Medicare Set-Aside Basics
Medicare Set-Asides (or “MSAs”) are a construct created because the Medicare Secondary Payer Act makes it illegal for Medicare to pay for case-related treatment. Of course, this is limited to circumstances where a primary payer exists, such as a Workers’ Compensation carrier, a No-Fault carrier, or a liability defendant. But MSAs don’t exist under the law. They are simply a tool to help avoid Medicare paying and to protect a plaintiff where Medicare will refuse to pay. But MSAs are limited and do not include 100% of future care.
MSAs are so prevalent that nearly all Workers’ Compensation cases consider whether an MSA is needed. Liability and No-Fault cases are more often incorporating MSAs too.
If MSAs don’t exist under the law, why do you need one? MSAs come from the Medicare Secondary Payer Act. 42 U.S.C. § 1395y(b)(2) and § 1862(b)(2)(A)(ii) of the Social Security Act state: Medicare may not pay for a beneficiary’s medical expenses when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.” This single phrase is the MSA industry’s entire reason for existence.
Perhaps a better way to understand MSAs is to read the preceding phrase as making it illegal for Medicare to pay for plaintiffs’/claimants’ future medical care. The law specifically says Medicare may not pay. In the end, MSAs are just one vehicle to protect against this legal limitation. MSAs are so prevalent because Medicare favors them. Importantly, MSAs create a known beginning and end. Medicare’s Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide states that end point clearly, “Once the CMS-approved set-aside amount is exhausted and accurately accounted for to CMS, Medicare will pay primary for future Medicare-covered expenses related to the WC injury that exceed the approved set-aside amount.”
What’s in an MSA? MSAs include anything case-related that Medicare normally pays.
What’s not included in an MSA? MSAs do not include anything that Medicare would not normally pay for. As of early 2022, that list includes medical marijuana, acupuncture, most chiropractic care, and much more.
What about all that treatment Medicare won’t cover? How do I even the playing field?
The MSA won’t consider those treatments.
For this reason, you may want to consider projections of non-Medicare future care through similar projections, like a Non-Medicare Cost Projection. These NMCPs create a sort of “lite” Life Care Plan for much less cost than a traditional Life Care Plan. Cost Projections and NMCPs are tools that evens the playing field between plaintiffs and defendants.
The topic of future medical care in settlements is becoming more diverse every day. Please contact MASSIVE if you need help or consultation to determine which future medical allocation is best for your client.