Medicare Set-Asides
A Medicare Set-Aside (MSA) is a tool that allows injury victims to preserve Medicare benefits by setting aside a portion of the settlement money in a segregated account to pay for future Medicare covered services. The funds in the set aside can only be used for Medicare covered expenses for injury related care. Once the set aside account is exhausted, an injury victim gets full Medicare coverage without Medicare ever looking to the remaining settlement dollars to provide for any Medicare covered future health care. Medicare may approve the amount to be set aside in writing and agree to be responsible for all future expenses once the set aside funds are depleted if the parties choose to submit the allocation to CMS for review and it a reviewable MSA. Advising injury victims about Medicare compliance and set asides are an integral part of the responsibilities of a trial lawyer at settlement.
Below are our Synergy InSights on all things related to MSAs, written by our industry leading Medicare compliance experts.
April 8, 2021
Rasa Fumagalli JD, MSCC, CMSP-F
The nature of the Workers’ Compensation Medicare Set-Aside (WCMSA) has evolved over the years since the 2001 Patel Memo. That evolution has seen us move from every WCMSA that met the Center for Medicare and Medicaid Services (CMS) internal workload review threshold being submitted to CMS for review, to now a practitioner may be offered an evidence-based medicine WCMSA, a “certified” WCMSA or a compromise WCMSA. An understanding of the differences between these various types of proposed WCMSAs and their projection methodology is important when it comes to settlement discussions.
The WCMSA that most practitioners are familiar with is the “traditional” WCMSA. This type of WCMSA is submitted to CMS for review when CMS’ internal workload review threshold is met. Although CMS recommends that parties seek Agency (CMS) review of the WCMSA, the WCMSA Reference Guide (Guide) specifically states: “There are no statutory or regulatory provisions requiring that you submit a WCMSA amount proposal to CMS for review.” The Guide further states that “if you choose to use CMS’ WCMSA review process, the Agency requests that you comply with CMS’ established policies and procedures.”
The Guide includes the general frequency schedules for various diagnostic studies, implants, and drugs used by the Workers Compensation Review Contractor (WCRC) in determining future treatment costs. Given the “cookie-cutter” projection methodology that is used by the WCRC, the CMS-determined WCMSA may, at times, overfund the future treatment. The benefit to CMS review, however, is the assurance that CMS will become the primary payer upon review/approval of the allocation and proper exhaustion of the WCMSA funds.
A second type of WCMSA is the evidence-based medicine WCMSA. This may or may not be submitted to CMS for review. Rather than projecting future treatment based on the Guide’s frequency schedules, the projections instead focus on evidence-based medicine guidelines, such as those that may be found in the Official Disability Guidelines (ODG) or American College of Occupational and Environmental Medicine (ACOEM) guidelines. It is generally lower than a “traditional” WCMSA and will also limit projections based on state law arguments. If the evidence-based medicine WCMSA is submitted to CMS for review and approved by CMS, the WCMSA may more accurately allocate funds for the future treatment.
A practitioner may also be presented with a “certified” WCMSA that is not submitted to CMS for review. The “certified” WCMSA projection methodology looks to evidence-based medicine guidelines. It also comes with an assurance that the reasonableness of the certified WCMSA projections will be defended against any challenges by CMS. The WCMSA funds, however, must be either professionally administered or “self-administered with support” in order to extend the life of the funds. Since this type of WCMSA is not submitted to CMS for review, CMS is not bound by it.
The compromise WCMSA is used in disputed settlements and is never submitted to CMS for review. It is based on the calculation methodology that is outlined in 42 C.F.R. § 411.47. Although this provision discusses conditional payments, it should equally apply to the apportionment of future medical damages in a compromise settlement.
Conclusion
Although the majority of WCMSAs are prepared by the defense, it is important that the practitioner scrutinize the methodology used in the WCMSA projections. If the WCMSA is not going to be submitted to CMS for review, an evidence-based medicine projection methodology is more appropriate than the “cookie cutter” projections used in the traditional WCMSA. This difference is particularly significant when the WCMSA is to be carved out from the settlement rather than added to the settlement. When in doubt as to the best approach, Synergy’s team is available to guide you through your Medicare Secondary Payer compliance options.
February 11, 2021
Rasa Fumagalli, JD, MSCC, CMSP-F
Securing CMS review of a Workers’ Compensation Medicare Set-Aside (WCMSA) proposal can, at times, be cumbersome. Once the CMS WCMSA determination letter is received, parties may often just close their files after the settlement funds are disbursed. This brief article will address the frequently overlooked CMS determination finalization process.
Parties that seek CMS review of a WCMSA should follow the guidelines that are set forth in CMS’ WCMSA Reference Guide (Guide). The most current version of the Guide, Version 3.2 was released on October 5, 2020, and outlines the process used by CMS in reviewing WCMSA proposals.
According to the Guide, the main benefit of seeking CMS review of a WCMSA proposal is the certainty that CMS will become the primary payer for injury-related, Medicare-covered services upon proper exhaustion of a CMS-determined WCMSA. This benefit, however, requires that the parties properly finalize the CMS determination. Section 15.3 of the Guide addresses this requirement in a “note,” which states: “the case will not be considered final until CMS receives the final settlement with the appropriate WCMSA amount.”
CMS determination letters also remind parties of this requirement. The first two pages of a CMS determination letter include the following statement:
“Approval of this WCMSA amount is not effective until the Centers for Medicare & Medicaid Services (CMS) receive a copy of the final executed workers’ compensation settlement agreement, which must include this approved WCMSA amount. Please include the CMS Case Control Number listed at the top of this letter in any correspondence. Submit your settlement agreement via the Portal if your original submission was via the Portal. If you originally submitted outside of the Portal, submit the settlement agreement to the following address:
WCMSA Proposal/Final Settlement
P. O. Box 138899
Oklahoma City, OK 73113-8899”
This last step is an important one since it gives CMS notice that the CMS determined WCMSA has been properly funded. This funding is then reflected in Medicare’s Common Working File for the beneficiary and serves to limit the amount of the settlement that may be considered for future medicals. Failure to properly finalize the CMS determination may result in the unintended consequence of Medicare considering the entire settlement as a future medical allocation, thereby defeating the benefit of the CMS review. Since there is often a delay between the issuance of the CMS determination and the actual settlement that funds the CMS determination, it is imperative that parties not overlook the finalization requirement.
February 3, 2021
Rasa Fumagalli, JD, MSCC, CMSP-F and Jennifer L. Yu, Esq.
In stark contrast to the world of worker’s compensation, most attorneys agree that there is a dangerous amount of gray area surrounding the subject of Medicare Set-Asides for liability settlements. This is so because the Centers for Medicare and Medicaid Services (CMS) has been slow in providing any real guidance for liability settlements that include compensation for future medicals costs.
To date, the guidance consists of the May 2011 CMS Stalcup memo (one regional director’s view) and the September 2011 CMS memo regarding treating physician certifications.
In 2018, the Department of Health and Human Services issued an initial notification of proposed rulemaking related to the Medicare Secondary Payer Act. The most recent abstract of the proposed rule states:
“This proposed rule would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items, services related to liability insurance (including self-insurance), no-fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. Specifically, this rule would clarify that an individual or Medicare beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulation.”
Since that time, the proposed rulemaking has been continuously postponed. In light of this, it falls upon the attorney to take “reasonable efforts” to protect Medicare’s interest. Failure to do so could result in possible disruption of a client’s benefits and open the attorney up to a malpractice claim. One of the most effective ways to protect against this is by calling in a Medicare expert for an MSP case evaluation.
The absence of formal regulation by CMS does not mean that the MSP Act does not apply to liability settlements. The MSP Act clearly prohibits Medicare from making payment when “payment has been made or can reasonably be expected to be made under a…liability insurance policy or plan (including a self-insured plan) or under no-fault insurance.”[1] The exception to this occurs when payment is not reasonably expected to be made “promptly” or within 120 days of receipt of the claim by the primary payer.
If Medicare makes payment in this situation, the payment is conditioned upon the reimbursement of the payment to the Medicare Trust Fund. A primary payer’s reimbursement obligation to Medicare may be demonstrated by: “a judgment, a payment conditioned upon the recipient’s compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items included in a claim against the primary payer or by other means.”[2]
The above provisions may impact a plaintiff’s settlement in the following way: If the plaintiff is a Medicare beneficiary and accepts a settlement that provides funds intended to compensate her for future medicals, this is a payment that has been made under a liability plan. Should the plaintiff require future injury-related Medicare-covered treatment, Medicare is prohibited from making payment for these services. Should an inadvertent payment be made, the Medicare Trust Fund could demand reimbursement.
Assessing next steps for your client when it comes to the MSP comes down to your client’s risk tolerance. There is no requirement that any moneys be set aside for future care covered by Medicare, but it is important to keep in mind that Medicare is on notice of any settlement as it has the benefit of the Section 111 mandatory insurer reporting requirement for any physical trauma liability settlement over $750.00. The Section 111 Total Payment Obligation to Claimant (TPOC) report must include the injury-related diagnosis codes, since the codes are added to the plaintiff beneficiary’s Medicare Common Working File. This can easily trigger a future denial of injury related care by Medicare. An MSA is the easiest way to protect against this issue. It will ensure that the proper amount of money is apportioned and also acts as a type of deductible; meaning that once those funds are depleted Medicare will pick up the payments from that point.
Conclusion
The MSP Act and the language used in the abstract of the proposed rule regarding “existing” MSP obligations should be considered by plaintiffs’ attorneys that are handling liability if Medicare is involved. If the settlement funds future medicals, then a decision to apportion some of the settlement funds as an LMSA may prevent your client from experiencing future issues with Medicare. The MSP compliance strategy however should always be driven by the circumstances of the case. If the area of MSP compliance is outside of your legal expertise, protect your firm and your client by partnering with an expert in the field. Until CMS provides additional guidance, the safest and easiest way to navigate the gray area is to work with an outside MSP compliance expert to assess your clients’ future need and provide supporting documentation for your file.
[1] 42 U.S.C. § 1395y(b)(2)(a).
[2] 42 C.F.R. § 411.22.
November 12, 2020
By: Rasa Fumagalli, JD, MSCC, CMSP-F
The Centers for Medicare and Medicaid Services (CMS) has been slow in providing detailed guidance in the area of liability settlements that include compensation for future medicals. To date, the guidance consists of the May 2011 CMS Stalcup memo and the September 2011 CMS memo regarding treating physician certifications. Although CMS issued Notice of Proposed Rulemaking regarding Liability Medicare Set-Asides (LMSA) and settlement of future medicals in 2013, it was withdrawn in October of 2014.
In the fall of 2018, the Department of Health and Human Services issued an initial notification of proposed rulemaking related to the Medicare Secondary Payer Act. The most recent abstract of the proposed rule states:
“This proposed rule would clarify existing Medicare Secondary Payer (MSP) obligations associated with future medical items, services related to liability insurance (including self-insurance), no-fault insurance, and worker’s compensation settlements, judgments, awards, or other payments. Specifically, this rule would clarify that an individual or Medicare beneficiary must satisfy Medicare’s interest with respect to future medical items and services related to such settlements, judgments, awards, or other payments. This proposed rule would also remove obsolete regulation.”
Since the initial notification in the fall of 2018, the target date for the notice of proposed rulemaking has been continuously postponed. The most recent target date of August 2020 has now come and gone. In light of this, it is unlikely that the notice of proposed rulemaking will occur in 2020.
The absence of formal regulation by CMS does not mean that the MSP Act does not apply to liability settlements that close out future medicals. The MSP Act clearly prohibits Medicare from making payment when “payment has been made or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no-fault insurance.”[1] The exception to this occurs when payment is not reasonably expected to be made “promptly” or within 120 days of receipt of the claim by the primary payer. If Medicare makes payment in this situation, the payment is conditioned upon the reimbursement of the payment to the Medicare Trust Fund. A primary payer’s reimbursement obligation to Medicare may be demonstrated by: “a judgment, a payment conditioned upon the recipient’s compromise, waiver or release (whether or not there is a determination or admission of liability) of payment for items included in a claim against the primary payer or by other means.”[2]
The above provisions may impact a plaintiff’s settlement in the following way. If the plaintiff, a Medicare beneficiary, accepts a settlement that provides funds intended to compensate the plaintiff for future medicals, this is a payment that has been made under a liability plan. Should the plaintiff require future injury-related, Medicare-covered treatment, Medicare is prohibited from making payment for these services. Should an inadvertent payment be made, the Medicare Trust Fund would expect reimbursement. Medicare will be aware of the settlement due to the Section 111 mandatory insurer reporting requirement for any physical trauma liability settlement over $750.00. The Section 111 Total Payment Obligation to Claimant (TPOC) report must also include the injury-related diagnosis codes, since the codes are added to the plaintiff beneficiary’s Medicare Common Working File. This data is used to prevent Medicare from making payments when Medicare is the secondary payer.
The MSP Act and the language used in the abstract of the proposed rule regarding “existing” MSP obligations should be considered by plaintiffs’ attorneys that are handling liability claims for Medicare beneficiaries. If the settlement funds future medicals, then a decision to apportion some of the settlement funds as an LMSA may prevent your client from experiencing future issues with Medicare. A settlement that does not fund future medicals should include an analysis that provides support for the position so that Medicare does not have an interest in the settlement when it comes to future medicals. Although additional guidance by CMS when it comes to LMSAs is pending, we should be careful what we wish for.
[1] 42 U.S.C. § 1395y(b)(2)(a).
[2] 42 C.F.R. § 411.22.
July 9, 2020
By Jason D. Lazarus
Medicare Secondary Payer Compliance for law firms when it comes to “futures” is all about risk mitigation. How do you properly and compliantly close a file when you represent a Medicare beneficiary? The biggest risk a trial lawyer faces when dealing with settlements for a Medicare beneficiary is the denial of future care as a result of Mandatory Insurer Reporting (MIR). If a client does not understand that risk and has a problem with Medicare paying for future injury-related care, then the law firm is exposed to malpractice risks. So how do you protect your law firm and make sure your client can make an informed decision about Medicare compliance issues? The answer is to educate yourself and the client by turning to an expert Medicare compliance partner.
Medicare Futures: The Problem & Risk
Today, there is a very real threat of Medicare denying future injury-related care after the personal injury case is resolved. This can be very easily triggered by the MIR and reporting of injury-related ICD codes which happens automatically now with any settlement of one thousand dollars or greater. Once a denial of care is triggered, a Medicare beneficiary has to go through the four levels of internal Medicare appeals plus a federal district court before ever getting the denial of care addressed by a federal appeals court. This is why it must be of primary concern for the personal injury practitioner to address these issues, particularly in catastrophic injury cases where denial of care could be devastating to the injury victim’s medical quality of life.
Consider this scenario: You represent a current Medicare beneficiary in a third-party liability case. As part of the workup of the case, you determine the client will need future medical care related to the injuries suffered. This could be determined by either deposing the treating physician or by the creation of a life care plan for litigation purposes. Ultimately, you settle the case. Since the client is a Medicare beneficiary, the defendant will report the settlement under the Mandatory Insurer Reporting law as it is greater than $750.00 in gross settlement proceeds. The defendant puts some language into the release about a Medicare Set-Aside being the injury victim’s responsibility and that they can’t shift the burden. Everyone signs the release and settlement dollars are paid. The file is closed, then forgotten. What happens though if that course of action triggers a denial of future care by Medicare?
Unfortunately, there is no cookie-cutter answer for what to do about Medicare compliance. It is a case-by-case analysis. In some instances, there may be an argument that future medicals aren’t funded at all by the settlement. In other cases, there might be an argument that a reduced amount of future medicals should be set aside to satisfy obligations under the MSP because the case settled for less than full value. There are just too many possibilities to give a simple one size fits all answer. However, what is clear is that doing nothing has its risks. For example, the client who received the denial of care likely will face a lengthy appeal process within Medicare that must be exhausted before having the issue addressed by a federal district court. In that scenario, the client is going to have to decide between paying out of their own pocket for future care or waiting for the care until exhausting all appeals in anticipation of prevailing over Medicare.
While the problem created for the client is a serious one if they are denied care, an equally scary proposition for the trial lawyer is their exposure for malpractice claims in this scenario. Let’s assume that the injury victim who got this denial letter was not properly advised of the risks of failing to set aside money. Would the trial lawyer potentially face a suit for legal malpractice? The answer is most likely they would. There could be all sorts of arguments made about whether they fell below the standard of care, but in the end, this is a known issue and one that is of the law. Worse yet, a trial lawyer and his/her firm could have Medicare breathing down their necks. While we haven’t seen any instances of Medicare pursuing a law firm over failing to set up a Medicare Set-Aside, as discussed earlier, there are recent examples of law firms being pursued by the Department Of Justice (DOJ) related to other aspects of the MSP and failing to have a process internally to ensure compliance with the MSP.
How to be Compliant
If you represent a Medicare beneficiary, you must determine if future medicals have been funded and, if so, advise the client regarding the legal implications of the MSP related to futures. The easiest way to remember the process once you have identified someone as a Medicare beneficiary or someone with the reasonable expectation is by the acronym “CAD”. The “C” stands for consult with competent experts who can help deal with these complicated issues. The “A” stands for advise/educate the client about the MSP implications related to future medical. The “D” stands for document what you did in relation to the MSP. If the client decides that they don’t want an MSA or to set aside anything, a choice they may make, then document the education they received about the issue with them signing an acknowledgment. If they elect to do an MSA analysis, hire a company to do the analysis so that they can help you document your file properly and close it compliantly.
In addition, release language is critical when it comes to the question of documentation of considering Medicare’s future interests. Release language I have seen prepared by defendant/insurers is typically overbearing. Frequently the language cites regulations that are related to workers’ compensation settlements and typically will specifically identify a figure to be set aside. The latter can potentially cause a loss of itemized deductions for the client. Not only is release language an important consideration, so is the method of calculation of the set-aside, potential reduction methodologies, and funding alternatives (lump sum vs. annuity funding). These issues do impact how the release is crafted as well as considerations of whether to submit to CMS for review and approval (which is rarely a good idea). Submission of a liability set aside isn’t required and a settlement should never be made contingent upon CMS review and approval. Some regional offices will not review a liability set aside whiles others will. Since review/approval is voluntary, I typically don’t recommend submission given the lack of appeal process should CMS come back with an unfavorable decision. Furthermore, making a settlement contingent upon CMS review/approval could create an impossible contingency if the settlement is in a jurisdiction where the regional office will not review.
The key to compliance is to start early and not let the defendant-insurer control the Medicare compliance process. At the outset of your case you have to confirm disability eligibility with Social Security and get copies of all insurance as well as government assistance cards. Make sure you understand who is potentially Medicare eligible such as those who are on SSDI, those turning 65, someone with end-stage renal disease (ESRD), Lou Gehrig’s disease (ALS), or a child disabled before age 22 with a parent drawing Social Security benefits. Collaborate with the other side regarding what is being reported under MIR. Be active in mandating the proper ICD codes to be included in the release.
Medicare beneficiaries must understand the risk of losing their Medicare coverage should they decide to set aside nothing from their personal injury settlement for future Medicare-covered expenses related to the injury. It is about educating the client to make sure they can make an informed decision relative to these issues. Beyond education of the client, the most critical issue becomes how to properly document your file about what was done and why. This part is where the experts come into play. For most practitioners, it is nearly impossible to know all the nuances and issues that arise with the Medicare Secondary Payer Act. From identifying liens, resolving conditional payments, deciding to set money aside, the creation of the allocation to the release language, and the funding/administration of a set-aside, there are issues that can be daunting for even the most well-informed personal injury practitioner. Without proper consultation and guidance, mistakes can lead to unhappy clients or, worse yet, a legal malpractice claim.
The lesson to take away regarding Medicare compliance is to strategically deal with these issues pre-settlement. If a client is a Medicare beneficiary, then make sure you know which ICD codes will be reported under the Mandatory Insurer Reporting law and evaluate with the client the possibility of a set-aside. Discuss with competent experts the proper steps for MSP compliance. Potentially use the set aside as an element of damages to help improve settlement value. Properly word the release if a set aside is being used to make sure the client doesn’t get saddled with inappropriate language or lose itemized deductions.
Synergy’s Medicare Expert Case Evaluation Service: Mitigating the MSP Risk
If you represent a client who is Medicare-eligible and is treating for their injuries, I recommend a Medicare Expert Case Evaluation (MECE) when you resolve the case. As part of the MECE, a Synergy Medicare Compliance expert will consult with your client regarding Medicare future interest protection mechanisms and the risk of doing nothing. After being advised, your client can make an informed decision about what they would like to do, and you can document your file accordingly.
For $1,000.00, the MECE service includes:
- Unlimited client consultation
- Template communications to your client
- Customized acknowledgment form to document your file
- Settlement documentation consultation for MSP compliance
If an MSA allocation report is desired after consultation with the client, the cost of the MECE is applied towards the $2,500 charge for a Medicare Set Aside allocation report.
Conclusion
The whole system is flawed when it comes to Medicare. You take all the risks, you do all the work, you bear all the costs and, after you win, you must address the Medicare Secondary Payer Act. Synergy flips that paradigm on its head and fixes the broken system. Our team will create a comprehensive plan to allow you to close your file compliantly by addressing Medicare’s “future interest,” freeing you up to take on the next battle. You can focus on what you do best and everyone wins.
If you have a client who is Medicare eligible that is going to require future accident-related care, a Medicare Set-Aside should be considered and a MECE completed. There are numerous ways to deal with Medicare Secondary Payer compliance (without a set-aside) to ensure both your firm as well as your clients are protected. It just requires expert analysis with Synergy’s help.
March 25, 2020
B. Josh Pettingill
We are oftentimes asked about injured workers who have a Medicare Advantage Plan (MAP) and if they still need to use their Workers’ Compensation Medicare Set-Aside (WCMSA) funds if the MAP will cover all their medical care. This brief post will explain Medicare’s position on this issue and then provide real-world analysis. There has been a surge of case law over the last several years regarding MAPs and their ability to assert the same rights as Medicare under the MSP statute. However, there is no case law in existence regarding MSAs or where a MAP has denied paying for accident-related care. Over the years, whenever the injured worker has an MAP, the plan covers everything the MSA normally would (and then some).
Medicare Advantage Plan – Part C
Medicare Advantage Plans also referred to as “Part C” Plans, were established under the Social Security Act as an alternative to traditional Medicare. Medicare Advantage Plans are a type of Medicare health plan offered by a private company that contracts with Medicare to provide all Part A and Part B benefits.
Part C Coverage
Medicare Advantage Plans include Health Maintenance Organizations, Preferred Provider Organizations, Private Fee-for-Service Plans, Special Needs Plans and Medicare Medical Savings Account Plans. If your client is enrolled in a Medicare Advantage Plan, Medicare services are covered through the plan and are not paid for under original Medicare. Most Medicare Advantage Plans include prescription drug coverage (Part D) as well. In order to be eligible for an MAP, you must be eligible for Medicare Part A and Part B.[1] Part C plans can also cover things that traditional Medicare does not pay for such as gym memberships or dental benefits.
Part C Statistics
As of 2018, more than one-third of all Medicare beneficiaries were enrolled in some type of Medicare Advantage Plan. One in every five (20%) of these enrollees were in group plans offered by employers and unions.[2] What this means for Workers’ Compensation cases is that we are seeing a lot of injured workers who have these types of plans.
Medicare’s Position
From Medicare’s standpoint and per the WCMSA reference guide, section 4.1.3:
“A WCMSA is still recommended when you have coverage through other private health insurance, the Veterans Administration, or Medicare Advantage (Part C). Other coverage could be canceled, or you could elect not to use such a plan. A WCMSA is primary to Medicare Advantage and must be exhausted before using Part C benefits to cover your WC claim-related expenses.”[3]
In other words, they don’t care if there are other forms of private health insurance because the claimant’s circumstances may change and there could be a shift in burden for Medicare to pay. However, by including MAPs in the category of “other coverage”, one could interpret that CMS is also admitting that these plans will likely pay if presented with a bill. That is exactly what we have been seeing.
Real-World Implications
As it stands today, these plans are not rejecting claims on the basis they should be paid for out of a Medicare Set-Aside. There have been rumblings from Medicare that they are sharing Section 111 reporting data with the MAPs which could give them the ammunition to reject claims if they were related to the work-related injury. [4] However, they simply do not have the resources or the wherewithal to do this. It is not to say that it won’t happen in the future. That day is not yet upon us.
Conclusion
You cannot proactively advise your clients to go out and purchase a Medicare Advantage Plan in an effort to circumvent the MSA obligation. Medicare’s position is that the WCMSA exists to protect the Medicare Trust Fund which would mean the injured worker proactively spends money from the MSA account as they treat. Along with that, you cannot control how the providers bill and who they bill.
The practical takeaway is that if your client has a Medicare Advantage Plan, there is a very high likelihood they may never spend a dime of their WCMSA funds. That is the way it stands today. Is it possible that CMS could start to share pertinent data with their MAP partners which would give them the chance to potentially deny paying for accident-related care on the basis they have the same rights under the MSP statute? Yes, but not highly likely.
WCMSAs come from Medicare’s interpretation of the MSP and not from any regulation or case law. Accordingly, it would be a significant stretch to say that a Part C plan could insist upon a set-aside when Medicare itself does not even have a specific regulation or statute requiring them. But, do not be surprised if you see Humana, Cigna or any other MAP provider, at least try to do it someday.
[1] Source: www.Medicare.gov
[2] Source: Kaiser Family Foundation analysis of CMS’s Landscape Files and March Enrollment files for 2010-2018
[3] https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/Downloads/WCMSA-Reference-Guide-Version-3_0.pdf
[4] Unsubstantiated rumors. The passage of the PAID Act would validate this happening.
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