If you’re either on Medicare or soon will be and you suffered a work-related injury or illness, you should seriously consider familiarizing yourself with Medicare Set-Asides, or MSAs.
An MSA is an amount of money “set aside” from your workers’ compensation claim. This money goes toward your medical treatment and varies from person to person. The MSA pays for your treatment instead of Medicare.
MSA and workers comp can be very complex, as you might imagine. The following is an explanation of MSAs and why they’re so important.
Understanding MSAs in workers’ compensation cases
An MSA comes into play when an injured worker is either already on Medicare or expects to be within the next 30 months. It basically applies to people 62.5 years and older.
The main purposes of an MSA are not only to protect Medicare’s interests but also the injured or sick employee. The Centers for Medicare & Medicaid Services (CMS) administers Medicare. CMS doesn’t want to pay for medical treatment that workers’ comp should handle. Workers don’t want to run the risk of not being able to obtain Medicare benefits. MSAs make sure neither one of those scenarios play out.
When someone receives a workers’ comp settlement – and they’re of an age where they’re either on Medicare or will be within 30 months – they really should consider setting up an MSA. Instead of receiving all of their settlement, a portion of the funds goes to the MSA. Once the MSA is empty, Medicare pays for any remaining medical treatment needed.
Factors to consider when deciding whether to use an MSA
Workers comp MSAs aren’t mandatory. But experts will typically recommend it if you’re a Medicare recipient and your settlement will be more than $25,000. MSAs are also a good idea if you expect to be on Medicare within the next 30 months and your settlement will likely be more than $250,000. CMS will only review MSA requests that meet these requirements.
Why is setting up an MSA recommended? There’s a significant chance you might lose Medicare for future medical treatment if you don’t. This is because federal laws 42 U.S.C. § 1395y(b)(2) and § 1862(b)(2)(A)(ii) of the Social Security Act state that Medicare becomes a “secondary payer” when a medical payment is covered by, or expected to be covered by, a worker’s compensation claim. As a secondary payer, Medicare cannot cover the expense if the worker’s compensation claim was meant to cover it.
Factors to consider when preparing an MSA
It will be very important that you work with a Florida personal injury lawyer with extensive knowledge of MSA workers comp cases. The reason is that there are a lot of factors that will need to be taken into account before submitting it to CMS. These include the following:
Medical records and treatment history
You’ll need to provide your medical records and have as good an idea as possible of the work-related injury or illness treatment you’ve already received, and the treatment you might need in the future.
Medical evaluation
Ask your doctor to perform an updated evaluation so that you’ll have the best idea of your future medical needs. These include any potential surgeries, medications, equipment, therapy, etc.
Cost projections
Your attorney can help give you a clear picture of the projected costs of future medical treatments, prescriptions, and other related expenses.
Explanation of the MSA process
The MSA process typically involves the following steps.
1. Analysis and evaluation
In consultation with your attorney, review the medical records, treatment history, and projected future medical needs to determine the appropriate amount to allocate to the MSA.
2. Submission to CMS
Prepare the MSA proposal and submit it to CMS for review and approval. CMS ensures the allocation meets its guidelines and approves or requests revisions to the proposal.
3. Account administration
Once the MSA is approved, establish an MSA account to hold the allocated funds separately. This account should be administered according to Medicare guidelines and track all payments made from the MSA funds.
Again, these steps can be much more complicated than they seem. You should consider working with a professional to make sure the process goes as smoothly as possible.
Responsibilities of the parties involved
There are several parties that will play a role in setting up your MSA. Here are just a few.
Your responsibilities
The biggest thing to remember about an MSA is that the funds are only designed to pay for the expenses that are a direct result of your injury or illness. You’ll need to keep track of all your expenses and report to Medicare regularly.
That way, they can see the funds are being used as they should. Again, you’ll also need to provide your medical records, history of treatment, and all other relevant information.
Responsibilities of the workers’ comp insurer
They’ll need to provide whatever documents are necessary to facilitate the MSA, and work with you to make sure Medicare has all the information they need.
Responsibilities of the CMS
It will be up to CMS to review the MSA proposal and make sure it complies with their requirements.
Advantages and disadvantages of MSAs in workers’ compensation cases
As we mentioned earlier, MSAs are voluntary but recommended. There are definitely pros and cons to submitting one.
Advantages of MSAs
The biggest advantage is that you’ll show you have Medicare’s best interests in mind and that you’re working to make sure you comply with their requirements. This could prevent any potential delays in Medicare paying for future expenses once the MSA runs out. It will also help ensure you continue to receive treatment without having to pay for it out of your pocket.
Disadvantages of MSAs
The biggest downside is that you won’t receive as much of your settlement, since a portion will have to go to the MSA. But the peace of mind of knowing your Medicare payments in the future will be protected will very likely be worth it.
Speak with our law firm to learn more
Get in touch with Lytal, Reiter, Smith, Ivey & Fronrath to learn more about how we may be able to help with your MSA workers comp requirements. You can use our online form or call (561) 655-1990.
