What is a Medicare Set Aside (MSA) account?
Basically, an MSA Account is money that Medicare requires you to spend for treatment of your work-related injury before it will cover the expenses for that injury. It is calculating by projection the cost of your future work-related treatment that would otherwise be covered by Medicare. When MSA Account funds are exhausted, Medicare will step in as the primary payor, only if the injured worker can show they followed all Medicare’s rules regarding how the MSA funds may be spent. Read on and contact our team to learn more.
According to Medicare, the money deposited into the MSA account is a portion of the injury settlement that is “set aside” to cover all future injury-related medical expenses so that Medicare does not have to pay for that treatment until such time as all the set-aside funds have been properly spent. The reason for creating the MSA is to designate a certain amount from the settlement to pay for future medical treatment.
What are the rules regarding how MSA funds may be spent?
As with most things, there are rules regarding administration of the MSA account. The account must be a separate interest-bearing checking account used just for the MSA funds. The funds must be used to pay for Medicare-covered treatments related to the work injury – no using the money to go on vacation. Copies of bills and receipts must be kept. Each year you must report how the MSA funds were used to The Centers for Medicare & Medicaid (CMS). Finally, you must only pay the Medicare-approved price for treatments and medications.
This may sound easy, but there are a number of complex rules for proper administration that are detailed in the CMS’ Workers’ Compensation Medicare Set-Aside Arrangements (WCMSA) Reference Guide and CMS’ Self Administration Toolkit. These rules are intricate, so much so, that CMS “highly recommends” the use of a professional administrator.
What happens if MSA funds are spent prematurely?
Depending on the terms of the settlement, the injured worker will either receive a lump sum payment that is to be deposited in the MSA account or the settlement provides for yearly annuity funding for the MSA account. If the injured worker received a lump sum payment and those funds are now exhausted, a permanent exhaustion form must be filed with CMS. If the worker is receiving yearly annuity payments to fund the MSA account and the funds are exhausted before the next annuity payment is received, a temporary depletion form must be filed.
When the MSA funds are exhausted, Medicare will begin to pay for all covered items related to the injury, assuming that the MSA funds were properly managed and all necessary reports were filed with CMS. Once Medicare starts paying for treatment, the injured worker will be covered just like any other Medicare beneficiary and will be subject to co-pays, coinsurance and deductibles.
It cannot be stressed enough, that injured workers are jeopardizing their future Medicare benefits for injury-related care if they do not properly spend, record and report MSA funds. Medicare has been diligent in denying payment where an MSA Account exists or should exist and should be responsible for payment. This is why CMS highly recommends the use of a professional administrator.
Contact MSA Meds
MSA Meds stands to offer free professional administration of MSA Accounts for eligible pharmacy clients. We will follow all of Medicare’s rules so that when your MSA funds run out, Medicare will begin paying bills for injury-related care. Contact MSA Meds today.
