In what has become a familiar sight for Medicare Secondary Payer (MSP) rule watchers, CMS has released a notice to delay a proposed rule. This time it is in regard to Section 111 civil money penalty regulations that were announced three years ago. The final rule has now been pushed back for an additional year.


The Proposed Rule

On February 18, 2020, the Proposed Rule regarding MSP and Certain Civil Monetary Penalties (CMPs) 85 Fed. Reg. 8793 was released, and the agency opened a public comment period to allow for feedback until April 20, 2020. CMS was expected to complete and release its final rule within the standard three-year period for release, which in this instance would be sometime on or before February 2023.  The proposed rule can be found here.


Section 111 Background

The Section 111 penalty provision, which allows the Centers for Medicare and Medicaid Services (CMS) to impose Civil Monetary Penalties against NGHP RREs as follows:

    • Up to $1,000 for each day of noncompliance with respect to each claimant.
    • Up to $1,000 penalty amount will be adjusted annually for inflation under 45 CFR part 102.
    • Current maximum penalty amount as adjusted for inflation is $1,247.
    • As part of its NPRM, CMS outlines proposed situations when it could impose a CMP, along with specific instances when it would not impose a CMP.



    This final proposed rule specifies how and when CMS must calculate and impose civil money penalties (CMPs) when group health plan (GHP) and non-group health plan (NGHP) responsible reporting entities (RREs) fail to meet their MSP reporting obligations in any one or more of the following ways: When RREs fail to register and report as required by MSP reporting requirements; when RREs report as required, but report in a manner that exceeds error tolerances established by the Secretary of the Department of Health and Human Services (the Secretary); when RREs contradict the information the RREs have reported when CMS attempts to recover its payments from these RREs. This proposed rule would also establish CMP amounts and circumstances under which CMPs would and would not be imposed.


    Extension Timeline for Publication of Final Rule

    On February 18, 2023 the Federal Register published the Medicare Secondary Payer of Certain Civil Money Penalties, Extension of Timeline of Final Rule.  Along with the filing, CMS admitted it was “not able to meet the initial targeted 3-year timeline for publication due to delays related to the need for additional, time-consuming data analysis resulting from public inquiry.” The agency has extended the timeline for another year and has until February 18, 2024 to release the announcement.  Click here to read the memo.


    Stay Informed

    If you would like to stay current on CMS updates, industry changes, and the latest happenings at Medivest, please sign up today for the Medivest blog. All updates will be sent directly to your email the day they are posted. For additional questions regarding any new regarding CMS or MSP Compliance please contact us here.


When an individual has a Medicare Set-Aside (MSA) account, they have the option to either self-administer the funds or have them professionally administered.  If self-administration is chosen, it can be a difficult and trying task to comply with the CMS’ rules; opening a MSA checking account, learning what type of expenses can be paid and cannot be paid out, coordinating health insurance benefits, keeping accurate records, and when to send reporting to CMS.  This blog will discuss what you need to know if you choose Self-Administration, and if self-administering your MSA is the right choice for you.

What is Self-Administration?

Self-administration is the process of managing the medical portion of your settlement, compromise and release, judgment, award or other payment/arrangement (“Settlement”) arising from an incident on the job and/or due to the negligence of another party. After a settlement, the individual is responsible for paying the medical claims following the process and guidelines set forth by the Centers for Medicare & Medicaid Services until the funds have been permanently depleted.

What is Professional Administration? 

Professional administration is the practice of using a qualified third party to oversee and manage funds for future medical expenses following a liability or Workers’ Compensation settlement. Though not required, Medicare strongly suggests the professional administration of a MSA. However, for those who choose self-administration, the individual is still responsible for using their MSA account to pay for injury-related and Medicare covered expenses in accordance with the Medicare Secondary Payer (MSP) Statute. The MSP provisions protect Medicare Trust Funds by ensuring that Medicare does not pay for items and services that certain health insurance or coverage, such as a MSA account, is primarily responsible for paying.

Two Ways to Fund Your MSA Account

Before the settlement has occurred, the settling parties will discuss the ways a MSA account can be funded. Typically, there are two options:
  1. Lump-Sum – a single lump sum payment to fund your MSA account.
  2. Structured Settlement Annuity Funding – an initial deposit to fund your account and smaller annual deposits in the following years. The initial deposit covers the first two years of annual funding for treatments plus any cost for proposed first surgeries. If the MSA funds are not spent down in a given year, the funds must remain in the account and carry forward into the next year.

Establishing a Self-Administration Bank Account

Below is a list of CMS’ requirements regarding opening up a separate bank account for the MSA funds.
  • Deposit MSA funds into its own account, separate from any other accounts you may have
  • The account must earn interest and the interest must stay in the account
  • The account should be insured by Federal Deposit Insurance Corporation (FDIC)
  • Choose a bank or an account that does not charge fees if you have a low balance
  • Select an account that allows you to write checks


Know What Is Covered

It is important to recognize that not every medical bill or service can be paid out of the MSA account. For individuals self-administering their account, it is highly important to be aware of qualified expenses. Below is a partial list of the expenses that can and cannot be paid out of the account:

Expenses That Can Be Paid

  • Funds can only be used to pay for future care that is Medicare covered and related to your injury.
  • Cost of copying documents
  • Mailing fees/postage
  • Any banking fees related to the account
  • Paying income tax on the interest income earned in the account*
*Note – The MSA funds are not considered taxable income, but the interest earned is taxable. Each year your bank will issue an IRS 1099-INT form for the interest earned in the account.

Expenses That Cannot Be Paid

  • Fees for trustees, custodians, or other professionals hired to help administer the account
  • Expenses for administration of the MSA other than those listed above
  • Attorney costs for establishing the MSA
  • Cannot use to purchase a Medicare supplemental insurance policy or a Medigap policy
  • Medicare premiums, co-payments, and deductibles
  • Acupuncture
  • Routine dental care
  • Eyeglasses
  • Hearing aides
For a more extensive list of what Medicare will pay, click here to obtain a copy of the free handbook “Medicare & You”.

Keep Accurate Records of All Transactions

Bank statements, receipts, and tax records should all be kept and recorded.  Self-administering parties will not need to submit these records annually, but Medicare may request them as proof that the account is being used correctly. It is also recommended that settlement documents showing the date the case was settled, diagnosed injury, and date of injury are also kept. Consider keeping accurate records for each transaction such as:
  • Transaction date
  • Check number
  • “Payable to” or provider’s name
  • Date of service
  • Description – procedure, service or item received, deposit, interest, other allowable expenses
  • Amount paid
  • Deposit amount
  • Account balance
  • Interest earned

What is Coordination of Benefits for a MSA?

The MSP program is in place to ensure that Medicare is aware of situations where it should not be the primary payer of claims.  Sometimes a Medicare beneficiary with a MSA account, public benefits, and other health insurance; the Coordination of Benefits (COB) rule decides which entity should pay first on a claim. In certain situations, if Medicare has paid a claim by mistake, CMS will take action to receive the mistaken Medicare payment.

What is the MSA Attestation?

If the MSA proposal was approved, CMS requires the attestation form to be signed, attesting that the injured party has used the account correctly and to report the amounts spent. If Medicare is satisfied that the right amount of money has been spent appropriately, Medicare will pay for future treatments for this work injury. Below is the information found on the attestation form.
  • Total spent for medical services
  • Total spent for prescription drugs
  • Grand total of expenditures
  • Total of interest income the account earned if any
  • Balance of MSA account at the end of the calendar year

Annual Attestation or Expenditure Letters Reporting

CMS’ Benefit Coordination & Records Center (BCRC) is responsible for monitoring and receiving the submitted attestations forms. The attestation informs Medicare that they are now primary payer when your funds have exhausted.  Note, once the account funds are exhausted you must continue to pay your Medicare monthly premiums, co-pays, and deductibles in order for Medicare to pay your claims. CMS has the right to demand and receive a complete accounting of payments made from the account at its discretion. The following only applies if the MSA proposal has been approved by CMS.
  • Annual Attestations must be submitted every year, no later than 30 days after the end of each reporting period (beginning one year from the date of establishment of the MSA account). Annual attestations should continue through final exhaustion of the account.
  • Temporary Exhaustion occurs when the MSA account funds have exhausted before the next annuity has been deposited into the account.
  • Final Depletion or Permanent Exhaustion is where the MSA account has no money left and no future deposits of funds are expected.
  • Death Occurs / Inheritance before the MSA account is permanently exhausted you will need to notify the BCRC of death. This may require the MSA account to stay open for some time to pay outstanding claims.
  • Completely Exhausted within 60 days of the date the MSA account is depleted, send the BCRC a final attestation that the account is ‘Completely Exhausted”.
  • Loses Medicare Entitlement
  • Re-Establishes Medicare Entitlement

How to Submit Your Attestation to CMS’ BCRC

  1. Electronical Attestation is a Medicare web portal that allows submission of either yearly or final attestations electronically. For more information about how to submit an attestation electronically, please see the MSAP User Guide.
  2. Mail-in Submission / Paper Copy

MSA Proposal/Final Settlement
PO Box 138899
Oklahoma City, OK 73113-8899

  1. Call BCRC

855-798-2627 or TTY/TDD
855-787-2627 for the hearing and speech impaired
Opened: Monday – Friday, from 8am – 8pm | Eastern Time

Medivest’s Solutions

If handling a Self-Administrated account becomes too difficult of a task, Medivest can help. We provide the following options that may reduce the burden of keeping track of the details:
1. Switch to Medivest’s Professional Administration Service
For over 25 years, Medivest has been helping clients navigate the complexities of the MSP and protecting their Medicare benefits. Our services guarantee the most comprehensive and cost-effective professional administration program available and provides:
  • Streamlined reporting and compliance
  • Savings on treatment, equipment, and pharmaceuticals
  • Expert support and service
2. Purchase Medivest’s Self-Administration Kit
Medivest offers a Self-Administration Kit that equips individuals who opt to manage their own Worker’ Compensation or Liability settlement with many of the tools and services available to Professionally Administers settlements. The Medivest Self-Administration Kit has been designed to give the individual the flexibility in determining just how “hands-on” they wish to be in managing their medical funds, while providing to the settling parties the piece of mind that comes from knowing due diligence has been considered.   Below are the services that are included Medivest’s Self-Administration Kit Services:
  • Detailed Booklet
  • Unlimited Phone
  • Medical Bill Review
  • Pharmacy and Durable Medical & Equipment (DME) Discounts


For additional information regarding Medivest’s Professional Administration Services or Self-Administration Kits or to get started with one of these options today call us at 877.725.2467 or contact us here.



It is getting close to that time of year when mailboxes begin to receive W-2 statements and 1099-INT statements.  If an injured individual has either a Self-Administered Medicare Set-Aside (MSA) account or a Professionally-Administered MSA account, the individual will be sent a 1099-INT by January 31st and a copy will be filed with the IRS. The 1099-INT shows interest earned in the account during the previous tax year.
Liability and Workers Compensations cases should follow the Workers Compensation Medicare Set-Aside (WCMSA)Reference Guide, until CMS publishes a Liability Medicare Set-Aside (LMSA) Reference Guide.  Until then, the WCMSA Reference Guide should be considered a single point of reference for Liability and Workers Compensation cases. To download the WCMSA Reference Guide Version 3.8, Dated November 14, 2022, click here.


What the WCMSA Reference Guide states:

  • MSA funds must be placed in an interest-bearing account that is separate from the individual’s personal savings and checking accounts.
  • The interest must be deposited into the MSA account to be used for MSA-covered expenses.
  • You can use the MSA account to pay for the income tax on the interest income.
For further clarification regarding how the individual can pay for the taxes from the interest incomed earned in their account, refer to the CMS Memo Dated July 11, 2005, Subject:  Medicare Secondary Payer (MPS) – Workers’ Compensation (WC) Additional Frequency Asked Questions.
“Q6. Treatment of Taxable Interest Income Earned on a WCMSA – If I receive a Form 1099-INT for the interest income earned on my WCMSA account, may I charge the income tax on that amount against the WCMSA?
A6. Assuming that there is adequate documentation for the amount of incremental tax that the claimant must pay for the interest earned on this set-aside account, the claimant or his/her administrator may withdraw an amount equal to the additional tax as a “cost that is directly related to the account” to cover the additional tax liability. Such documentation should be submitted along with the annual accounting.”


How Medivest Handles the 1099-INT:

Medivest will advise the Member to prepare his/her tax return two ways to determine the increased income tax burden, if any:
  1. Include the MSA interest income in the income tax return
  2. Exclude the MSA interest income in the income tax return
In other words, if the Member must pay the IRS an increased income tax amount as a result of the interest earned from their MSA account, the additional income tax burden can be paid from the MSA account.  This is considered a cost associated with having the MSA account and CMS allows this expense to be paid from the MSA account.  Once a year, Medivest will send CMS an attestation for every applicable professionally-administered MSA account.  Any MSA reimbursement of the additional income tax burden will be included in this attestation.


Answers to Common Questions

Question 1.  If I am taxed on the earned interest, why can’t I have it?
Answer 1.  CMS’ guidelines state that Medicare Set-Aside funds place must be placed into an interest-bearing account and are to be used for covered medical expenses.
Question 2.  Why do I have to report the earned interest to the IRS?
Answer 2.   Per IRS guidelines, all interest income is taxable, unless specifically excluded.
Question 3.  Isn’t my injury settlement tax-exempt?
Answer 3.  Any compensation you receive from a settlement because of physical injuries or sickness is not taxable.   However, the interest earned after the settlement occurs is taxable.


Best Practices

Medivest’s highly trained representatives can help you figure out if Medicare may have an interest in your settlement. We assist all settling parties to navigate the MSP complexities and provide you with cost-saving strategies for your settlement. For questions about your account or setting up a new professional administration account please contact us here.



On Tuesday, December 6, 2022, Centers for Medicare & Medicaid Services (CMS) will be hosting a webinar entitled, “Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation”. The full notice can be read below:



CMS will be hosting a Section 111 NGHP webinar. The format will be opening remarks by CMS, a presentation that will include NGHP reporting best practices and reminders followed by a question and answer session. For questions regarding Section 111 reporting, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110-

Date:          December 6, 2022
Time:          2:00 PM ET

Webinar Link:

Passcode:  001534

Or to connect via phone:

Conference Dial In:          1-833-568-8864
Conference Passcode:    160 481 6351

Due to the number of expected participants please log in at least 10 minutes prior to the start of the presentation.


Additional information about recent updates from CMS can be found here. If you have questions on how topics discussed in this webinar may affect your clients, please contact Medivest here or call us at 877.725.2467.



The Centers for Medicare & Medicaid Services (CMS) released a revised Workers’ Compensation Medicare Set-Aside Arrangement (WCMSAReference Guide (“Reference Guide”) Version 3.8 on November 14, 2022. This Reference Guide replaces Version 3.7 which was released on June 6, 2022. There are a few notable changes when comparing the two Reference Guides.

CMS’s Version 3.8 Reference Guide, Section 1.1 includes the following changes:

Changes in This Version of the Guide Version 3.8 of this guide includes the following changes: Clarification has been provided regarding re-review requests when errors exist in the submission documentation, as well as re-review limitations (Sections 16.1 and 16.2). Note: These re-review changes are only available for approvals from September 1, 2022 forward.

To download the new WCMSA Reference Guide v3.8 Click Here.

For your convenience, we have included the entirety of Section 16.1 and 16.2, so you will have the most up to date information regarding the process of re-review:

16.1 Re-Review

When CMS does not believe that a proposed set-aside adequately protects Medicare’s interests, and thus makes a determination of a different amount than originally proposed, there is no formal appeals process. However, there are several other options available. First, the claimant may provide the WCRC with additional documentation in order to justify the original proposal amount. If the additional information does not convince the WCRC to change the originally submitted WCMSA amount and the parties proceed to settle the case despite the lack of change, then Medicare will not recognize the settlement. Medicare will exclude its payments for the medical expenses related to the injury or illness until WC settlement funds expended for services otherwise reimbursable by Medicare use up the entire settlement. Thereafter, when Medicare denies a particular beneficiary’s claim, the beneficiary may appeal that particular claim denial through Medicare’s regular administrative appeals process. Information on applicable appeal rights is provided at the time of each claim denial as part of the explanation of benefits.


A request for re-review may be submitted based one of the following:
  1. Mathematical Error: Where the appropriately authorized submitter or claimant disagrees with CMS’ decision because CMS’ determination contains obvious mistakes (e.g., a mathematical error or failure to recognize medical records already submitted showing a surgery, priced by CMS, that has already occurred), or
  1. Missing Documentation: Where the submitter or claimant disagrees with CMS’ decision because the submitter has additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal and which warrants a change in CMS’ determination.
    • Disagreement surrounding the inclusion or exclusion of specific treatments or medications does not meet the definition of a mathematical error.
    • Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.
    • Should no change be made upon response to a re-review request (i.e., no error was identified), additional requests to re-review the same error will not be entertained.
  1. Submission Error: Where an error exists in the documentation provided for a submission that leads to a change in pricing of no less than $2500.00, a re-review request may be made by submitting updated documents free of errors that caused the original review outcome. Amended documents must come from the originators with appropriate notation to identify that the error was corrected, along with the date of correction and no less than hand-written “wet” signature of the correcting individual. Note: This submission option is only available for approvals from September 1, 2022 forward.
    • Examples include, but may not be limited to; medical records with incorrect patient identifying information or rated ages where the rated-age assessor provided incorrect information in the rated-age document.


16.2 Re-Review Limitations

Note: The following re-review limitations are only available for approvals from September 1, 2022 forward.
Re-review shall be limited to no more than one request by type.
Disagreement surrounding the inclusion or exclusion of specific treatments or medications does not meet the definition of a mathematical error.
Re-Review requests based upon failure to properly review already submitted records must include only the specific documentation referenced as a basis for the request.


Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467.



On October 13, 2022, in a surprise move, CMS withdrew its Notice of Proposed Rulemaking (“NPRM”) pertaining to the protection of Medicare’s future interests in liability and other Non Group Health Plan (“NGHP”) settlements, judgments, awards, payments, or other arrangements (“Settlements”) without any official or unofficial comment.  Many people in the Medicare Secondary Payer Compliance industry felt that this NPRM, most recently announced in 2018 and continued for several years, was finally going to add CMS’s clarifying “take” on how it would suggest settling parties reasonably consider and protect Medicare’s future interests in liability Settlements and that CMS would issue regulations or guidance specific to Liability Medicare Set-Asides (“LMSAs”).


The most recent 2018 iteration of the NPRM was designed to address protection of Medicare’s future interests in any NGHP Settlement, including removing what it considered obsolete regulations.  For the past several years, stakeholders in the MSP compliance community have been waiting and speculating how such regulations could be devised to account for all the convoluted factors that exist in liability claims while adding clarity to steps CMS might suggest to be taken to protect Medicare’s interests in liability settlements.


Earlier in 2022, there had been a stakeholder meeting as well as a letter from the MARC coalition urging CMS to not move forward with the NPRM.  It seems that the MSP compliance stakeholder community once again rallied and provided enough reason to give CMS pause.  Some have called into question whether the MSP as enacted, gives CMS authority to issue regulations regarding liability futures, and some court decisions discussing liability MSAs and the need for an exhaustion of administrative remedies prior to a court of competent jurisdiction being able to review a LMSA proposal, may have also contributed to CMS’s decision to not move forward with this NPRM at this time.


The argument follows if federal courts have determined it is premature to review proposed LMSAs due to the failure of a party to exhaust their administrative remedies with CMS, then how could CMS insert its own administrative review process via guidance or regulation, unless the MSP were amended to provide for that authority.  Examples of court cases discussing these issues, include Silva v. Burwell, 2017 WL 5891753 (D. N.M. 2017); Sipler v. Trans Am Trucking, Inc., 881 F.Supp. 2d 635 (D. N.J. 2012); Bruton v. Carnival Corporation, 2012 WL 1627729 (S.D. Fla. 2012); Abate v. Wal-Mart Stores East, L.P., 2020 WL 7027481 (W.D. Pa. November 30, 2020); and Stillwell v. State Farm, et. al., 2021 WL 4427081 (M.D. Fla., September 27, 2021).



  • The MSP still forbids Medicare from making payment when a primary plan is in place meaning if there is a Settlement from a NGHP plan including from a liability carrier or self-insured defendant, Medicare has a statutory lien right under the MSP to recover its conditional payments minus procurement costs and can charge high interest and potentially even double damages for non-compliance.
  • If a current Medicare beneficiary settles a liability case, they should be informed about the MSP and a plan for future care should be set in place.  The federal law is clear that conditional payments could arise prior to or after a settlement, so a risk tolerance cost benefit analysis should be performed between attorney and plaintiff as to the best steps to ensure Medicare is not prematurely billed.
  • Medicare has the right under the MSP to deny payment for injury related future Medicare covered medicals (items, services, and expenses, including Prescription Drug Expenses).  Will it?  We have seen times when it has flagged liability cases even while a liability claim or portion of a liability claim is pending (often because it believes the matter was settled but it was only settled with one of several defendants/carriers).  While CMS does not seem to regularly do this, the goal for an attorney representing an injured plaintiff is to provide a settling plaintiff with enough information to make an informed decision regarding what is the best course of action for them and to document what decision was made after such informed consent was provided.
  • Only two federal circuits (3rd and 11th) have held Medicare Part C – Medicare Advantage Plans (MAPs) to have identical recovery rights as traditional Medicare under the MSP.  However, those MAPs still have contractual subrogation rights, and attorneys representing Defendants, as well as attorneys representing their plaintiff clients, should evaluate whether any MAP plan or Medicare Part D – Prescription Drug Plan (PDP) have a subrogation/lien interest to be reimbursed for pre-settlement payments that were compensated by the Settlement.
  • Each attorney should provide their clients with enough information to help them assess their risks and to determine if denial of injury related future medicals or the potential for recovery of future conditional payments by Medicare is a risk they are willing to take.  There are a wide range of products being offered to address MSP exposure and to protect Medicare’s interests in liability settlements based on the varying risk tolerance levels of your client.  Count on Medivest to help you spot these intricacies so you can deliver prudent advice to your clients.


As background, the Medicare Secondary Payer Statute, found at 42 U.S.C. Section 1395y(b)(2), or most commonly known as the MSP, is the federal law enacted in 1980 that amended the Social Security Act and its Medicare specific amendments to make health plans other than Workers’ Compensation to be primary to Medicare.  Workers’ Compensation plans were primary to Medicare from Medicare’s enactment into law in 1965.  The MSP was Congress’ mandate to Medicare and The Centers for Medicare & Medicaid Services (“CMS”), the subagency that administers Medicare, forbidding Medicare from making payments when a primary plan was in place to promptly make payment.  The primary plans are liability including self-insureds (and automobility BI), No Fault, and Worker’s Compensation and are known as the Non Group Health Plans (NGHP) to be distinguished from Group Health plans that offer health care insurance.  While No Fault claims and Workers’ Compensation claims are typically paid immediately upon a claim being filed and accepted for Ongoing Responsibility for Medicals (“ORM”), liability carriers rarely accept responsibility to make payments early on in the life of a liability case.  Liability carriers may choose to offer a settlement but almost never accepts liability.


Because the regulations under the MSP define prompt payment as within 120 days, the MSP also allows Medicare to make payments for medical services when a Medicare beneficiary will be compensated by a defendant in a liability case or their/its primary plan carrier under the condition that Medicare be able to recover those conditional payments it made that were claim related and compensated by a settlement, judgment, award, or other arrangement (collectively, “Settlement”).  The MSP makes the primary plan Defendant, and any person or entity who receives a part of the Settlement proceeds, jointly and severally liable for repayment of conditional payments.  The law also allows for interest and potentially double damages against liable people and entities that fail to make payment promptly.


The payment by any NGHP plan is what triggers the MSP’s recovery rights under the law regardless of whether liability is accepted or not.  The protection of exposure to the MSP’s recovery rights is also commonly referred to as protecting Medicare’s past and future interests in a Settlement.  Protecting Medicare’s past interests in a settlement includes providing notification of a claim and checking with CMS to determine whether it is claiming any payments it has made from the date of an injury up to the date of settlement are conditional payments to be reimbursed.  Plaintiff attorneys typically provide this type of notification or hire third parties to confirm whether there are any conditional payments and then report settlement details to obtain a discount from the conditional payment amount and obtain a demand from CMS reflecting a deduction for pro-rated fees and expenses allowed under the regulations to the MSP.


The regulations to the MSP include some regulations that are generally applicable to any of the NGHP plans and some that are specific to Workers’ Compensation claims and Settlements.  CMS has never promulgated regulations that are specific to liability claims or No Fault claims and Settlements.  CMS has also issued guidance regarding the protection of Medicare’s future interests in Workers’ Compensation claims and Settlements via its Workers’ Compensation Medicare Set-Aside Arrangement (“WCMSA”) Reference Guide, now in version 3.7 issued June 6, 2022.


In 2012, CMS issued a Notice of Proposed Rulemaking regarding the protection of Medicare’s future interests in settlements intended to extend from the already regulated area of Workers’ Compensation (“WC”) Settlements to the other NGHP areas and even solicited comments from the MSP stakeholder community.  After many entities pointed out the extreme differences between liability claims and WC claims such as issues of comparative or contributory negligence, the fact that liability claims often contain awards for Pain and Suffering, Loss of Enjoyment of Life, Loss of Consortium for married plaintiffs, etc., CMS ultimately withdrew that NPRM in 2014.



During the settlement process, a personal injury attorney needs to consider what government/public benefits their client is enrolled in and what they may be eligible for in the future. Several questions need to be asked. Have you considered Medicare’s interest in the settlement?  How will the settlement proceeds be handled?  Will a lump sum payment disqualify them from their government benefits? These questions need to be addressed because a client’s settlement could have long-lasting financial implications.
When it comes to settling a case with public benefits there are many nuances to consider. Hiring a team of experts such as an Elder and Special Needs Law Attorney, a Structure Settlement Broker, a Medicare Set-Aside (MSA) Allocator, and/or a Trust Advisor can assist you in protecting your client’s benefits and preserving the settlement proceeds.


Getting Familiar With Public Benefits

Public benefits can either be federal or state-run programs.  If the benefits program is run by the state, each state has its own set of criteria for eligibility.  Needs-based public benefits are also known as asset means-tested public benefits.  Asset means-tested means that eligibility is based on an individual’s income level and assets.  To learn more about all the different types of government benefits Gov/Benefits.
Government benefits are categorized into two types which are Needs-Based Benefits and Entitlement Benefits.
  1. Needs-Based Benefits – Also referred to as “means-tests,” these are based on an individual’s income and/or assets
  2. Non-Needs Based Benefits Aka Entitlements Based – These are determined by what an individual has contributed or paid into a given benefits system

Common Government Benefits

Below is a list and summary of the most frequently used government benefit programs. However, this is not a complete list, and a full investigation of a client’s use of government benefits should be conducted before the settlement process begins.


Government national health insurance program in the United States, begun in 1965 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services. It is intended for people who are 65 or older,  certain younger people with disabilities, and people with end-stage renal disease.

Social Security Disability (SSDI)

Payroll tax-funded federal insurance program of the United States government. It is managed by the Social Security Administration and designed to provide monthly benefits to people who have a medically determinable disability that restricts their ability to be employed.

Social Security Income (SSI)

Means-tested program that provide cash payments to disabled children, disabled adults, and individuals aged 65 or older who are citizens or nationals of the United States.


Health coverage programs operated by states, within broad federal guidelines. Although the federal government pays a portion of the costs, Medicaid is administered and operated by states, and each state’s program is different and based on the needs and goals of the individual state.

Medicaid Adult / Disability-Based

  • Permanently disabled & unable to work
  • Only Income Test applies in California
  • Income & Asset Test applies
  • Supplemental Security Income (SSI) recipients
  • In-Home Support Services (IHSS) recipients
  • Home & community-based waivers participants
  • Long-Term Care Facility residents

Medicaid Adult / Non-Disability Based

  • Able to work & income is below the Federal Poverty Level (FPL)
  • MAGI Medicaid on household income
  • Assets are not counted toward
  • Pregnant women

Medicaid – Children Health Insurance Program (CHIP)

This program is administered by the United States Department of health and Human Services that provides matching funds to states for health insurance to families with children.

Section 8 – Housing Assistance

The housing choice voucher program aids very low-income families to afford decent, safe, and sanitary housing. Housing can include single-family homes, townhouses and apartments and is not limited to units located in subsidized housing projects. Housing choice vouchers are administered locally by Public Housing Agencies (PHAs).

Veterans Administration (VA)

The United States Department of Veterans Affairs of the federal government providing life-long healthcare services to eligible military veterans at VA medical centers and outpatient clinics.

Our Complimentary Reference Guide for Government Benefit Protection

For further information on how to protect your clients’ government benefits after a settlement, Medivest would like to provide the following data chart. It summarizes a variety of public benefit programs and the best course of action you can take to ensure their benefits are protected.  Click here to download.


As an attorney, you may need to know how to negotiate a settlement for a client with a medical lien. Those with personal injury claims after accidents often seek legal representation to negotiate with insurance companies for compensation to cover medical costs associated with the accident.

If you’re lucky, the lien negotiation process may involve little more than presenting a demand letter and supporting documents to the insurance company and making a few calls to an insurance adjuster. However, getting the best settlement for your client is more likely to involve lengthy negotiations with the adjuster. With the tips below, we can help you negotiate the best possible settlement for your clients with medical liens.

Tips for Getting the Best Settlement When Negotiating Medical Liens

Follow the tips below to develop a settlement negotiation strategy and get your client the best possible settlement.

1. Develop a Litigation Strategy

Though it can be tempting to view each personal injury case like any other case with a familiar pattern, you should develop a unique litigation strategy for each claim rather than relying on a universal approach. At the beginning of litigation and throughout the process, speak with your client about their objectives.

Some clients want the case to end as quickly and inexpensively as possible, while others may want to pursue the best possible settlement as long as it takes. A client’s objectives could change during the litigation process, which is why it is essential to maintain candid communications throughout.

2. Identify an Acceptable Settlement Amount Range

When you compile your demand letter, you should determine what you expect for a settlement amount for your client’s claim. You can estimate the value of a claim based on the total medical expenses incurred due to the injury and income lost due to the injury. Your client’s pain and suffering may also factor in.

Determine the minimum amount you will accept for a settlement before you discuss your demand with an adjuster. Though you won’t reveal this amount to the adjuster, it’s helpful to keep this number in mind during negotiations to ensure you stay on track.

Keep in mind that you can be flexible, of course. If the adjuster identifies facts that weaken your claim, you may want to lower the minimum figure you will accept. On the other hand, if an adjust begins with an offer near your minimum, consider increasing your acceptable minimum amount.

3. Collect the Most Important Information

Each side should have all the information needed to agree to a reasonable settlement. You can ensure settlement negotiations are successful by identifying and collecting the information that will make the greatest difference for your client. If the other side wants discoverable information, produce these details before settlement negotiations. This approach is often in your client’s best interest, as withholding important information may not actually be favorable to your side.

you can ensure settlement negotiations are successful by identifying and collecting the information that will make the greatest difference

4. Sit on the First Offer

When it comes to successfully negotiating personal injury settlements, the first offer is just the start. An insurance adjuster’s first offer may be incredibly low to determine how to proceed. Even if the first offer is more reasonable and not simply a negotiating tactic, it may still be too low to accept. The purpose of negotiating is to see whether you can get more compensation for your client.

5. Make a Counteroffer

If you find the offer reasonable, make a counteroffer that falls just below the amount in your demand letter. This will demonstrate to the insurance adjuster that you are reasonable and willing to compromise with them. With some bargaining, you may be able to quickly come to a settlement amount that you both consider fair and reasonable.

6. Determine the Best Context for Discussing a Settlement

Settlement negotiations can occur in several different contexts. For example, if you have a good rapport with another lawyer, then direct negotiations may be effective, especially when money is the primary or sole topic of negotiation. If there are several variables affecting the settlement or your client wants more control in the negotiations, this may not be the best option.

If your clients or the other party desires a day in court, a settlement conference may be the best context for discussing a settlement. Keep in mind that judges are available only for a limited amount of time, and some judges don’t have mediation expertise or want to conduct settlement discussions. The occurrence of the settlement conference and whether a settlement was agreed upon will also be information available to the public.

Private mediation is another option and may be ideal if you want to keep the negotiations confidential. You and the other parties involved can agree on a mediator and select a convenient location and time to meet for negotiations. Unlike a judge, your mediator will be available as long as it takes to reach a settlement.

7. Confirm the Settlement Terms in Writing

Once you finally agree to a settlement with the insurance adjuster, confirm the settlement’s terms by putting them in writing. You will detail the terms of the settlement in a letter for the adjuster. You can keep the letter brief and include the settlement amount, the damages or injuries covered by the settlement and the specific date you expect to get the settlement documents from the insurer.

Why You Should Work With Lien Resolution Professionals

Lien resolution professionals like those at Medivest investigate subrogation claims for clients to ensure validity and identify the legitimate charges. There are several advantages to working with lien resolution professionals. Some of the benefits of utilizing our medical lien resolution services at Medivest include:

  • Expertise: At Medivest, our team of lien resolution professionals has specialized experience and knowledge to leverage while working to resolve claims.
  • Reductions: We have the negotiation skills and extensive knowledge needed to request available reductions.
  • Efficiency: We centralize tasks to ensure operations and reporting are streamlined and more efficient.
  • Lower potential liability: If you work with lien resolution professionals, you are less likely to deal with claims from insurance companies for repayment.
  • Improved client experience: Your clients will be less likely to be called by subrogation companies that are seeking direct reimbursement when we help you discover and resolve eligible liens.
  • Effective expense and time management: In your state, you may be permitted to include services from Medivest as a case related cost, allowing you to return your focus to client service.

The lien resolution professionals at Medivest can help you negotiate with lienholders, meet your client’s needs and secure a larger net settlement for them.

contact Medivest today to learn more about medicare liens and settlements

Contact Medivest Today to Learn More About Medicare Liens and Settlements

At Medivest, we work with attorneys to manage Medicare settlements and funds. Before contacting Medicare, we make sure an injured person receives coverage from other sources, such as workers’ compensation and insurance. We can help you comply with the Medicare Secondary Payer Act, as we are a leading provider of MSP compliance solutions.

If you are overworked and dealing with complex liens, partner with Medivest. We provide an array of settlement services, and we’ve celebrated big wins for lien resolution. Contact us at Medivest today to learn more about negotiating Medicare liens.



In liability or workers’ compensation settlements, all parties need to consider how the agreement affects Medicare. Typically, this assessment comes in the form of a Medicare Set-Aside (MSA) proposal or report. The MSA report is a detailed outline of anticipated expenses for the injured party. It can protect you from several adverse events and provide clear guidance throughout the course of the settlement.

Still, Medicare requirements can be complex, so you may have some questions about how MSA works and what you need to do to set it up properly. To help, we’ve put together a Medicare Set-Aside FAQ with some of the top questions.

the MSA is a portion of the settlement dedicated to future injury-related medical expenses that would otherwise be covered and reimbursed by Medicare

What Is Medicare Set-Aside?

The Medicare Secondary Payer (MSP) statute stipulates that Medicare doesn’t need to pay for an injured person’s medical expenses when another entity — such as a United States workers’ compensation law or plan — pays or can be reasonably expected to pay for the care.

Essentially, when future medical expenses are involved, the parties must try to protect Medicare’s interests and cannot shift the costs to the Centers for Medicare and Medicaid Services (CMS). To do so, settlement parties can create a Medicare Set-Aside. The MSA is a portion of the settlement dedicated to future injury-related medical expenses that would otherwise be covered and reimbursed by Medicare.

You’ll see both Workers’ Compensation Medicare Set-Asides (WCMSAs) and Liability Medicare Set-Asides (LMSA). They work similarly and cover elements like treatments, prescription drugs and administration costs. The details of the MSA account are outlined in a MSA report or proposal.

Based on many factors, such as the expected treatment and the beneficiary’s life expectancy, this report identifies the predicted costs for their medical expenses. It also provides details about the account’s usage, including whether funds are given in a lump sum or through structured annuity and information on drug frequency, dosage and predicted costs.

The funds for MSA go into a certain account and the administrator must provide detailed information about how the expenses are paid out. For instance, they may submit records of the beneficiary’s receipts for medical transactions. This step helps ensure Medicare will pay for future expenses if the funds run out.

Are Medicare Set-Asides Required?

No, MSAs are not required. However, not creating one when Medicare is likely to be involved can cause problems. Without an approved MSA report, CMS could refuse to pay for future medical expenses until the full settlement is exhausted. It could also enact priority right of recovery and take payments back from entities that received any portion of third-party payments.

While not required, MSA creates a detailed document that shows Medicare that you considered their interests during the settlement. If you submit it to CMS and receive approval, you also have documentation that CMS validated the amount and accuracy of the report.

When Is a Medicare Set-Aside Required?

Again, a MSA is not required, but CMS suggests it in the following situations:

  • When the injured individual is receiving Social Security Disability or Retirement.
  • When the injured individual is age-eligible or within 30 months of becoming a Medicare beneficiary.
  • When the injured individual is eligible for or already receiving Medicare.

CMS will review MSA proposals if:

  • The claimant is a Medicare beneficiary and the settlement totals more than $25,000.
  • The claimant is reasonably expected to enroll in Medicare within 30 months of the settlement date and the anticipated settlement amount — for future medical expenses and disability or lost wages over the life or duration of the agreement — is more than $250,000.

How Do You Calculate Medicare Set-Asides?

Calculating MSA amounts is done through a MSA report. It includes all injury-related services or items that Medicare would otherwise cover. While MSAs are generated on a case-by-case basis, some of the factors involved include:

  • Workers’ compensation fee schedules.
  • Usual and customary charges and actual charges, according to drug payment histories and claims payments.
  • Medical records and bills.
  • Facility and provider fees.
  • The individual’s age, location and other relevant details.

Can You Avoid a Medicare Set-Aside?

You can bypass the MSA, but remember, if the settlement involves future medical expenses and potential Medicare benefits, we recommend against it. Federal law under MSP prevents any attempts to shift costs to Medicare. Without the MSA, you haven’t shown that you performed due diligence and may be at risk for negative effects, like refusal to pay and right of recovery from CMS.

If CMS finds the MSA account was underfunded, it can deny payment for case-related Medicare-covered expenses up to the beneficiary’s net settlement amount, instead of just the MSA amount. Since skipping the MSA can put the injured party’s benefits at risk, the claimant’s attorneys may request one.

Can I Spend My Medicare Set-Aside Funds?

The funds from a MSA account can only be used to pay for items and services outlined in the settlement. The expenses must be related to the injury and would otherwise be covered by Medicare. These spending rules apply even if the injured person isn’t currently a Medicare beneficiary.

If funds are used in any other capacity, Medicare can deny injury-related claims until the account administrator proves that the MSA funds have been exhausted under appropriate use cases. They must show that qualifying expenses equal the entire amount of the WCMSA or LMSA.

What Happens to Unused Medicare Set-Aside Funds?

At the end of the year, any leftover funds carry over to the next year. These funds continue to roll over each year until they’re used up. Upon the death of the injured person, funds are first reimbursed to CMS for any covered outstanding medical charges. Since providers have up to 12 months from the date a service is rendered, WCMSA or LMSA accounts may be left open for a year.

After that timeframe, the unused funds can be disbursed to the injured worker’s beneficiaries according to state law, assuming other Medicare claims are satisfied.

let Medivest handle Medicare Set-Asides for your clients

Let Medivest Handle Medicare Set-Asides for Your Clients

MSAs can get complex, and CMS recommends working with a professional administrator. Medivest has been helping clients for over 25 years, simplifying MSP compliance and MSA reports.

Our MSA Allocation Reports are created by highly trained nurses, reviewed by certified coders and managed by certified MSP case managers. Although every case is different, Medivest can usually create an analysis within 10 business days. Other services involved in MSA Allocation Reports include verifying Social Security and Medicare eligibility, requesting and verifying conditional payment and generating a non-quality report.

At Medivest, we strive to deliver the highest quality standards with comprehensive and attentive service. We’ll help you prepare for the future by protecting Medicare’s interests and providing greater visibility to the parties involved in the settlement. Reach out to us today to request your MSA report or ask an expert about our services.



We’ve all heard how important it is to establish a plan for how our affairs are to be handled after we die. It also comes as no surprise that this plan is best established before we die. Though I have not died yet, all evidence seems to indicate that I will have an exceedingly difficult time addressing these details once I’m dead. Despite this evidence, it is estimated that around half of all Americans have no estate planning whatsoever. So, it should not come as a surprise that those with a Medicare Set-Aside account likewise have no clear plan established for what happens to any funds that may remain once they die. Not having a clear plan can create confusion and aggravation for those responsible to sort out or benefit from the settling of an estate. Addressing these questions at the outset can avoid a lot of trouble. So, what are the main considerations?

Reversionary Interest

Sometimes a settlement will establish a reversionary interest for any remaining Medicare-Set Aside funds. For instance, it may have been agreed that a percentage or all unused funds at the time of the claimant/applicant’s death are to be returned to the funding party. If true, this is a detail that the executor of the estate will want to know. Reversionary Interest arrangements are becoming more popular as a tool in settlements, as more and more Medicare Set-Asides are professionally administered with better cost controls and preservation.

Medicare Set-Asides held within Trusts may be Subject to Specific Rules

If the Medicare Set-Aside was placed in a Special Needs Trust (SNT) to protect access to means tested benefits like Medicaid, or was placed in some other type of trust, there may be a special arrangement already in place that governs what happens to the Medicare Set-Aside funds once the trust beneficiary passes away. If unsure, consult the trust officer as to whether they require any specific guidance, or if the final destiny of the MSA funds have been already decided by agreement or statute.

Tell the Professional Administrator Your Intentions

One advantage of professional administration is that it is more likely that some funds will survive the claimant/applicant due to the strategies a professional administrator leverages. Another advantage is that a professional administrator will disburse all funds it administers directly to the beneficiary designated by the claimant/applicant. Most professional administrators will request that the claimant/applicant designate their beneficiary in writing at the time the account is established. Still, it is not rare for a professional administrator to never receive the claimant/applicant’s written intent. This sometimes causes issues when the final MSA balance is disbursed to the claimant/applicant’s estate.
Also, sometimes life situations will change the intended beneficiary of the Medicare Set-Aside funds. If this changes, it is vitally important to record that change in writing with the professional administrator, to ensure that the claimant/applicant’s wishes are followed. Remember, the professional administrator can only follow the most recent guidance provided by the claimant/applicant.

Medicare’s Interest Must Be Considered

Family members and/or the executor of a claimant/applicant’s estate are typically motivated to settle arrangements as quickly as possible. However, it is important to remember that the Medicare Set-Aside was established to pay for Medicare allowable and injury-related expenses post settlement. Medical providers have a filing window in which to bill for medical services rendered or medications and supplies dispensed or sold. Often, allowable medical claims are received within the first 12 months following a claimant’s death, and the Centers for Medicare & Medicaid Services (CMS) expects the Medicare Set-Aside to pay as primary to Medicare for those claims, even if those claims are received after the claimant/applicant’s death. A best practice is to reserve the MSA funds for a period of twelve months (or until it is confirmed that final billing has taken place) to pay for allowable expenses before disbursing the MSA funds to the designated beneficiary(ies).


Medicare Set-Aside funds are a special type of asset that must be treated differently. They’re intended to protect a claimant/applicant’s access to Medicare benefits, as well as protect the Medicare Trust Funds from unlawfully paying when other funds are primary. But, like other assets, it’s important to declare and/or confirm where these funds are to go once the claimant/applicant passes away to avoid confusion and/or dispute over where those funds eventually go.
You can count on Medivest to help guide you through the complexities of Medicare Set-Aside arrangements. If you have questions about preparing or administering a MSA or you need consultation on any of our settlement services, call us at 877.725.2467 or reach out to us online here.



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