why Consider Professional Administration?

Many parties opt for professional administration to avoid potential pitfalls and to ensure compliance with Medicare guidelines. For further reading and detailed information about self-administration, you can explore additional resources in the WCMSA Reference Guide and other relevant documents.

For comprehensive guidance and the most up-to-date information, it is recommended to review the latest WCMSA Reference Guide and consult with professionals who can provide personalized advice based on current regulations.

Why is professional administration recommended for an Medicare Set-Aside?

What happens to unused Medicare Set-Aside funds?

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Question 17

What happens to unused Medicare Set-Aside funds?

Accepted Answer

https://www.youtube.com/watch?v=xpb0z_bs2oQ

Unused Medicare Set-Aside (MSA) funds remain in the MSA account and are carried over to subsequent years. These funds are reserved to cover medical treatment related to the claimant's workers’ compensation claim which Medicare would otherwise cover.

Carrying Forward Unused MSA Funds

According to the Centers for Medicare & Medicaid Services Self Administration Toolkit, if any funds are left over at the end of a year, they do not vanish. These remaining funds carry over to the next year, allowing usage of both the new annual deposit and the previous year's leftover amount. This continuous rollover ensures that all accumulated funds are used appropriately.

Post-Claimant Death Fund Management

In the event of the claimant's passing, if unused MSA funds remain, CMS may require reimbursement for any outstanding covered medical expenses. Medical providers have up to 12 months from the date of service to bill. Once all obligations to Medicare are cleared, the remaining MSA funds can be disbursed according to state law and the specific settlement agreement, potentially holding the account open for a period post-death.

For more detailed guidance, please refer to the Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1 and the Self Administration Toolkit, v1.3. These resources cover comprehensive information on managing MSA accounts and handling funds responsibly.

Question 18

How to Avoid a Medicare Set-Aside?

Accepted Answer

Avoiding a Medicare Set-Aside (MSA) is generally not recommended if your settlement includes future medical expenses that Medicare might cover, as this could lead to a cost-shift to Medicare. It's important to ensure compliance with the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests.

Responsibilities Under MSP Laws

Under MSP laws, all parties involved in a workers' compensation case must protect Medicare’s interests when resolving cases with future medical costs. These laws aim to prevent Medicare from covering expenses that should be the responsibility of another party.

Risks of Avoiding Medicare Set-Aside

Disregard of Settlement: Attempting to shift the financial responsibility for medical expenses to Medicare can lead to your settlement being disregarded. According to 42 CFR 411.46(b)(2), settlements intended to circumvent Medicare’s interests may be invalidated.

CMS Non-Compliance Consequences: If a Workers’ Compensation settlement is reached without CMS approval for an MSA, CMS is not bound by the MSA amount specified. This means CMS may refuse to pay for future medical expenses related to the injury.

Potential Refusal to Pay: CMS has the authority to refuse payment for certain expenses related to the injury until the settlement is entirely exhausted, as noted in the WCMSA Reference Guide, v3.1, Sec. 3.

Right of Recovery

Medicare holds a priority right of recovery against any entity receiving part of the settlement payment, ensuring its interests are protected financially. Detailed guidance can be found in the WCMSA Reference Guide, v3.1, Sec. 3.

For further information about Medicare Set-Asides and compliance, visit Medicare’s official MSA webpage.

Question 19

How long does a Medicare Set-Aside take?

Accepted Answer

The timeframe for preparing a Medicare Set-Aside (MSA) can vary based on several factors, such as the severity of injuries, case complexity, and the volume of treatment records involved. Typically, MSA vendors take between 3-5 business days under normal circumstances, although some may offer expedited "rush" services for faster turnaround.

Factors Influencing MSA Preparation Time

Injury Severity and Case Complexity: More complex cases with severe injuries may take longer due to the need for detailed evaluation.
Availability of Records: The speed at which treatment records can be obtained and reviewed directly impacts the MSA preparation time.
Vendor Efficiency: Different MSA vendors have varying standard processing times.

Standard Review Time by CMS

For the Workers’ Compensation Review Contractor (WCRC) to review an MSA, it typically takes an average of 30 days if there are no issues in case development. However, the Centers for Medicare & Medicaid Services (CMS) specifies that the review process can extend to 45 to 60 days once all relevant documents are submitted.

Additional Details

For comprehensive information on official CMS timeframes, refer to the WCMSA Reference Guide, v.3.1, sec 15.1.

Question 20

How is a Medicare Set-Aside calculated?

Accepted Answer

In a Workers’ Compensation Medicare Set-Aside (WCMSA), allocations are determined individually, considering only items and services related to the workers’ compensation injury that Medicare would cover.

Key Factors in MSA Calculation

Post-settlement treatment, prescription drugs, and items are calculated based on multiple sources and factors, including:

Applicable workers’ compensation fee schedules
Usual and customary charges
Actual charges, through reviewing claims payment and prescription drug payment histories
Treatment records from the last two years
Medical bills
Facility or provider fees

Influence of Age and Injury Type on MSA Calculations

CMS notes that medical pricing may fluctuate depending on factors like injury, age, and location. Each submission undergoes an individual review, which means different claimants with similar injuries and ages could receive differing WCMSA amounts.

Prescription Drug Pricing in MSA

For prescription drugs, the Workers’ Compensation Review Contractor (WCRC) prices Part D drugs based on the Average Wholesale Price (AWP). This pricing considers both brand and generic formulations and uses data from the Truven Health Analytics’ Red Book, which is updated monthly.

Further Resources

For more detailed information on how WCMSAs are priced and allocated, consult the WCMSA Reference Guide.

Question 21

When is a Medicare Set-Aside necessary?

Accepted Answer

https://www.youtube.com/watch?v=Lhm8c5C3rws

The necessity of a Medicare Set-Aside (MSA) arises when ensuring that Medicare's interests are protected in workers’ compensation settlements resolving medicals. While there are no strict legal mandates to prepare or submit an MSA to the Centers for Medicare & Medicaid Services (CMS), it is the sanctioned method to safeguard Medicare's interests.

What is a Medicare Set Aside?

An MSA allocates funds from a workers' compensation settlement specifically for future medical expenses that Medicare covers, related to the work injury. This ensures compliance with the Medicare Secondary Payer (MSP) laws, which are in place to prevent unnecessary cost-shifts to Medicare.

When Does CMS Review an MSA?

CMS will conduct a voluntary review of proposed Workers' Compensation Medicare Set Asides (WCMSAs) to ensure that the allocated amount sufficiently covers future Medicare-covered medical expenses from the settlement.

Conditions for CMS Review:

Current Medicare Beneficiary: If the claimant is a Medicare beneficiary and the total settlement amount exceeds $25,000.
Future Medicare Enrollment: If the claimant is expected to enroll in Medicare within 30 months and the settlement total, covering future medical expenses and disability, is anticipated to exceed $250,000.

The Importance of CMS Approval

Opting for CMS review and approval of a proposed WCMSA offers a level of assurance and finality to Medicare beneficiaries and workers’ compensation entities. Without this approval, Medicare may deny related medical claims or seek recovery of payments up to the total settlement amount if related medical expenses are covered by the settlement but paid by Medicare.

For a more comprehensive understanding and specific guidance on when and how an MSA should be prepared, refer to the Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1.

Question 22

How do I protect my Medicare Set-Aside money?

Accepted Answer

https://www.youtube.com/embed/z7XSsfB7YFc

Funding Medicare Set-Aside Accounts

A Medicare Set-Aside (MSA) can be funded through one of two methods:

Lump-Sum Payment: A one-time payment to fund the entire MSA.
Structured Settlement: Initial deposit (often called "seed" money) followed by regular annual payments.

Since each method has different benefits, reference the Self-Admin Toolkit, v1.3, sec. 3 for detailed guidance on managing these options.

Benefits of Annuity-Funded MSA

Choosing a structured settlement to fund an MSA provides distinct advantages. For Medicare beneficiaries, if funds are depleted temporarily in any year, Medicare reimburses MSA-covered healthcare treatments. This information is covered further in the Self-Admin Toolkit, v1.3, sec. 11.

Managing and Storing MSA Funds

It is critical to keep MSA funds in an interest-bearing account that is separate from other personal accounts. It's recommended by CMS to store funds in an FDIC-insured account without low-balance fees, providing easy check access. For more details, see Self-Admin Toolkit, v1.3, sec. 2 and the WCMSA Reference Guide, v.3.1, sec 17.2.

Appropriate Use of MSA Funds

To avoid potential issues with Medicare denying treatment, it is essential to use MSA funds solely for Medicare-covered treatments related to the initial injury. For further information, refer to the Self-Admin Toolkit, v1.3, sec. 4.

Administering Your Medicare Set-Aside

MSAs can be self-administered (if permitted by state law) or managed by a professional administrator. CMS advises that injured parties consider using a professional administrator for added protection. More about this is discussed in the WCMSA Reference Guide, v.3.1, sec 10.6.

Protecting MSA Funds with Professional Administration

Professional administration, such as services offered by Ametros, can shield MSA accounts from direct garnishments often requested by states. This additional layer of protection is advantageous compared to self-administration, ensuring compliance and security. A professional administrator can significantly decrease garnishment risks.

For detailed procedures and further reading, please consult the WCMSA Reference Guide and the Self-Admin Toolkit sections as mentioned.

For any related questions or further advice on managing your MSA funds, consider reaching out to a professional administrator or consulting the provided resources.

Question 23

When is a Liability MSA required?

Accepted Answer

There is no specific statute or regulation that formally mandates a Liability Medicare Set-Aside (LMSA). However, failing to consider Medicare's future interests can have significant consequences.

Involving a Medicare Set Aside (MSA) in a liability case requires careful consideration of Medicare's interests. The Centers for Medicare and Medicaid Services (CMS) have maintained that Medicare’s interests should be taken into account when resolving liability claims.

1. Assess the need for an MSA

Several factors trigger MSA consideration in liability cases. Settlement value represents the primary indicator for potential MSA involvement.

Common triggers include:

Total settlement values exceeding $25,000
Significant allocation for future medical expenses
Claimant's current or future Medicare eligibility
Ongoing medical treatment requirements
Injury severity suggesting long-term care needs

The assessment requires case-by-case analysis. Consider the potential cost-shift to Medicare and plaintiff's Medicare status.

2. Obtain a professional MSA report

Professional MSA reports provide detailed calculations for future medical costs. These reports require comprehensive medical information and treatment projections.

Essential information includes:

Complete medical records from injury date
Current treatment plans and provider recommendations
Diagnostic imaging and test results
Medication lists and prescribing patterns
Life expectancy considerations

The calculation methodology considers injury-specific treatment needs. Professional evaluators project future Medicare-covered expenses based on established medical protocols.

3. Integrate MSA reports into settlement negotiations

MSA reports influence settlement values and negotiation strategies. The projected amount affects both parties' settlement positions.

Settlement agreements should address Medicare's future interests explicitly. Release language must account for MSA obligations and fund allocation requirements.

The MSA amount typically becomes part of the overall settlement structure. Parties negotiate how MSA costs impact the total settlement value.

Historical Context and Guidance

Important Memos and Calls: Since the 2001 “Patel Memo,” there have been varying interpretations regarding MSAs in liability cases. Key documents, like the May 25, 2011 “Stalcup” memo, emphasize considering Medicare’s interests.
Rulemaking and Reviews: CMS initiated a rulemaking process in 2012, though it paused in 2014. Subsequent updates have been anchored around the Workers' Compensation Review Contractor’s (WCRC) ability to review Liability Medicare Set Asides (LMSAs).
Future Regulations: CMS issued a notice in 2018 for anticipated rulemaking on future medicals. Speculation suggests this could address LMSAs, but proposed rule issuance has been extended several times, most recently to August 2020.

Considerations in Liability Cases

In the absence of firm regulations, liability cases need a tailored approach:

Case-by-Case Analysis: Analyze the potential cost-shift to Medicare and the plaintiff's Medicare status.
Risk-Management Philosophy: The payer’s risk management strategies and the parties' philosophies play a crucial role in decision-making.

Funding mechanisms for MSA Set Asides

Two primary funding approaches exist for MSA implementation. Each method offers distinct advantages and administrative requirements.

Lump sum funding:

Immediate full funding at settlement
Eliminates ongoing payment obligations
Requires careful fund management planning

Professional administration:

Structured payment arrangements
Ongoing oversight and management
Reduced initial settlement costs

Professional administration provides expert oversight and compliance monitoring. Self-administration places responsibility on the injured party.

Related reading:

Professional Administration and Your Health- Ametros

Documentation requirements

Thorough documentation supports MSA decisions and compliance efforts. Records demonstrate consideration of Medicare's interests regardless of final approach.

Key documentation includes:

MSA assessment reports and calculations
Medical evaluations supporting treatment projections
Settlement negotiation records addressing Medicare interests
Attorney opinions on MSA necessity
CMS submission materials when applicable

Documentation protects all parties from future Medicare recovery actions. Proper records demonstrate good faith compliance efforts.

Post-settlement administration options

MSA funds require ongoing management after settlement completion. Two primary administration approaches serve different client needs.

Self-administration benefits:

Direct control over fund management
Potentially lower administrative costs
Flexibility in provider selection and treatment timing

Professional administration benefits:

Expert compliance oversight
Detailed record-keeping and reporting
Protection from administrative errors
Medicare communication handling

Professional administrators manage fund disbursements and Medicare reporting requirements. They provide expertise in complex compliance situations.

Settlement thresholds for consideration

Settlement value guidelines help determine when MSA consideration becomes necessary. These thresholds derive from Workers' Compensation practices and industry standards.

Related reading:

Common threshold guidelines

Industry practice references specific dollar amounts for MSA consideration. These amounts trigger initial assessment of Medicare Set-Aside necessity.

Typical thresholds include:

$25,000 total settlement value
$5,000 allocated for future medical expenses
Combination of settlement size and medical allocation

These thresholds represent industry guidelines, not formal regulatory requirements. Each case requires individual assessment beyond threshold considerations.

Medicare eligibility considerations

Current and future Medicare eligibility significantly impacts MSA necessity. Settlement timing relative to Medicare enrollment affects compliance requirements.

Key eligibility factors:

Current Medicare beneficiary status
Age proximity to Medicare eligibility
Disability-based Medicare qualification
End-stage renal disease considerations

Medicare eligibility within 30 months of settlement typically triggers MSA consideration. Earlier eligibility dates increase compliance obligations.

H3 - Regulatory context

These thresholds lack formal CMS endorsement for liability cases. They represent industry best practices adapted from Workers' Compensation guidance.

CMS has not established specific LMSA submission requirements. The thresholds provide practical guidance for risk management decisions.

The importance of compliance with MSA requirements

Addressing Medicare interests protects all parties from future complications. Proper MSA consideration prevents costly recovery actions and legal challenges.

Protection strategies include:

Thorough MSA assessment and documentation
Professional evaluation of Medicare interests
Appropriate settlement structure addressing future medical needs
Compliance monitoring throughout settlement process

Risk management approaches vary based on case facts and party philosophies. Professional guidance helps navigate complex compliance requirements.

Professional administration for LMSAs

Professional administration offers expert oversight for LMSA fund management. Third-party administrators handle compliance requirements and Medicare reporting obligations. This service protects injured parties from administrative errors and regulatory complications.

Key service advantages:

Expert compliance monitoring and reporting
Detailed record-keeping for all transactions
Medicare communication and correspondence handling
Protection from administrative mistakes and oversights

Professional administration ensures proper fund utilization according to Medicare guidelines. Administrators verify that expenses qualify for MSA reimbursement before payment.

Administrative services and oversight

LMSA administrators handle day-to-day fund management responsibilities. They process reimbursement requests and maintain comprehensive documentation. Professional oversight protects against improper fund usage and compliance violations.

Core administrative functions:

Review and approve medical expense reimbursements
Maintain detailed transaction records and reporting
Coordinate with Medicare regarding fund status
Provide annual account statements and compliance reports

Administrators ensure MSA funds are used only for injury-related medical expenses. They verify provider credentials and treatment necessity before approving payments.

Risks of non-compliance with Medicare requirements

Failing to address Medicare's future interests creates significant legal and financial risks. All settlement parties face potential consequences for inadequate MSA consideration.

Related reading:

Medicare recovery actions

Medicare can pursue recovery from multiple settlement parties. Recovery actions target funds that should have addressed future medical expenses.

Potential targets include:

Injured plaintiffs who received settlement funds
Insurance companies making settlement payments
Attorneys facilitating settlement agreements
Other parties involved in settlement process

Recovery actions can occur years after settlement completion. Medicare's subrogation rights continue despite settlement finalization.

Double damages provision

The Medicare Secondary Payer Act includes double damages penalties. This provision significantly increases financial exposure for non-compliance.

Double damages apply to amounts Medicare pays for injury-related care. The penalty doubles the original Medicare expenditure amount.

Impact on Medicare benefits

Improper MSA handling can affect future Medicare coverage. Beneficiaries may face coverage denials for injury-related treatment.

Medicare may refuse payment for services it believes settlement funds should cover. This creates personal financial liability for the injured party.

Looking Ahead

As the industry awaits final CMS rulemaking, stakeholders should remain vigilant about updates in the legislation affecting LMSAs.

For more detailed guidance on Medicare Set Asides, review the WCMSA Reference Guide.

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Question 24

Can a Medicare Set Aside be reduced or released if an injured individual&#8217;s condition improves?

Accepted Answer

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.

Question 25

How can professional administration help extend settlement funds?

Accepted Answer

Professional administrators play a crucial role in extending settlement funds by leveraging their expertise and networks. They secure potential discounts through their provider and pharmacy networks and negotiate with service providers to maximize funds.

Expertise of Professional Administrators

Professional administrators are skilled in ensuring medical funds are efficiently managed. Their expertise includes:

Securing appropriate billing with correct ICD-9 and 10 codes
Adhering to applicable fee schedules
Negotiating fees to enhance fund longevity

Potential Discounts and Negotiations

One of the primary ways professional administrators extend settlement funds is through negotiating discounts. By working closely with service providers and utilizing established networks, they can significantly reduce medical expenses.

How Does Fee Negotiation Affect Settlement Funds?

Fee negotiation is a critical strategy used by professional administrators. It involves:

Engaging with service providers to discuss fee reductions
Ensuring that all charges align with negotiated pricing
Monitoring ongoing expenses to maintain fund efficiency

Question 26

Do I need a separate bank account for my Medicare Set Aside funds?

Accepted Answer

Yes, CMS requires all Medicare Set Aside funds to be stored in a separate, interest-bearing account to prevent commingling with other funds and simplify accounting.

What are the CMS requirements for managing Medicare Set Aside bank accounts?

Use MSA funds exclusively for Medicare-covered treatments related to the injury.
Maintain funds in a separate, interest-bearing bank account.
Keep and organize all related bills and receipts.
Report expenditures to CMS annually or when funds are depleted.

How are funds deposited into my Medicare Set Aside account?

Lump sum settlements: funds will only be deposited into your account in one lump sum.
Structured settlements or annuity payments: there may be an initial deposit, followed by periodic deposits that often occur annually.

What is the best way to comply with Medicare Set Aside bank account requirements?

Due to the complexity of administering and managing a Medicare Set Aside account, CMS strongly recommends that injured parties use a professional administrator. Using professional administration means you never have to worry about compliance with Medicare rules, process bills, maintaining records or handling CMS reporting.

Learn more about Ametros’ professional administration service, CareGuard

CareGuard is a leading professional administration service that helps manage your future medical funds following a workers' compensation or liability settlement. Our goal is to make your post-settlement life easier by saving you money on doctor's visits, prescriptions, medical equipment, and more, all while coordinating your care. With CareGuard, you’ll never deal with a medical bill alone, and our experts will manage any necessary Medicare Set Aside reporting on your behalf.

Learn more about CareGuard

Question 27

What happens if my MSA funds are temporarily exhausted before my next structured settlement payment?

Accepted Answer

If you have a structured settlement and use up all the money in your MSA account before your next annual deposit arrives, your next steps depend on your Medicare status.

Handling an exhausted MSA if you are a current Medicare beneficiary

If you are a Medicare beneficiary, you should send an attestation letter to the Benefits Coordination & Recovery Center (BCRC) stating that your account is temporarily depleted. You can then bill Medicare for any additional expenses related to your workers' compensation injury until your next annual deposit is received.

This creates a situation where you will have alternating primary payers: first yourself through the MSA, then Medicare while your account is depleted, and then yourself again when your account receives its next funding. This alternating payment responsibility can be confusing for healthcare providers. It's important to clearly communicate with them about when they should bill Medicare instead of expecting payment from your MSA account.

If you have MSA funds to pay part of a bill but not all of it, it’s recommended you ask healthcare providers to send the entire bill to Medicare rather than paying it yourself.

Handling an exhausted MSA if you are NOT a Medicare beneficiary

If you are not yet a Medicare beneficiary when your account is temporarily depleted, you will need to use other insurance to pay for workers' compensation injury treatments until your MSA receives its next deposit. If you have no other insurance coverage, you will unfortunately have to pay out of pocket for these treatments until more funds are deposited into your account.

If you are self-administering your MSA, you can find more information about attestation in Self-Administration ToolKit v. 1.7

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