Medicare Set Asides

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.

 

“Once your WCMSA account is set up, you can ONLY use it to pay for medical treatment or prescription drugs related to your WC claim, and ONLY if the expense is for a treatment or prescription Medicare would cover. This is true even if you are not yet a Medicare beneficiary (not yet enrolled in Medicare).” See Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements, sec. 4. “A WCMSA allocates a portion of the WC settlement for all future work-injury-related medical expenses that are covered and otherwise reimbursable by Medicare (“Medicare covered”).” See Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 3.0.

Funds from an MSA cannot be utilized for anything other than treatment related to an underlying injury otherwise covered by Medicare. If the funds are spent on other things, there may be issues with respect to Medicare coverage. “ related to medically necessary services and prescription drug expenses for the WC settled injury or illness, Medicare will deny all WC-injury-related claims until the WCMSA administrator can demonstrate appropriate use equal to the full amount of the WCMSA.” See Workers’ Compensation Medicare Set-Aside Reference Guide, v3.1, sec. 17.3.

Purpose and Coverage

While both MCPs and MSAs involve funding for medical expenses, their purposes differ. An MSA is specifically for Medicare-covered services related to a particular injury. In contrast, an MCP is assigned for medical expenses that Medicare does not cover or that are unrelated to the injury.

Flexibility and Management

MCPs, sometimes known as "Non-Qualified" medical expense accounts or Medical Custodial Accounts when managed by professional administrators, offer more flexibility. They do not have Medicare reporting requirements and can cover a wider range of treatments.

Post-Exhaustion Payment

One key distinction is what happens when funds run out. With an MCP, if funds are depleted, Medicare does not automatically step in to cover expenses, unlike with an MSA.

Final Thoughts on Medical Cost Projections

For those settling claims that require prediction of future medical expenses beyond standard Medicare coverage, considering a Medical Cost Projection can be beneficial. MCP accounts are advantageous for their flexibility and ability to manage non-Medicare eligible medical costs. For more complex details, refer to specialized legal or financial professionals.

For further understanding, it may be helpful to consult additional resources or legal professionals regarding MCP specifics and implications in settlement agreements.

A Medicare Set-Aside (MSA) is not mandatory but is a proactive measure to demonstrate that Medicare's interests were considered during a settlement. An MSA allocation report outlines items related to the injury that Medicare would cover. Submission to Medicare for approval is voluntary to ensure the allocated amount is accurate.

Understanding Medicare's Interests in Settlements

Under Section XVIII of the Social Security Act, interests of Medicare must be considered in injury settlements. Though not required, some parties might opt to create an MSA report detailing costs that Medicare would cover.

Voluntary Review by Medicare

Medicare offers to review these allocation reports when the injured party is, or soon will be, Medicare-eligible, and the amounts are significant. While Medicare review is voluntary, adhering to the following thresholds can make it beneficial:

1. The claimant is a Medicare beneficiary, and the settlement exceeds $25,000.

2. The claimant expects Medicare enrollment within 30 months from settlement and expects future medical expenses and disability/lost wages settlement to exceed $250,000.

Who Is Eligible for Medicare?

Individuals are eligible for Medicare after age 65 or if under 65 and receiving Social Security Disability Insurance (SSDI), with exceptions in certain cases.

For detailed insights about MSA processes and requirements, refer to guidelines or consult professionals experienced with the Social Security Act and related Medicare stipulations.

Simple Answer: Injured parties:

• Are only allowed to spend their MSA funds on Medicare-covered treatments related to their injury.
• Must place MSA funds in a separate, interest-bearing bank account
• Must keep copies of bills & receipts
• Must report all expenses they used their MSA funds on to CMS each year and in the case their funds run out

There are a number of complex rules to follow in the administration of MSAs. These are detailed in CMS' WCMSA Reference Guide and its Self Administration Toolkit. An administrator, like Ametros, offers products to ensure your account is used and reported properly. CMS "highly recommends" the use of a professional administrator. The most basic rule to keep in mind is that the injured party is only allowed to spend their MSA funds on Medicare-covered expenses directly related to their injury. Secondly, the injured party needs to keep track of all the expenses to report to Medicare that they used the funds properly.  This is important so that, in the case the MSA funds run out, Medicare will agree to begin coverage for injury-related treatment. To provide more detail step by step: the MSA funds must be placed in a separate, interest-bearing bank account. The injured party needs to keep copies of all bills and receipts, and keep detailed reporting on every expense they incurred with their MSA funds. This report must be sent to The Centers for Medicare and Medicaid (CMS) on a yearly basis in what is called an annual attestation. In addition, if the MSA funds run out, the injured party must file a temporary depletion form (if they will receive future MSA annuity payments), or permanent exhaustion form to CMS if they are permanently out of funds. Failure to report to Medicare and to use the MSA funds properly will result in Medicare denying to pay for treatments that are related to the injured party's injury thereby, jeopardizing their Medicare benefits.  Regardless of whether the injured individual is currently on Medicare, it is essential that their use of MSA funds is properly reported to the government.

When your Medicare Set-Aside (MSA) funds are exhausted, Medicare will begin to pay for covered items related to your injury, provided that you have properly managed and reported your MSA spending to Medicare. Additionally, you must be enrolled as a Medicare beneficiary. If these conditions are met, Medicare covers you just like any other beneficiary, including the applicable co-pays, coinsurance, and deductibles. 

Conditions for Medicare to Step In 

• Proper Management of MSA Funds: If your MSA funds are depleted according to Medicare’s guidelines, and you've reported your spending correctly, Medicare will become the primary payer for your future medical expenses related to the injury. 

Requirements to Ensure Coverage 

To qualify for Medicare to cover your injury-related medical expenses after your MSA is exhausted: 

• Enrollment in Medicare: You must be enrolled during an enrollment period. 

• Correct Management of MSA Funds: Adhering to Medicare’s rules for managing your MSA is crucial. 

Failure to correctly manage and report your MSA funds may result in a denial of coverage for injury-related care. Incorrect handling might jeopardize your future Medicare benefits. 

Steps if Coverage is Denied 

If your care is denied, you must replenish your MSA account for any unaccounted expenses and correct reporting to Medicare. It may be helpful to consult a professional administrator for assistance in managing your MSA effectively. 

For detailed information about the rules and proper management of your MSA, consider referring to the WCMSA Reference Guide. 

No. An attorney or adjuster or other party can come up with the amount that should be set aside. Many parties to settlement elect to use a third-party vendor due to their expertise in following Medicare’s guidelines for how to come up with the amount and the fact that they are an independent party. Medicare has provided extensive guidelines on how to create a MSA. Check the WCMSA Reference Guide for more information.

No. Medicare has offered a voluntary submission and review process for MSAs that meet its thresholds. For MSAs that do not meet the review thresholds, Medicare will not even review them. For MSAs that do meet the review thresholds, the parties to the settlement can decide if they would like to submit the report to Medicare so that Medicare can review and approve the amount. The benefit to having the MSA reviewed and approved is that Medicare has deemed it sufficient to cover its “interests” in the case that the funds may exhaust in the future. If the MSA is never reviewed and approved, Medicare has never deemed it sufficient and so there is still some level of uncertainty over if Medicare will accept the amount as sufficient.

Many MSA's cannot be reviewed and approved by Medicare because they are below the thresholds for review. Sometimes, parties to a settlement choose not to submit even large MSA's to Medicare for review. The review and approval process is voluntary. As long as the amount set aside is reasonable as to be deemed sufficient by Medicare and the reporting is done accurately, then Medicare will step in to become the primary payer if the MSA funds run out.

When it comes to Medicare Set-Asides (MSA), an annuity is not required. However, many involved in a settlement choose annuities for the security of future payments. Medicare permits MSAs to be annuitized, reviewing and approving both the initial seed amount and annual payments.

Choosing Between Lump Sum and Annuity: 

Annuities for MSA 

MSAs can be structured as annuities, allowing long-term financial planning for the injured party. An annuity provides the assurance of regular future payments, which can offer peace of mind. 

Lump Sum vs. Annuity 

If a Medicare Set-Aside is approved as a lump sum, it cannot be changed to an annuity without re-submitting for approval. Conversely, if initially approved as an annuity, the settlement parties can opt to switch to a lump sum without notifying Medicare. 

Considering a Change 

• From Lump Sum to Annuity: Requires re-approval from Medicare. 
• From Annuity to Lump Sum: Change is allowed without Medicare notification if initially approved as an annuity. 

Further Reading and Details 

For more detailed insights, including complex terms, you may refer to the WCMSA Reference Guide. 

The injured party can use their MSA funds on Medicare-approved expenses related to their injury. This can include doctor bills, prescriptions, durable medical equipment, home healthcare, and more. The injured party cannot use their MSA funds for anything other than these expenses.

In most cases, the entire amount paid out in a personal physical injury settlement is non-taxable. So, your MSA funds, as part of that settlement are also not taxed upon receipt.

The injured party is responsible for taxes on interest earned on their MSA funds. If the interest earned is accrued over $10, typically the bank will provide the injured party a 1099-INT to use in their tax filings. Interest income taxes can be paid for out of the MSA account per Medicare's guidelines.

Simple answer: If you do not properly manage your MSA account, you could severely jeopardize Medicare paying for your future medical care. Consequences include: denial of future bills from Medicare if your funds exhaust and being required to repay your MSA account for expenses that were paid for that are not covered by Medicare. Medicare reserves the right to have reporting for up to the entire settlement amount on medicare covered treatments before Medicare agrees to begin covering injury-related bills.

If the injured party doesn’t properly manage their MSA account, Medicare will deny paying for their injury-related treatment until the reporting is corrected. To do so, the injured party will have to pay back any amount that was used on an improper expense not relating to their injury back into the MSA account.

Mismanaging the MSA account will jeopardize the injured party’s future Medicare benefits; for this reason, it's important to be careful and seek assistance. Medicare "highly recommends" the use of a professional administrator.

Ametros’ service, CareGuard, helps individuals manage and make the most of their settlement funds. CareGuard is a full professional administration service, where we take care of everything for the injured party. The MSA funds are placed in an interest-bearing account under the injured party’s name, and we act as the custodian of the account.

The injured party receives a CareGuard card that works like a traditional insurance card, and by showing it at doctors or pharmacies, it enables the injured party to receive discounts through our group purchasing discounts where possible, and all the bills will be sent to us. We pay all the bills on behalf of the injured party and ensure compliance with Medicare by completing all required reporting.

With CareGuard, the injured party can treat with any doctor or pharmacy that they would like to without undergoing any utilization review. In addition, CareGuard has a team of Care Advocates that provide the injured parties with support to help coordinate their care.

Simple Answer: The Centers for Medicare & Medicaid (CMS) highly recommends including professional administration in the case of an MSA. Professional Administration can help take the burden off the injured party when it comes to reporting to CMS, tracking funds, and managing funds.

The Centers for Medicare and Medicaid (CMS) updated their Workers’ Compensation Medicare Set-Aside (WCMSA) Reference guide in July of 2017 to include professional administration in Section 17.1. It now states, “It is highly recommended that settlement recipients consider the use of a professional administrator for their funds.” MSA professional administration is recommended because, as stated above, there are many rules and regulations that go into administering a Medicare Set Aside account, and it is very easy for an injured party to risk their Medicare benefits by mismanaging their account.

At Ametros, our goal is to create a seamless process for the injured party to protect their Medicare benefits once they settle their case with our professional administration service, CareGuard. With CareGuard, the injured party doesn’t have to ever touch a bill, or worry if they are keeping up to date with their Medicare reporting. The injured party will always have their Medicare benefits intact when they choose to settle with CareGuard.

Injured parties have the option to self-administer their Medicare Set Aside (MSA). While Medicare does not recommend this approach, it is possible for individuals to manage their own accounts.

Self-Administration Toolkit

For those choosing to self-administer, there is a 31-page Self Administration Toolkit available. It is essential for the injured party to become acquainted with this toolkit to effectively manage their MSA funds.

Importance of Legal Familiarity

Besides the toolkit, it’s crucial for the individual to understand the WCMSA Reference Guide and the Federal Medicare Secondary Payer Act (42 U.S.C. §1395 et seq), which are subject to periodic amendments.

Using Ametros’ Amethyst Service for Self-Administration

Ametros provides a service known as Amethyst, which aids individuals in self-administering their MSA with added support. This service links directly to the injured party’s personal bank account, offering the convenience and control of their settlement funds. With the Amethyst card, functioning similarly to a traditional insurance card, individuals can easily manage their medical funds while benefiting from support and savings — akin to what is offered by CareGuard.

Why Consider Professional Administration?

Many parties opt for professional administration to avoid potential pitfalls and to ensure compliance with Medicare guidelines. For further reading and detailed information about self-administration, you can explore additional resources in the WCMSA Reference Guide and other relevant documents.

For comprehensive guidance and the most up-to-date information, it is recommended to review the latest WCMSA Reference Guide and consult with professionals who can provide personalized advice based on current regulations.

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.

The short answer is if your settlement includes future medical expenses and there’s likelihood a cost-shift could occur to Medicare (i.e. Medicare could reasonably be expected to pay for injury-related medicals), then it is not advised to attempt to avoid a Medicare Set Aside.

“All parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving cases that include future medical expenses.” See Medicare’s Medicare Set Aside official webpage. The MSP is federal law, including statutory, regulatory and policy provisions designed to prevent a cost-shift to the Medicare program.

Medicare is overseen by the Centers for Medicare & Medicaid Services (CMS). CMS’s only recommended method to protect Medicare’s interests is a Workers’ Compensation (MSA).

If parties to a settlement avoid incorporating an MSA, there are potential risks and exposure for this non-compliance. They include:

• Disregard of the Settlement - If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. See 42 CFR 411.46(b)(2).
• CMS not bound by non-submitted MSA - If the parties to a Workers’ compensation settlement stipulate an MSA amount but do not receive CMS approval, then CMS is not bound by the set-aside amount specified by the parties, and CMS may refuse to pay for future medical expenses related to the work-related injury, even if they would ordinarily have been covered by Medicare. WCMSA Reference Guide, v3.1, Sec. 8
• Refusal to Pay – CMS has the right to refuse to pay for certain expenses related to the workers’ compensation injury until the entire settlement is exhausted. See WCMSA Reference Guide, v3.1, Sec. 3.
• Right of Recovery - Priority right of recovery against any entity that received a portion of the settlement payment. See WCMSA Reference Guide, v3.1, Sec. 3

The timeframe for preparing a Medicare Set Aside (MSA) can vary based on several factors, such as the severity of injuries, case complexity, and the volume of treatment records involved. Typically, MSA vendors take between 3-5 business days under normal circumstances, although some may offer expedited "rush" services for faster turnaround.

Factors Influencing MSA Preparation Time

• Injury Severity and Case Complexity: More complex cases with severe injuries may take longer due to the need for detailed evaluation.

• Availability of Records: The speed at which treatment records can be obtained and reviewed directly impacts the MSA preparation time.

• Vendor Efficiency: Different MSA vendors have varying standard processing times.

Standard Review Time by CMS

For the Workers’ Compensation Review Contractor (WCRC) to review an MSA, it typically takes an average of 30 days if there are no issues in case development. However, the Centers for Medicare & Medicaid Services (CMS) specifies that the review process can extend to 45 to 60 days once all relevant documents are submitted.

Additional Details

For comprehensive information on official CMS timeframes, refer to the WCMSA Reference Guide, v.3.1, sec 15.1.

In a Workers’ Compensation Medicare Set Aside (WCMSA) allocations are prepared on a case-by-case basis. In a WCMSA, only items and services related to the workers’ compensation injury otherwise covered by Medicare are included. Post-settlement treatment, prescription drugs, and items are calculated based upon a number of different sources and factors, including:

• Applicable workers’ compensation fee schedules
• Usual and customary charges
• Actual charges (by reviewing claims payment and prescription drug payment histories)
• Last two years of treatment records
• Medical bills
• Facility / provider fees

CMS also indicates that, “medical pricing may vary based on injury, age, location, and other factors. Each submission is reviewed independently of other submissions for claimants with the same injury and age. This accounts for any differences in WCMSA amount determination.” See WCMSA Reference Guide, v.3.1, sec 9.4.3.

Specifically, with respect to prescription drugs:

“The WCRC continues to price Part D drug products based on AWP and further based on brand or generic drug pricing. AWP pricing is pulled from a proprietary source, Truven Health Analytics’ Red Book database. The WCRC uses a program for drug pricing that uses Red Book flat files that are updated monthly.”

See WCMSA Reference Guide, v.3.1, sec 9.4.6.

For further and more detailed information on how WCMSAs are priced and allocated, please refer to the WCMSA Reference Guide.

The short answer is that there are no statutory or regulatory requirements to prepare or submit a Medicare Set Aside (MSA) to the Centers for Medicare & Medicaid Services (CMS) for review or approval. However, CMS does mandate that Medicare’s interests are considered and protected in all workers’ compensation settlements which resolve medicals. The only sanctioned vehicle to accomplish this is an MSA.

“All parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving cases that include future medical expenses. The recommended method to protect Medicare’s interests is a WCMSA [Workers’ Compensation Medicare Set Aside].” See Medicare’s Medicare Set Aside official webpage. The MSP is federal law, including statutory, regulatory and policy provisions designed to prevent a cost-shift to the Medicare program.

“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.

CMS will voluntarily review proposed WCMSAs in order to determine if the proposed amount is sufficient to cover future Medicare-covered medical expenses related to the settlement. See WCMSA Reference Guide, v.3.1, Sec. 8, and 8.1. CMS will voluntarily review a WCMSA proposal in the following circumstances:

• The claimant is a Medicare beneficiary and the total settlement amount is greater than $25,000.00; or
• The claimant has a reasonable expectation of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability or lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.00

CMS indicates their voluntary, yet recommended, WCMSA amount review process is the only process that offers both Medicare beneficiaries and Workers’ Compensation entities finality with respect to obligations for medical care required after a settlement. When CMS reviews and approves a proposed WCMSA amount, CMS stands behind that amount. Without CMS' approval, Medicare may deny related medical claims, or pursue recovery for related medical claims that Medicare paid up to the full amount of the settlement. See WCMSA Reference Guide, v.3.1, sec 4.2.

A Medicare Set Aside (MSA) can either be funded in two ways:

• Via lump-sum, where a single payment is made to fund the entire MSA; or
• Structured settlement, where an initial deposit (or “seed” money) is made, followed by annual payments.

See Self-Admin Toolkit, v1.3, sec. 3.

There are distinct advantages to having an MSA funded via annuity. If an injured individual is a Medicare beneficiary, with a structured MSA, in the event funds are temporarily depleted in any given year, Medicare will provide for reimbursement for MSA covered healthcare treatment. See Self-Admin Toolkit, v1.3, sec. 11.

Regardless of how the MSA is funded, the funds should be placed and kept in an interest-bearing account and separate from any other personal checking or savings. See Self-Admin Toolkit, v1.3, sec. 3 and WCMSA Reference Guide, v.3.1, sec 17.2. Moreover, while not required, the Centers for Medicare and Medicaid Services (CMS) recommends that the funds should be in an account “…insured by the Federal Deposit Insurance Corporation (FDIC)… and [that the bank] does not charge fees when you have a low balance, and that you can write checks from easily.” See Self-Admin Toolkit, v1.3, sec. 2.

It is imperative, in order to avoid issues with Medicare denying treatment or the injured individual risking their benefits, that funds are only expended on Medicare-covered treatment which is related to the underlying injury. See Self-Admin Toolkit, v1.3, sec. 4.

With respect to administration, an MSA can either be administered by the injured party (if permitted by state law) or by a professional administrator. See WCMSA Reference Guide, v.3.1, sec 10.6. Importantly, CMS indicates that “[a]lthough [injured parties] may act as their own administrators, it is highly recommended that settlement recipients consider the use of a professional administrator for their funds.”

With respect to protecting MSA funds, Ametros specifically has a process with its banking partners whereby they’ll hold on any direct garnishments from Ametros’ Members MSA accounts (child support being the most frequently), and have been 95% successful in working with the states requesting garnishment to get the MSA funds exempted.  Having a professional administrator overseeing an MSA account as a stopgap is a great layer of protection that simply doesn’t exist for self-administered cases.

Ever since Workers’ Compensation Medicare Set Asides (WCMSA) were formalized with the 2001 “Patel Memo,” there has been varying interpretation regarding the applicability of post-settlement Medicare Secondary Payer (MSP) considerations in liability claims. The Centers for Medicare and Medicaid Services (CMS) have taken the general position, for over a decade now, that Medicare’s interest should be considered when resolving a liability claim. This position has been established through the years, via:

• Town hall calls;
• Memoranda such as the May 25, 2011 “Stalcup” and September 29, 2011 memos;
• Rulemaking process initiated in 2012 and subsequently discontinued in 2014;
• Solicitation and statement of work for the Workers' Compensation Review Contractor (WCRC) from 2016 and 2017 indicating the contractor's ability to review Liability Medicare Set Asides (LMSAs).

At the close of 2018, CMS issued a notice of an anticipated rulemaking for future medicals, which has been widely speculated to address LMSAs. Subsequently, in 2019, the dates for issuing the proposed rule were extended – most recently to August 2020. Industry stakeholders will be keeping a close eye on when and whether CMS decides to institute the rulemaking process.

Until then there likely should be a case-by-case analysis balancing several factors, including the reasonable likelihood of a cost-shift to Medicare, the Medicare status of the plaintiff, and risk-management philosophy of the payer, and parties.

There is currently no policy that permits an individual with a Medicare Set-Aside (MSA) account to access or release funds during their lifetime, except for authorized expenses related to the original work injury covered by Medicare. This remains true even if an individual's condition improves.

Guidelines from CMS on Set-Aside Funds

The Centers for Medicare & Medicaid Services (CMS) does not allow the release or reduction of set-aside funds without its express approval. If a treating physician determines a beneficiary's condition has significantly improved, the beneficiary or their representative can submit a request to the appropriate CMS Regional Office (RO) for a reduction. This request must be accompanied by supporting documentation from the physician. The decision made by the RO is final and cannot be appealed.

Circumstances for Proposals to CMS

CMS outlines that if a new proposal is required due to significant health improvements, it must show at least a 25% reduction in the current WCMSA fund. Such proposals can only be submitted five years after a prior CMS approval and must include new supporting documents. If approved by CMS, any excess funds in the WCMSA may be released to the claimant.

WCMSA Account Restrictions

According to the WCMSA Reference Guide, funds in an MSA account can solely be used for medical treatments or prescriptions related to the work injury, which Medicare would otherwise cover. Unused funds at the end of a year are carried over to the next year, continuing until all funds are used appropriately.;

In summary, while condition improvement may seem like grounds for reducing an MSA, CMS controls decisions about these funds, allowing access only for medical expenses related to the claim and covered by Medicare, irrespective of any health improvements the individual might experience.

For further details, please refer to the WCMSA Reference Guide.

Professional Administrators can facilitate the extension of funds by securing potential discounts through their provider and pharmacy network and negotiating with service providers. A professional administrator has the expertise to ensure that funds are billed with the correct ICD-9 and 10 codes and according to the appropriate fee schedule. They can also negotiate fees, when necessary, ultimately maximizing an individual's medical funds for an extended period.