Workers Compensation Medicare Set-Aside (MSA) 101

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.

By Carla Rodriguez | Nov. 9, 2023 | 4 min. read

What is a Medicare Set-Aside

An MSA is a financial safeguard that assigns a portion of a workers compensation settlement towards their future Medicare covered expenses. It’s essentially a way for Medicare to serve as a ‘back  up’ 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 cover Medicare from paying them. Workers Comp MSA’s can be done in structure payments over several years or 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 is met until they forward the final funding amount determination to the Centers for Medicare & Medicaid Services.

Are You Eligible for a WCMSA Review?

There are certain requirements that 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. Or 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 over the life or duration of the settlement agreement is expected to be greater than $250,000.00.

The first thing to do when a worker’s comp claim is submitted is check the age of the claimant if they are 65 or near turning 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 anticipates 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 does not yet qualify for Medicare base 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 whether Medicare has an obligation for services provided after the settlement that originally were the responsibility of the WC plan or insurer.


Most Common Errors

The way to avoid Medicare set aside issues is to stay informed with 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.


Bottom Line

The emphasis we are trying to make is that you need to have Medicare’s interest in mind for your own best interest. If there is an error or wrong charge, Medicare will collect their money back, but you might not. Medicare will step in as a substitute for the injured person through subrogation rights and reimburse back all their money during negotiations with the responsible party, be that the employer or their insurance. We’ve discussed that a WCMSA is a pre-determined amount of money from a claimant’s workers comp settlement set aside for future medical expenses. CMS acknowledges that this is a difficult process which is why WCRCs’ exist and helps ensure you are fulfilling all CMS guidelines. We might be making it sound easy, but MSP has many nooks and crannies you don’t want to get lost in. Here are more resources.