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What happens to unused Medicare Set Aside funds?

Funds from a Medicare Set Aside (MSA) account must be available to pay for a claimant’s medical treatment related to their underlying workers’ compensation claim otherwise covered by Medicare “during the course of the claimant’s life.” See Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 3.0.

The Centers for Medicare & Medicaid Services Self Administration Toolkit indicates that:

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.

See Self-Admin Toolkit, v1.3, sec. 11. See also Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 19.3.1.

Following the death of a claimant / injured party, and if there’s unused funds left over, CMS has the right to be reimbursed for any outstanding covered medical charges. Providers have up to twelve (12) months from when the service was rendered. “Then, any amount left over in the WCMSA may be disbursed pursuant to state law, once Medicare’s interests have been protected. This may involve holding the WCMSA open for some period after the date of death, as providers, physicians, and other suppliers are permitted to submit their initial bill to Medicare for a period of 12 months after the date of service. Often, the settlement itself will dictate the appropriate dispersal of funds upon the death of the claimant and settlement of care-related expenses.” See Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 19.2.

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