What is a Medicare Set-aside Account?
After there is a settlement in a workers’ compensation or personal injury liability case, the amount of the settlement that is “set-aside” for medical care must be put into a special account called a Medicare Set-aside Account or MSA Account. If you spend all of the money in your MSA Account, Medicare will begin paying bills for your injury, but only if you have spent the funds properly and followed all the rules for reporting and record keeping.
How Do You Know If You Are Required to Have an MSA Account?
Once a settlement has been reached in a workers’ compensation or personal injury liability matter and the final checks have been issued, an MSA Account may be required under certain conditions. Click on this link for more detailed information About Medicare Set -aside Accounts. The attorney involved in your case or settlement will know if you need an MSA.
Why is Medicare Involved in Your Settlement?
By Federal law, Medicare is always a “secondary payer” which means if there is any other insurance available – for example from a workers’ compensation or a personal injury suit – Medicare will not pay bills for your injury unless that insurance becomes unavailable. Since you received settlement money from an insurance company to cover your future medical treatments, Medicare wants to make sure that you spend that portion of your settlement money on injury related care, before the taxpayers start paying for your injury through Medicare.
What is a Medicare Set-aside Allocation?
The way Medicare ensures that it does not pay bills for your injury until your settlement funds are spent is through a Medicare Set-aside Allocation (MSA). An MSA is projection of the cost of the future treatment for your injury including doctor’s visits, tests, surgical procedures, and medications. The MSA amount, as set forth in the CMS Determination and settlement documents, must be then be placed into a Medicare Set-aside Account and spent on treatment for your injury.
MSA Rules and Regulations
MSA Accounts require detailed record keeping and reporting to CMS (Centers for Medicare and Medicaid Services), and have many restrictions about how the money in the account can and cannot be spent. Medicare rules dictate that you only pay for medications and procedures that are covered by Medicare and that you only pay the approved price for each bill. They also require that you keep records and receipts, and that you report all expenses to Medicare. If mistakes are made -- the injured person can risk future entitlement to Medicare benefits.
Medicare Set-aside Allocation Guidelines
There are different guidelines for Medicare Set-aside Allocations depending on your type of case:
Workers’ Compensation Medicare Set-Aside Allocations (WCMSA) and
Liability Medicare Set-Aside Allocations (LMSA)
Workers’ Compensation Medicare Set-Aside Allocations
A workers’ compensation Medicare Set-aside Allocation – known as a WCMSA –attempts to estimate every possible future medical expense related to your injury, including prescriptions, tests, surgeries, other medical procedures, doctor’s visits, supplies, equipment, etc. This amount is put into a special account – the MSA Account – and all medical expenses for the designated injury that would normally be covered by Medicare are paid from the MSA Account. The Centers for Medicare and Medicaid Services (CMS) has issued very specific guidelines governing all aspects of a WCMSA.
What Injured Workers Need to Know About WCMSA Accounts and Medicare Set-aside Requirements
You will be required to open an WCMSA Account if you are currently eligible for Medicare and your settlement amount is more than $25,000.00 OR if you are not eligible for Medicare and your settlement amount is more than $250,000 but there is a chance you will be eligible for Medicare in the future. It is considered likely that you will be eligible for Medicare in the future if you are over 62½ when you receive your settlement, or if you have filed for, plan to file for, or plan to appeal a filing for Social Security Disability, or if you have end stage renal disease (ESRD). If you are not sure if you’re required to open a WCMSA Account, feel free to call us at 1-855-MSA-MEDS (855-672-6337) or ask your attorney. Click here to Learn More About MSA Accounts in the attorney section of our website.
Medicare Set-Asides for Personal Injury - Liability Medicare Set-Aside Accounts
Medicare’s interests must be protected in liability cases. However, unlike workers compensation cases, the Centers for Medicare and Medicaid Services (CMS) has not issued precise guidelines on how Medicare’s interests must be protected in liability cases. New guidelines about LMSA Accounts for personal injury, accident and liability cases will be issued by CMS soon. Click here to learn more About Liability Set-Aside Accounts.
MSA Account Requirements, Rules and Regulations
- The most important thing you need to know about your Medicare Set-aside Account is that you are not free to spend that money however you want – and you are not even free to spend it on every medical need you may have for your injury.
- MSA funds must be kept in a separate interest bearing account and the interest has to stay in the account to be used for medical expenses.
- You must keep records and receipts and copies of every bill for every expenditure from the account.
- You must send a report to the Center for Medicare Services (CMS) every year detailing what has been spent.
- Not all medications are covered for every injury, even if you were taking them prior to settlement.
You must only pay bills according the pricing method approved in the CMS Determination Letter for your medications and medical services including, doctors’ visits, hospital stays and tests. MSA Account regulations are complicated and can be confusing. That is why MSA-meds professionally manages our clients' MSA Accounts. If you are still not convinced that you need our help, test your knowledge by taking this MSA Quiz.
If your MSA Account is not handled properly or if you pay more than the approved Medicare Set-aside price for any items, or pay for non-allowable expenses out of the account, the consequences include:
- Having to pay back any amount you paid over the approved Medicare price or in violation of Medicare’s rules;
- Medicare’s denial of bills for your injury until you have paid back any improperly spent funds; and
- Jeopardizing your entitlement to future Medicare benefits for your injury.
Why Is MSA Professional Administration So Important?
When an injury settlement is made, the intention is for the money to cover the injured person's medical needs for their lifetime . . . but sometimes the money runs out. If the money does run out, Medicare will step in and help, but only if the MSA Account has been in compliance with every rule and regulation that Medicare has including spending, record keeping and reporting. It is very easy to jeopardize your future Medicare eligibility for your injury.
How MSA-meds Can Help
MSA-meds protects its clients by taking care of the details of their MSA Accounts and keeping clients in compliance with all Medicare/ MSA requirements. We ELIMINATE ALL YOUR MSA ACCOUNT HEADACHES and we don’t even charge for these services. We do it all FOR FREE for our eligible pharmacy clients. Click here to find out How Our MSA Service Works.
Medicare Set-aside Accounts have
The penalties for not complying with Medicare Set-aside Account rules may include jeopardizing your future Medicare benefits.