Medicare Set Aside

When settling claims, Workers’ Compensation insurance companies are under a great deal of pressure to protect the interests of Medicare. Federal law even holds liable anyone who shifts the burden to Medicare to pay for future medical expenses related to an person’s personal injury or workers’ compensation accident or illness.

When someone has been injured due to someone else’s negligence or the injury falls under workers’ compensation and the victim is currently receiving or expected to receive Medicare, it may be necessary to create a trust called a Medicare Set Aside (MSA) to reimburse the government for future medical expenses. When an MSA is required, some amount of the settlement must be “set aside” for any medical expenses that would otherwise be paid by Medicare.

Set Aside laws are incredibly complex. Settlement Planners, Inc. offers an MSA program to help meet these legal obligations.

How an MSA Works?

Because federal law designates Medicare as a secondary payer, Medicare will not pay bills for an injury unless the primary source of payment from a workers’ comp or personal injury settlement has been exhausted. Because you receive money from an insurance provider to cover future medical costs, Medicare wants to ensure this money is spent on injury-related medical expenses before the government begins paying for your injury.

When your personal injury claim or workers’ comp claim is finalized, the portion of the settlement set aside for medical care must be put into a special MSA Account if the recipient receives or will receive Medicare. This money will be used to pay for your medical expenses and Medicare will start paying injury-related bills only once you have spent all of these funds properly and followed reporting and record keeping rules.

MSA Accounts require following very strict regulations and rules regarding how the money can be spent. Under Medicare rules, the money must only be spent on procedures and medication covered by Medicare and the approved price must be paid.

Completing an MSA requires the last two years of medical treatment records for the accident, full medical/expense/indemnity payment details for the last two years, a detailed prescription history, and a Medicare Set-Aside Evaluation Referral Form.

When is an MSA Required?

When someone else is liable for an injury or illness, such as an employer and a workers’ compensation insurance company, Medicare becomes a secondary payer and requires the setup of an MSA under the Medicare Secondary Payer Act.

Workers’ compensation claims are the most common type of claim requiring an MSA, but claims that fall under the Federal Coal Mine Health and Safety Act and the Longshore and Harbor Workers’ Compensation Act are treated similarly.

While Medicare’s interest must also be protected in personal injury cases, there are no exact guidelines for how this must be done in personal injury cases, unlike workers’ comp claims.

When a settlement is reached in a workers’ comp or personal injury liability claim and final checks are issued, an MSA may be necessary in some conditions. An MSA Account is typically required for people currently eligible for Medicare who receive a settlement of $25,000 or more or people who are not eligible for Medicare but may be eligible in the future and receive a settlement of at least $250,000.