Hello, fellow adjusters! Sheryl Thompson here, your friendly neighborhood Medicare Set-Aside Nerd. Today, we’re diving deep into the world of Medicare Set-Asides (MSAs). Grab your coffee, settle in, and let’s unravel this complex but crucial aspect of our work.

Our Comprehensive Guide to Medicare Set-Asides for Insurance Adjusters

What is a Medicare Set-Aside (MSA)?

Simply put, an MSA is a financial agreement that allocates a portion of a settlement to pay for future medical services related to the workers’ compensation injury, illness, or disease. These are services that would otherwise be payable by Medicare. Think of it as a special savings account for future medical expenses.

But here’s the kicker: it’s not just a good idea, it’s a way to protect Medicare’s interests and comply with the Medicare Secondary Payer (MSP) Act. And trust me, you don’t want to be on the wrong side of that law.

Why Should Adjusters Care About a Medicare Set-Aside?

1. Compliance is Key: Failure to properly address Medicare’s interests can result in hefty fines and penalties. We’re talking up to $1,000 per day, per claim. Ouch!
2. Protect Your Client: By properly setting up an MSA, you’re protecting your client (the insurer or self-insured employer) from future recovery actions by Medicare.
3. Ensure Proper Claim Resolution: An MSA helps ensure that the claim is truly closed and won’t come back to haunt you or your client later.
4. Ethical Obligation: We have a duty to protect the Medicare Trust Fund. It’s not just about following rules; it’s about doing the right thing.

When Do You Need an MSA?

Not every settlement requires an MSA. You should consider one when:

1. The claimant is a Medicare beneficiary and the total settlement amount is over $25,000.
2. 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/lost wages over the life or duration of the settlement agreement is expected to be greater than $250,000.

The Medicare Set-Aside Process: A Step-by-Step Guide

1. Identify: Determine if the claimant is a Medicare beneficiary or has a reasonable expectation of becoming one.
2. Gather Information: Collect all relevant medical records and claims payment history.
3. Calculate: Determine the appropriate amount to be set aside. This often involves working with specialized vendors or attorneys.
4. Submit: If you’re seeking CMS approval (which is voluntary but recommended), submit the proposed MSA to CMS.
5. Negotiate: If CMS counters with a different amount, you may need to negotiate or provide additional documentation.
6. Finalize: Once the MSA amount is determined, incorporate it into the settlement agreement.
7. Set Up: Establish the MSA account and educate the claimant on proper use.
8. Monitor: While not your direct responsibility post-settlement, be aware that the claimant must administer the MSA properly and provide annual accounting to CMS.

Common Pitfalls and How to Avoid Them

1. Ignoring Medicare’s Interest: Always consider Medicare, even if you’re not seeking CMS approval.
2. Underestimating the MSA Amount: Be thorough in your medical cost projections. It’s better to overestimate than underestimate.
3. Failing to Consider Prescription Drugs: These can significantly impact the MSA amount.
4. Not Educating the Claimant: Ensure the claimant understands their responsibilities in administering the MSA.
5. Overlooking State-Specific Requirements: Some states have their own rules regarding MSAs. Know your jurisdiction!

Best Practices for Adjusters

1. Early Identification: Flag potential MSA cases early in the claims process.
2. Thorough Documentation: Keep meticulous records of all medical treatments and costs.
3. Regular Training: Stay updated on MSA guidelines and best practices. This field is always evolving!
4. Collaboration: Work closely with defense attorneys, MSA vendors, and your internal compliance team.
5. Claimant Education: Develop clear, simple materials to explain MSAs to claimants.

The Future of the Medicare Set-Aside

As Medicare costs continue to rise, I expect we’ll see even more emphasis on MSAs in the coming years. We’re already seeing increased scrutiny of MSAs by CMS and a push towards more standardized practices.

Keep an eye out for potential changes like:

• Mandatory review thresholds
• More stringent enforcement of the MSP Act
• Increased use of technology in MSA administration

Wrapping Up

MSAs may seem daunting at first, but they’re an essential tool in our adjuster toolbox. They protect our clients, ensure compliance, and help safeguard the Medicare system for future generations.

Remember, every MSA you handle properly is a win for you, your client, the claimant, and the Medicare system. It’s a big responsibility, but I know you’re up for the challenge!

Keep learning, stay curious, and don’t hesitate to reach out if you need guidance. We’re all in this together, and together, we can navigate the complex world of MSAs like pros!

Here’s to compliant settlements and peace of mind!

References

1. Legal Case: Arkansas Dept. of Health and Human Servs. v. Ahlborn, 547 U.S. 268 (2006). This Supreme Court case, while primarily about Medicaid, has implications for Medicare Set-Asides as it addresses the government’s right to reimbursement from settlements.
2. Legal Case: Hadden v. United States, 661 F.3d 298 (6th Cir. 2011). This case is significant in the realm of Medicare Secondary Payer compliance, addressing the issue of Medicare reimbursement in liability settlements.
3. Centers for Medicare & Medicaid Services. (2024). Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide.