Medicare Set-Aside Basics
Medicare Set-Asides (or “MSAs”) don’t exist under the law. Nevertheless, nearly all Workers’ Compensation cases, and a growing number of Liability cases, consider whether an MSA is needed.
If MSAs don’t exist under the law, why do I 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.
Another way to think about MSAs is that the preceding phrase makes 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. They are favored by Medicare because 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. As of early 2021, that list includes medical marijuana, acupuncture, most chiropractic care, and much more.
For this reason, you may want to consider projections of non-Medicare future care through similar projections, like a Non-Medicare Cost Projection. The topic of future medical care in settlements is becoming more diverse every day.
MASSIVE’s Chief Operating Officer, Ryan Weiner, will be co-presenting on MSAs at the 2021 WILG Spring Conference on Friday, March 19. Please contact MASSIVE if you need help or consultation to determine which future medical allocation is best for your client.