Medicare Secondary Payer Act

Medicare Set Asides


A Medicare Set-Aside (MSA) is the expected amount of money that Medicare would normally pay for medical and prescription drug expenses for a Workers’ Compensation or a third-party injury.

In settling open Workers' Compensation claims attorneys must represent Medicare's interests in settling the claim. The money put into the MSA is used to pay claimant costs once they are old enough to qualify for Medicare. Medicare will not pay for any treatments relating to the injury until the MSA has been spent in full.

Important Readings:

The Complete Guide To Medicare Secondary Payer Compliance

Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide

National Council on Compensation Insurance (NCCI) Research Brief - Medicare Set-Asides And Workers Compensation

Useful Websites:

Centers for Medicare & Medicaid Services (CMS) Web Site

CMS - Workers' Compensation MSA Web Site

CMS - Coordination of Benefits and Recovery (COB&R) News

CMS - COB&R Reports

National Alliance of Medicare Set-Aside Professionals webinars

Key Presentations:

Secondary Payer Act presentation at 2015 Casualty Loss Reserve Seminar

Reserving For Medicare Set-Asides - Session at 2013 CLRS

Medicare Second Payer Act - What Actuaries Need to Know (2011)

Things to Know:

A WCMSA is not recommended if ALL of the following apply:

(1) The facts of the case demonstrate that the injured individual is only being compensated for past medical expenses (i.e., for services furnished prior to the settlement);

(2) There is no evidence that the individual is attempting to maximize the other aspects of the settlement (e.g., the lost wages and disability portions of the settlement) to Medicare's detriment; and,

(3) The individual's treating physicians conclude (in writing) that to a reasonable degree of medical certainty the individual will no longer require any Medicare-covered treatments related to the WC injury.

However, if Medicare made any conditional payments for work-related services furnished prior to settlement, then Medicare requires recovery of such payments. Additionally, Medicare will not pay for any services furnished prior to the date of the settlement for which it has not already paid.

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