Delta Settlements aims to provide our clients with timely and efficient service. Our Medicare Set-Aside (MSA) team is dedicated to understanding the medical issues in your case. Every MSA is important to us and each case is thoroughly analyzed in order to produce a detailed MSA allocation. Once the MSA allocation is determined, the method of funding and method of administration will need to be decided. If an annuity is chosen as the method of funding, our company can oversee the annuity process. Additionally, if professional administration is chosen, our company can facilitate the administration process through our network of reputable administration companies. Let us streamline the process for all involved.
Download Delta MSA Allocation Form
General Information Surrounding the Medicare Set-Aside Process:
Medicare is a Federal health insurance program for people age 65 or older, certain younger people with disabilities, and people with qualifying End-Stage Renal Disease. Medicare is governed by the Center for Medicare and Medicaid Services (CMS). The Medicare Secondary Payer Statute (MSP) is governed by 42 U.S.C.§1395(b)(2) and Title 42, Section 411 of the Code of Federal Regulations. The goal of the MSP is to ensure that Medicare is a secondary payer when another primary source of coverage is available with respect to workers’ compensation, liability insurance, self-insurance and no-fault insurance.
Compliance with the MSP is a complex and often confusing process. Full compliance involves two components, resolution of any conditional payments (paying for the past) and a Medicare Set-Aside allocation (forecasting the future). Failure to comply with the MSP could result in consequences such as CMS refusing to recognize the settlement or the loss of Medicare coverage by the claimant.
A conditional payment allows a Medicare beneficiary to receive timely treatment for Medicare covered services pending payment from a primary plan. The payment for medical treatment is made by Medicare on the condition that Medicare will receive reimbursement. Those responsible for reimbursement include the primary payer, or anyone who received primary payment, including a beneficiary, provider, supplier, physician, attorney, State agency or private insurer. CMS has the authority to recoup payment from the preceding persons so long as the primary payer was responsible for payment. CMS may also pursue a private cause of action for double damages against the carrier that was responsible for payment. If a claimant is a Medicare beneficiary at the time of injury, it is important to ensure that any conditional payments are identified, investigated, negotiated and resolved.
A Medicare Set-Aside (MSA) is a projection of the future injury related medical costs that would ordinarily be covered by Medicare if another primary payer did not exist. The purpose of the MSA is to protect Medicare’s interests and preserve the Medicare benefits of an injured claimant. An MSA may be necessary when a settlement closes or limits future medical benefits for qualified beneficiaries. This includes liability insurance, no fault insurance, self-insurance and workers’ compensation cases. Qualified beneficiaries are those persons currently receiving Medicare or are “reasonably likely” to receive Medicare benefits within 30 months of the date of settlement. Many factors must be taken into account in order to determine the MSA allocation. Factors include, but are not limited to, date of entitlement to Medicare, basis for Medicare entitlement, type and severity of injury or illness and age of beneficiary. The MSA is the CMS preferred method of setting aside funds as it offers the greatest level of protection for Medicare and Medicare beneficiaries.
Currently, CMS has established review thresholds for Workers’ Compensation cases only. However, cases that do not meet the threshold for review must still protect Medicare’s interests. The current monetary review thresholds for Workers’ Compensation settlements are when a claimant is a Medicare beneficiary at the time of settlement and the total settlement amount is $25,000.00 or greater or claimant is “reasonably likely” to be on Medicare within 30 months of the date of settlement and the settlement amount is $250,000.00 or greater. CMS has emphasized that the review thresholds can be changed at any time.
The MSA funds must be kept in a separate interest bearing account and can only be used to pay for Medicare covered services related to the injury. The MSA can be funded via lump sum or annuity. With lump sum funding, the entire amount of the MSA is funded all at once. With an annuity, the MSA is funded over a series of periodic payments. There are numerous benefits to using an annuity as the method of funding, including a guaranteed source of income as well as tax benefits. If you and the claimant agree to an annuity structure, our company can oversee the annuity process.
The MSA may be self-administered or professionally administered. Professional administration must be utilized with legally incompetent claimants. CMS maintains strict guidelines for MSA funds and a beneficiary could lose his or her Medicare benefits for improper expenditure. Therefore, it is advisable to utilize the services of a Professional Administrator. In the event you and the claimant agree to the use of a Professional Administrator, our company can facilitate the Professional Administration process through a reputable Professional Administration company. We will first obtain a quote for you in a timely manner to assess the overall cost of the Professional Administration process.
Workers’ Compensation cases meeting review thresholds should be submitted to CMS for review. CMS established a Workers’ Compensation web portal in November 2011 for online submission of the Workers’ Compensation Medicare Set-Asides. The determination as to whether or not to submit liability cases for review should made after consultation with an expert at Delta Settlements. Liability cases are currently reviewed on a case by case basis.
CMS approval is based on whether or not the amount allocated for future medical expenses is “reasonable” taking into account several factors. If Medicare approves the allocation as “reasonable” then Medicare will cover the injured person’s medical expenses once the MSA funds are properly exhausted.
If a proposed MSA is rejected the parties may provide additional information to justify their proposal. If the additional information is not sufficient for CMS approval and the parties proceed to settlement anyway, Medicare will not recognize the settlement. Parties may also contact the Regional Office (RO) that issued the determination to request clarification.
Please contact our office with questions surrounding the Medicare Set-Aside process. To request an MSA allocation, please fill out the MSA application and submit the requested documentation. The projected turn-around time for MSA completion is 14 days or less. Rush services are also available upon request.
