How Does a Medicare Set-Aside (MSA) Account Work?

A Medicare set-aside account, also known as an MSA, is a sometimes, confusing part of a workers’ compensation settlement. In essence, an MSA is a projection of future medical costs related to the work injury that would otherwise be paid by Medicare. This projected cost or MSA Amount is placed into an MSA Account. The injured worker must then spend the funds in the MSA according to Medicare’s rules. Once the injured worker properly exhausts the funds, Medicare will begin paying for Medicare-covered expenses. For more information on how an MSA account works, please keep reading, then contact our team today. Here are some questions you may have:

What rules and regulations must an MSA claimant follow?

MSA account holders must report their annual expenditures to the Centers for Medicare and Medicaid Services (CMS). In order to validate the expenses, they must hold on to all receipts. In addition, MSA account holders can only use settlement funds to pay for qualified treatments and prescriptions directly relating to the injury. Finally, the claimant has to pay the approved Medicare rate for each service. Account holders can face serious repercussions if they:

  • Do not manage their MSA account properly
  • Pay more than the approved amount for a service or treatment
  • Pay for non-allowable expenses from the account.

These repercussions include paying back the overages and improperly spent funds and jeopardizing future Medicare benefits.

Who determines the amount of the Medicare set-aside account?

A professional company or an MSA expert, who specializes in allocations, examines the injured person’s medical records and makes recommendations based on the amount of care that Medicare will cover. The professional hired to perform the allocation determines how much of the injury victim’s future medical care Medicare will cover and then multiplies it by the remaining life expectancy. In most cases, the MSA proposal is submitted to Medicare for approval. Medicare either agrees with the proposed amount or provides an alternate projection of the future care needed and a new cost for the MSA.

Who administers a Medicare set-aside account?

Either the injured person, i.e. self-administered, or a professional administrator may perform the task of MSA account administration. The party who administers the MSA, whether individual or administrator, must keep accurate records of all disbursements from the account for CMS reporting purposes.

How do you access Medicare set-aside funds?

Medicare requires that MSA funds be held in an interest-bearing account. Medical bills should be paid from the account and receipts must be kept to prove funds were properly spent.

What happens when the funds run out?

After the account holder has exhausted all MSA account funds, Medicare will review all payments made from the MSA Account. If Medicare determines that the account holder used the funds in an appropriate manner, the injured person may then use Medicare benefits for medical expenses related to the work injury.

Contact MSA Meds

Medicare set-aside accounts can be confusing, so you should hire a professional administrator to help you protect your Medicare benefits. Contact MSA Meds today.