Medicare Set-Asides Explained
APRIL 5, 2021
The term “Medicare Set-aside” (MSA) is not found in statute or regulation. It is a legal fiction – created by attorneys and endorsed by Medicare policy to comply with the Medicare Secondary Payer Act. This creates problems when trying to explain what it is to the uninformed.
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An MSA is a tool used by parties in a workers’ compensation settlement that prevents the burden of future Medicare reimbursable care from being shifted from the insurance carrier to Medicare. By “setting aside” money from a settlement, parties can settle a case and allowing Medicare to remain the “secondary payer.” While the employee is generally the primary target of Medicare, employers and insurers should take caution when resolving cases that close out future medical care.
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It is created at the time of settlement – inside the settlement agreement or attached documents. It states who the beneficiary is (the employee), their injuries covered under the MSA, and when the funds should be used. Other terms state if the employee is self-administering the account or if a third party is professionally administering the account.
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An MSA is created with money from a settlement. The amount is proposed by a specialized service provider like MSA Source. The amount can be voluntarily submitted to a Medicare contractor for review and approval.
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It is the law! The Medicare Secondary Payer Act requires parties to consider Medicare’s interests in settlements where Medicare reimbursable items and services (care) are closed. Parties should want to incorporate an MSA into a settlement to protect themselves. Medicare may be responsible for paying for future injury-related care. The MSA funds are used instead of Medicare to comply with the law and protect the program’s solvency.
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Monies deposited into an MSA are kept in a separate interest-bearing account at a bank or other financial institution. The injured employee uses money from this account to pay for future injury care or services that Medicare would otherwise pay.
According to Rafael Zeno of MSA Source, “Our goal is to use our legal and medical knowledge to provide our clients with the lowest legally defensible amounts for a Medicare Set-aside allocation. We also work hard to submit allocation for Medicare approval and avoid surprises on their response. Our team approach is motivated by passion-driven results for all people we worth for.”