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.
