Medicare Set Aside (MSA) in Workers’ Compensation Claims

What is Medicare Set-Aside?

Medicare Set Aside is a financial safeguard that assigns a portion of a Workers’ Compensation settlement toward their future Medicare-covered expenses. It’s essentially a way for Medicare to serve as a ‘backup’ and protect its funds. However, before Medicare can pay for these expenses the approved Workers Compensation Medicare Set-Aside (WCMSA) must be used up.

Here is how it works:

Unfortunately, Workers’ Compensation payments can’t all be pocketed. The purpose of an MSA is to estimate future expenses and reserve enough money to cover those costs and prevent Medicare from paying them. Workers’ Comp MSAs can be made in structured payments over several years or as a one-time lump sum.

There are also Workers’ Compensation Review Contractors (WCRC) that can help navigate your proposal. A WCMSA, short for Workers Comp Medicare Set-Aside, can be sent through paper or CD to the Benefits Coordination and Recovery Center (BCRC) or it can be submitted online directly to the WCRC for review. These experts ensure all of the very specific and at times tedious, CMS criteria are met until they forward the final funding amount determination to the Centers for Medicare & Medicaid Services.

Are You Eligible for a WCMSA Review?

Certain requirements must be met for WCMSA proposals to be sent to CMS for review:

1. The claimant is a Medicare beneficiary, and the total Workers’ Comp settlement amount is greater than $25,000.00
2. If 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 or lost wages is expected to be greater than $250,000.00.

The first thing to do when a Workers’ Comp claim is submitted is check the age of the claimant if they are 65 or soon to be 65, therefore making Medicare an option.

When is there a reasonable expectation of Medicare enrollment?

Ask yourself the following questions to determine if your claimant can reasonably expect Medicare enrollment within 30 months of the settlement date:

• Have they applied for Social Security disability benefits?
• Have they been denied Social Security Disability Benefits but anticipate appealing that decision?
• Are they in the process of appealing or re-filing for SS benefits?
• Are they 62 years and 6 months old?
• Do they have an End Stage Renal Disease (ESRD) condition but do not yet qualify for Medicare based on this?

Medicare set aside is included in 3 stages of the 10-step process used during the Medical Review. That is why understanding its role in the Workers’ Compensation claims process is crucial. The CMS reviews WCMSAs on a case-by-case basis to determine if Medicare is responsible for covering services provided after the settlement, which may have initially been the responsibility of the WC plan or insurer.

Most Common MSA Errors

The way to avoid Medicare Set Aside issues is to stay updated on current regulations. There are hundreds of pages about Medicare funding regulations and CMS requirements but here are the most common reasons for development requests aka errors:

•  Insufficient or out-of-date medical records.
• Insufficient payment histories. Payment histories are required and MUST include breakdowns for payment categories along with identification of category codes.
• Failure to address settlement agreements and court rulings in submissions.
• Missing documents referenced in the file.
• References to state statutes and regulations with insufficient specification of where each regulation applies.

Tips for Improving your WCMSA Process:

For more information refer to section 14.0 of the WCMSA Reference Guide.

• Read above and follow the workload threshold requirements.
• Follow the WCMSA document requirements checklist. Refer to section 10-1 of the WCMSA Reference Guide.
• Contact WCRC before submitting more than 200 pages or two years’ worth of records.
• Do not resubmit previously submitted documents.
• Pay special attention to request letters printed in ALL CAPS.
• Respond to letters and phone calls as soon as possible.
• Check the status of your case through your WCMSAP.

You’re on track to becoming an MSA pro! Just keep in mind that if there’s an error or incorrect charge, Medicare will reclaim their funds, but you might not be so lucky. Through subrogation, Medicare steps in on behalf of the injured party and recovers all its money during negotiations with the responsible party, whether it’s the employer or their insurer. As we’ve discussed, a WCMSA is a set amount from the claimant’s workers’ compensation settlement reserved for future medical expenses. CMS recognizes the complexities of this process, which is why WCRCs exist to ensure compliance with all CMS guidelines.

While it may sound straightforward, the MSP process has many intricate details you’ll want to avoid missing. Here are additional resources to help guide you.