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FAQ

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Find answers to commonly asked questions about Medicare Set-Aside (MSA).

WHAT IS THE MEDICARE SECONDARY PAYER ACT?

There is no law or requirement that says one must do a Medicare Set-aside (MSA) but Section 1862(b)(2) (A) (ii) of the Social Security Act (42 U.S.C. 1395 y(b)(2) states that Medicare must be protected from payment for future services whether its a worker’s compensation or liability case. There is no distinction in the law.

 

It precludes Medicare payment for services to the extent that a payment has been made or can reasonably be expected to be made promptly under liability insurance. Anytime a settlement, judgment or award provides funds for future medical services claimed in the lawsuit, it can be reasonably expected that those monies are available to pay for future Medicare services related to what was claimed and/or released in the settlement, judgment or award.

 

As stated the law does not require a “Set-Aside”, however, CMS/Medicare states that a “Set-Aside” is their Method of Choice and the agency feels it provides the best protection for Medicare and the injured party beneficiary. Submission to CMS for review is 100% Voluntary in both Liability and Worker’s Compensation cases.

WHAT IS A MEDICARE SET-ASIDE (MSA)?

A Medicare Set Aside account is just an organized way to show Medicare that you took their interests into consideration at the time of settlement. A Medicare Set Aside account is a portion of your settlement set aside to cover all future injury-related medical expenses for you that would normally be paid by Medicare. When the Medicare Set Aside account funds exhaust, Medicare will step in as primary payor granted you have reported your use of the funds properly to Medicare and, of course, that you are enrolled in a Medicare plan. MSA(s) are required to do the following which is why we highly recommend one’s MSA be Professionally Administered:

 

  1. Funds must be held in an segregated interest-bearing account
  2. Use of the funds can only be for treatments related to the injury
  3. Use of the funds can only be for Medicare–covered expenses
  4. Pay according to the appropriate fee schedules
  5. Prepare and submit annual accounting report to Medicare
  6. Maintain line item detail for the duration of eligibility
ARE MSAs REQUIRED?

As stated the MSP Statute does not require a “Set-Aside”, however, CMS/Medicare states that a “Set-Aside” is their Method of Choice and the agency feels it provides the best protection for Medicare and the injured party beneficiary.

WHAT IS A LMSA ALLOCATION REPORT AND WHEN TO CONSIDER ONE FOR YOUR CASE?

When should you consider having a Medicare Set-Aside Allocation Report prepared for your settlement?

 

  • If the injured individual is receiving Social Security Disability or Social Security retirement or was denied SSD but is appealing the SSD decision
  • If the injured individual is currently eligible or receiving Medicare
  • If the injured individual is age-eligible 65 or within 30 months after the settlement will be become a Medicare beneficiary

 

A Medicare Set-Aside Allocation Report is a detailed report prepared by our highly experienced Nurse/Life Care Planners indicating what the anticipated Medicare allowable, injury related expenses will be for the remainder of the injured party’s life expectancy. The Medicare Set-Aside Allocation Report provides the settling parties with an accurate dollar amount necessary for settling the matter; said amount may be “set aside” out of the settlement to satisfy protecting Medicare’s future interests and providing an ongoing resource for your injured clients’ successful post settlement future.

OPTIONS FOR FUNDING A MSA

A Medicare Set-Aside can be funded in two ways:

 

  1. the full lump sum deposited in the MSA or
  2. an up-front seed deposit along with annual contributions deposited over a claimant’s life expectancy. This is best done through the use of an annuity, and provides many advantages to the injured party.

 

Saber Solutions can help you determine which method is right for your situation.

OPTIONS FOR ADMINISTERING A MSA

The two options for administering your MSA are:

 

  1. Self- Administration where the injured party is on their own to manage and follow all the medicare annual requirements or
  2. Professional Administration

 

Saber Solutions has teamed up with Ametros Financial to offer CareGuard, a professional administration service for Plaintiff’s post settlement MSA accounts.

 

After settling your case using Saber’s LMSA and/or MCP reports, CareGuard will manage the MSA account for the injured party. The plaintiff will receive a CareGuard card to use like a health insurance card when visiting the doctor or paying for prescriptions for injury related services. The plaintiff will also receive a Careguard advocate assigned to assist you and manage one’s MSA account. These services will save money on doctor’s visits, prescription, equipment and more, all while helping coordinate one’s care. Plaintiffs, in their post settlement world, will never touch a medical bill and CareGuard advocates will file any necessary MSA reporting on their behalf. Relax knowing that CareGuard is managing everything, ensuring compliance with the law, so the plaintiff can focus on their health.

ARE YOU REQUIRED TO SEEK MEDICARE APPROVAL OF A MSA?

Whether the case is a Workers Compensation or Liability case, submission to Medicare is 100% voluntary and not required. There is no distinction in the law. If one chooses to submit they have that option or during the litigation the parties can stipulate as a term of settlement that it is required to submit the MSA allocation report to CMS for approval or modification. CMS is not reviewing Liability Medicare Set-Asides (MSAs) and often a letter is returned stating they will not review. New rules are anticipated in Liability cases and Saber will report to our community once rules or guidelines are issued by CMS/Medicare.

WHAT IS A MEDICAL COST PROJECTION (MCP)?

Not every case warrants the expense of a life care plan. A MCP provides an affordable, low cost alternative to a life care plan as the MCP report provides an anticipated projection on all future medicals (Both Medicare and Non-Medicare services) . In order to have a successful negotiation you need to objectively demonstrate through a report (And not your yellow pad numbers) a defendant’s exposure on future medical damages to maximize your settlements. This can be used successfully on all size cases with an incredible return on investment by putting your resources behind your cases.

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