CMS states that all parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer laws to protect Medicare's interests when resolving cases that include future medical expenses. The recommended method to protect Medicare's interests is a Workers Compensation Medicare Set Aside (WCMSA).
“A [Medicare Set Aside] allocates a portion of the [workers’ compensation] settlement for all future work-injury-related medical expenses that are covered and otherwise reimbursable by Medicare.” See Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 19.2.
The MSA contains 3 essential elements:
- Medical Allocation – The line-item listing of Medicare-covered treatment and prescription drugs, which contains frequency, duration, dosage, costs, etc. for the life of the claimant. See WCMSA Reference Guide, v.3.1, Sections. 9.4.4-9.4.6 & 10.
- Sum to Structure – Can either be funded as a lump-sum or via structured annuity. See WCMSA Reference Guide, v.3.1, Sec. 5.0.
- Administration - Although beneficiaries may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their MSA funds. See WCMSA Reference Guide, v.3.1, Sec. 17.1.