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Medicare Set-Aside Trust Account Lawyers

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What is a Medicare Set-Aside Account?

If you are settling a workers’ compensation or personal injury lawsuit, you may have to set up a Medicare Set-Aside Trust Account (MSA). The Medicare Secondary Payer Act recognizes that these settlements shift the burden of medical expenses from a private insurance company to the Federal Government. Medicare Set-Aside Accounts are a way to offset this expense.

If an MSA is required, you must place part of your workers’ compensation or liability settlement in a separate bank account. This money must be used to pay medical expenses related to your compensable injury. Once you have spent your entire Set-Aside Account, Medicare should cover any additional medical treatment.

When Is a Medicare Set-Aside Account Necessary?

If you are Medicare eligible, you must take Medicare’s interests into account when settling your workers’ compensation or personal injury case. Sometimes, you may voluntarily set an amount aside. However, certain cases require a formal approval from the Centers for Medicare & Medicaid Services (CMS).

Typically, you must get CMS’ approval in a workers’ comp claim if:

  • You are eligible for Medicare and your settlement exceeds $25,000, or
  • Your Medicare eligibility is reasonably expected within 30 months and your settlement exceeds $250,000.

If you do not meet these thresholds, you must take Medicare’s interests into account—but you do not have to seek CMS’ formal approval of your set-aside.

Currently, CMS has not set out clear thresholds or guidelines for liability claims. While you must consider Medicare’s interests in a liability or personal injury claim, you are not required to submit an MSA proposal to CMS. (While you may send a liability MSA proposal to one of CMS’ Regional Offices, the submission is voluntary at this time.)

How Do I Get a Medicare Set-Aside Account Approved?

If CMS approval is required, you must submit an MSA proposal containing extensive information about your medical conditions, treatment history, and related expenses. This information may be submitted either by mail or electronically through the Workers’ Compensation MSA Portal.

CMS will review your information, and decide how much money you must place in your Set-Aside Account. While there is not a formal appeal process, you may demand a re-review of your proposal if you disagree with CMS’ assessment. 

What Happens if I Don’t Set Up a Medicare Set-Aside Account?

If you do not set up a Medicare Set-Aside Account, you may be financially responsible for medical treatment related to your compensable injury. In these cases, Medicare may assume that 100% of your settlement was for future medical expenses—and require you to spend the entire amount of your settlement on related medical treatment before Medicare will cover the injury.

How Do I Manage a Medicare Set-Aside Account?

You may either hire a company to manage your Medicare Set-Aside Account or self-administer it. If you self-administer your MSA, you must provide an annual accounting to CMS. Each year, you will submit an “annual attestation” showing how you spent your MSA funds.

Once you have spent the entire MSA, you must file a Final Accounting with CMS. After your Final Accounting is processed and approved, Medicare should cover injuries relating to your workers’ compensation or personal injury claim. Additionally, your family may inherit your MSA funds if you do not spend the entire Set-Aside Account during your lifetime. 

What Is a Conditional Payment?

If Medicare paid for medical treatment related to a workers’ compensation or personal injury claim, you must also reimburse these “conditional payments.” Conditional payments are different than MSA’s. (Conditional payments address past treatment, while MSA’s deal with future medical.) Before settling your claim, you must contact CMS’ Benefits Coordination & Recovery Center and request a Conditional Payment Letter.

Once it receives your request, CMS will review your file and determine whether it paid for treatment related to your workers’ comp or personal injury case. It will issue a Conditional Payment Letter that describes the covered treatment and the amount that must be reimbursed. 

Can a Lawyer Help Me Create a Medicare Set-Aside Account?

Yes. There are lawyers and other businesses that specialize in Medicate Set-Aside proposals. The proposal process requires a lot of documentation and analysis. It is probably in your best interest to have a workers’ compensation lawyer or personal injury lawyer guide you through the process—and give you the best possible chance of a reasonable set-aside amount.

Photo of page author Leigh Ebrom

, LegalMatch Legal Writer

Last Modified: 10-18-2016 12:02 PM PDT

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