Medicare Set-aside (MSA) Accounts funded with structured settlements or annuities may become temporarily depleted if funds in the MSA Account are all spent before the next scheduled deposit into the MSA Account. CMS allows MSA Accounts to be funded with structured settlements or annuity payments. The general rule is that an initial deposit equal to the first surgery/procedure for each body part, as well as the first two years of projected annual service and medication costs must be made at the time the MSA Account is established. Then a deposit of one year of service and medication costs must be made annually on the anniversary date of the establishment of the MSA Account for the remainder of the life expectancy. Any funds remaining at the end of the year roll over into the MSA account and must be spent down before Medicare will pay bills for the injury. For more information about temporary depletion of MSA accounts, read on and contact our team to learn more.
If MSA funds are properly depleted before the next scheduled annuity payment, then Medicare will step in and pay bills until the annual deposit is made. While this may seem like a simple process in theory. In practice, it often causes delays for injured workers who self-administer their MSA Accounts.
Why is there a delay after a temporary depletion of annuity-funded MSAs?
CMS puts a flag on all Medicare claims where they believe an MSA Account should be the primary payor. In order for CMS to pay a bill on a flagged Medicare claim, the flag must be removed. The only way to remove the flag is to file a temporary depletion accounting showing that all funds deposited thus far into the MSA Account were properly spent. CMS must then review the temporary depletion accounting and agree that the funds were properly spent, remove the flag and then process previously denied bills and issue payment. This process may take time, especially when being completed by an injured worker who is unfamiliar with Medicare’s processes. In addition, if the injured worker made any payments from the MSA Account that were contrary to Medicare rules, Medicare will require the injured worker to properly spend down those additional funds before making any payments.Delays in payment of medical bills may prevent the injured worker from receiving needed treatment.
How can Temporary Depletion Delays be avoided?
There are two ways to help reduce temporary depletion delays. The first is to fund the MSA Account with a lump sum payment. This requires that only a final accounting be filed when all funds are depleted. Thereby causing delays in payment only one time during the injured worker’s life. However, this option costs the Insurance Carrier more money to fund and is therefore sometimes not a viable option for settlement.
The other option is to hire a professional administrator. A professional administrator will closely monitor funds and file a timely temporary depletion accounting. Moreover, the professional administrator will ensure that all bills that were paid from the MSA Account were spent according to Medicare’s rules. This should result in a much quicker turnaround time for Medicare to begin paying bills.
Contact MSA Meds
MSA Meds offers free professional administration services for eligible pharmacy participants. MSA Meds complies with all of Medicare’s rules for payment of bills from an MSA Account. We all keep all records and file timely temporary depletion accounting to ensure that our clients are never without needed medical treatment. Call MSA Meds today to find out more about how we offer peace of mind, especially with MSA Accounts funded by annuity payments. Contact MSA Meds today.