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07/Sep/2022

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).

Conclusion

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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15/Aug/2022

Consider this scenario: you are a personal injury attorney, and you get a call from a new client who is 63 years old and is interested in settling her automobile accident case.  Per the Medicare Secondary Payer statute and as part of the case workup, you need to make sure you are not shifting the burden to Medicare.

What is the Medicare Secondary Payer Statute?

The MSP statute was passed by Congress in 1980 in order to protect the financial integrity of the Medicare Trust Fund. Per this statute/law, Medicare is a secondary payer for workers’ compensation, no-fault insurance, liability insurance, self-insured plans, and employer group health plan insurance. According to the MSP regulations, these other sources of health care coverage are to be the primary payer, with Medicare being the secondary form of payment.

What is a Medicare Set-Aside (MSA) Proposal?

A MSA proposal is a detailed report indicating the anticipated Medicare allowable, Injury-related expenses for the remainder of the injured individual’s life expectancy.  It is a calculation that determines a dollar amount that should be “set aside”  as part of the settlement process to satisfy the Medicare Secondary Payer Statute (MSP) and to avoid shifting the burden to Medicare.

Guidance from Medicare for Liability Cases

The Centers for Medicare and Medicaid Services (CMS) published the WCMSA Reference Guide to help attorneys understand the process CMS uses for approving proposed Workers’ Compensation MSA (WCMSA) arrangements. The purpose of the WCMSA Reference Guide was to consolidate and supplant all the historical CMS memos into a single point of reference.
However, Workers’ Compensation and Liability settlements have several different nuances.  CMS has yet to release the long-awaited LMSA Reference Guide for liability settlements, despite announcing its intention to do so in 2018. Given the current lack of guidance concerning Liability MSAs from CMS, attorneys should look to the WCMSA Reference Guide for guidance when settling their liability cases.

Litmus Test –  Is a MSA Proposal Recommended?

In order to determine if a MSA allocation is recommended to cover Medicare’s interest in your settlement, there are several key items to review. Attorneys can do a quick MSA litmus test to determine whether or not a MSA is recommended.
  • Your client is currently Medicare-eligible
  • Your client is 62.5 years old and within 30 months of becoming eligible for Medicare benefits
  • Your client has either applied for Social Security Disability Insurance (SSDI) or has an open or pending application Will there be any money after medical liens have been resolved to fund a Medicare Set-Aside (MSA) account?

Medicare Eligibility

What is Medicare’s criteria for an individual to become Medicare eligible? Medicare is available for people aged 65 or older, younger people with disabilities, and people with End Stage Renal Disease (permanent kidney failure requiring dialysis or transplant).

Social Security Disability Insurance (SSDI)

An individual who has either applied or has reapplied for Social Security Disability Insurance can become Medicare eligible. Social Security Disability Insurance (SSDI) is a federal program that helps those who have become disabled from work.  An individual can apply for SSDI when:
  • A person is unable to engage in any “substantial gainful activity” due to an illness or disability and;
  • When a person is not able to return to work for 12 months or more and;
  • When a person has accumulated enough work credits in the last 10 years to qualify.

30 Months to Become Medicare Eligible

The reason why it takes 30 months to become Medicare eligible after the individual has either applied or reapplied for SSDI is that:
  • The individual needs to wait one month after the date of injury to apply for SSDI.
  • After the SSDI applicate date, there is a waiting period of 5 months to receive SSDI entitlement.
  • From the date of SSDI entitlement, Medicare has 24 months waiting period to become Medicare eligible.

Medicare Set-Aside (MSA) – Not Required by Law

Did you know that a Medicare Set-Aside is not required by law? You should know the risks if you choose not to have a MSA prepared, by understanding CMS’ interpretation regarding MSP compliance. In the event there was a failure to address Medicare’s interest in the settlement, Medicare may refuse to pay future medical expenses that are injury-related until the entire settlement is exhausted.

Best Practices

Our highly trained Medicare Expert Case Advisors 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.
To receive our complimentary MSA Decision Tree, “When Is a MSA Allocation Recommended?”  click here.

 


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19/Apr/2022

Economic inflation is a major topic of discussion these days. Just about everything, from gas to food, carries a higher price tag than it did a year ago. Some say this is a temporary side effect of economic recovery. Others argue that much of this may be here to stay. Regardless, most are mindful of the impact inflation is having on the average American’s buying power.
No one should be surprised to hear that the cost of medical care has an inflationary rate as well. Well before the present economic factors and policy decisions precipitated general inflation, medical costs have increased year over year by a rate that outstrips the general economic rate of inflation. According to the U.S. Bureau of Labor Statistics, medical care costs have increased 100.86% since 2000. That’s a doubling of medical costs in two decades! Bottom line: medical care will be more expensive in the future.
This brings us to a serious problem most medical settlements face. Often, the final portion of the settlement award designated for medical care is determined by looking at present day costs and the life expectancy of the beneficiary. Basically, it’s an annual expense multiplied by years of expected need. This, for instance, is generally how Medicare set-aside allocations are calculated, but the calculation is frequently applied to the entire medical portion of the settlement. Rarely is the inflationary rate of those medical costs considered.
This is why I’m calling inflation the medical settlement’s “silent killer”. In the year or two following settlement, it may seem like the funding is adequate. But as time marches on, each dollar reserved for medical expenses buys a little less care, fewer drugs, and fewer supplies. Soon, a beneficiary must find other money, cheaper alternatives, or simply treat less frequently. Factor in that many settlements aren’t funded at full value and that the beneficiary is buying services in an insurance-driven ecosystem as a cash payer, and you quickly see the long-term problem.
Factoring inflation into the settlement would be one way to mitigate much of the problem. But, if we’re going to be realistic, we must acknowledge that there are many factors that create a significant headwind to the “more money” solution. There are also other considerations: What rates are reasonable? How does the beneficiary avoid being gouged? What about coordinating with another policy that may be able to pay instead? Then there’s the need to keep settlement funds intended to consider Medicare’s interest separate and properly accounted for to protect the beneficiary’s Medicare benefit. If healthcare cost inflation is a silent killer, these other considerations are death by a thousand cuts.
Anyone who’s lived by a budget understands that when more money is not an option, keeping spending under control is essential to not running out at the end of the month. One must stretch their settlement proceeds if they are going to last, or at least last longer. This is where a professional administrator can make all the difference. Professional administrators are typically thought of as the go-to option for making sure a Medicare set-aside (MSA) arrangement is used properly. As a matter of fact, CMS highly recommends professional administration of MSAs (MSA Reference Guide v3.6, 17.1). The professional administrator uses the MSA according to CMS’ expectations and meets the beneficiary’s obligation to attest annually to the MSA’s proper use, thereby protecting the beneficiary’s Medicare benefit (as CMS can suspend benefits if it determines that improper use of the MSA represents a burden shift to Medicare). The professional administrator can also stretch MSA dollars to help them last.
So, we know that professional administrators are a great option for handling the compliance obligations placed on MSA money. But what about the “silent killer” problem? What can professional administrators do to address the concern of healthcare cost inflation? It comes down to our budget reference above and all the ways a professional administrator is well-positioned to reduce the spend and keep the funds solvent.  Yes, professional administrators protect MSAs, but they also step between the beneficiary and the healthcare system in any settlement where future medicals are contemplated.
Consider the similarities between the experience of a beneficiary responsible for MSA funds and a beneficiary responsible for general future medical funds: The beneficiary is going to be a cash payer and likely pay top dollar. They are likely to receive bill after bill from their medical providers, expecting them to cut the check in a timely fashion to prevent interruption of care. They might have other insurance plans that could pay if benefits were properly coordinated. They’re probably not experienced at handling a lump sum of cash all at once and may struggle to use the medical settlement proceeds as intended. Fortunately, a professional administrator can provide better outcomes in all these situations.
A professional administrator steps between the beneficiary and the healthcare world where payment is concerned. Rates are negotiated. Incorrect bill coding, duplicate charges, and other types of billing mistakes are identified and addressed. All payment concerns, bills, coordination with other payers, etc. is taken care of on behalf of the beneficiary. And the money is used for what it is intended: medical care. The result is the preservation of settlement funds as a hedge against the fatal climb of healthcare cost inflation. In many cases, the medical proceeds will remain solvent for the life of the beneficiary, depending on the nature of their injury expenses and the cost controls available.
It’s fairly simple and affordable to set up professional administration of future medical settlement proceeds, and Medivest can help you integrate professional administration into your cases. From the simple straightforward claims to the most complex, Medivest has developed resolutions that address an array of post-settlement concerns, especially healthcare cost inflation. Contact us today for a free case consultation.


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17/Aug/2021

Medicare Set-Aside (MSA) arrangement beneficiaries have some very specific limitations when it comes to how their money is spent. When it comes to choosing a provider, the options are wide open. A beneficiary will often deal with who they know or a provider that is close to their home. As a cash payer with limited funds to cover all future Medicare allowable and injury related expenses, the wrong choice can put a beneficiary in a world of hurt. Here are some best practices when choosing a provider to treat an injury post settlement and using Medicare Set-Aside funds:

 

Choose a Medicare Certified Provider

While MSA funds can be used to pay any provider that supplies covered care related to the injury, not every provider is able to bill Medicare for these medical goods or services. If a beneficiary properly exhausts their MSA funds in a given year (when the MSA is funded with a structured annuity and receives deposits periodically) or the MSA funds have permanently exhausted, Medicare will assume responsibility to pay Medicare covered expenses related to the injury and coordinate with any other applicable insurance plan. If the provider is not Medicare certified, that provider will not be paid by Medicare even if the beneficiary has maintained Medicare coverage. This can leave the beneficiary as the responsible party if no other insurance benefit is available. We recommend choosing Medicare certified providers to avoid such situations.

 

Choose Providers Who Offer Discounted Cash Rates

A beneficiary with MSA funds is considered a cash payer by medical providers. There is no “in network” policy with set payment rates for cash payers. If the provider is not accustomed to dealing with patients without a primary medical insurance plan, the provider may charge its full retail rate. A beneficiary may have a difficult time negotiating a medical bill on their own or in advance of services being completed and this can add up to a significant expenditure of MSA funds. It is best to ask about cash rates and if any discounts are available when contacting a new provider.

 

Avoid Providers That Don’t Normally Bill Insurance

Billing insurance for medical services means increased access to patients because it agrees to a negotiated contract that reduces the average cost of services. Some providers opt to avoid insurance altogether. This allows these providers to charge higher rates for services because there is no set rate or maximum charge. Moreover, these providers will only take the beneficiary’s cash even if they have a group health plan or public benefit. This lack of flexibility is often costly for the beneficiary.

 

Choose Providers Experienced with Traumatic Injuries

This may seem obvious, but as a professional administrator, Medivest sees beneficiaries choosing providers that are not familiar with treating traumatic injuries post-settlement. This can be problematic from a communication standpoint (while the beneficiary and the administrator know the injury backwards and forwards, the doctor may see very few of these cases) and it can make billing and payment more difficult or present difficulties when seeking a referral to a specialists. The most efficient approach is to choose a provider that KNOWS the beneficiary’s type of injury from direct experience.

 

Choose a Flexible Provider

Here are a few common red flag phrases from providers that limit the beneficiary’s options:

We only bill Medicare.”

We don’t deal with liability injuries.”

“We never treat workers’ compensation injuries.”

“We only treat workers’ compensation injuries.”

“We don’t bill third parties.”

“We don’t take cash.”

Providers experienced with multiple scenarios provide the beneficiary with options when it comes to treatment and payment.

 

Beware of Signing Rate Agreements for Specific Services

A beneficiary that is not acquainted with the typical market rate or medical fee schedules is advised to run away from any agreement or contract that would lock them into a guaranteed payment rate. A rate agreement of this nature can put the beneficiary on the hook for significantly inflated cost. If they’re using a professional administrator (and they should be), it can negotiate with the provider directly on the beneficiary’s behalf. Don’t confuse this document with an authorization form to bill insurance or a notification that the beneficiary is responsible for any non-covered services. They’re not the same thing.

 

Avoid buying OTC Supplements or Supplies Directly from a Provider

Over-the-counter supplements or supplies that are sold directly by a provider typically come with a markup and can usually be found cheaper elsewhere. Your providers may recommend a device or a supplement that they conveniently stocks for sale. You should be aware that the providers may be looking to increase their margin per patient. Take your doctor’s advice and do your research.  If the recommended supply of supplement makes sense, shop around for a better price.

 

Do Not Be Discouraged if a Provider Rejects Payment from the MSA

Most providers within the US Healthcare system do not understand what a Medicare Set-Aside is or what it is for. They are frequently hesitant to accept it as a form of payment. They may mistake it for a Medicare Part C plan or out of network benefit. Sometimes, they are highly suspicious and cannot believe that Medicare is not the primary payer. It can be daunting for a beneficiary to be in the position of educating a provider’s billing office. A professional administrator is a great resource for coordinating benefits and having the MSA be the primary payment source, when applicable.

 

Conclusion

A MSA beneficiary with a persistent injury deserves the best care possible, but also needs to be positioned to ensure the MSA funds last. And if they don’t last, that the beneficiary has a proper safety net in place. Part of this strategy includes finding the right providers to not only address the injury with competence but also provide affordable and flexible options to ensure continuity of care and protect the beneficiary from having to dip into other settlement or personal funds.  Even when Medicare is responsible for covering injury care, the beneficiary can be billed for any deductible, copay, or coinsurance balances.

Last, we’d be remiss if we didn’t point out that a professional administrator addresses these challenges every day and not only talks to a beneficiary’s provider on their behalf, but will also coordinate benefits with other insurance, communicate with CMS about the MSA, and negotiate rates in ways a patient will struggle to match. If you or your client is a current or future beneficiary of a Medicare Set-Aside, don’t hesitate to contact Medivest. We help thousands of beneficiaries avoid these and many other MSA pitfalls.

 


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22/Oct/2019

The Centers for Medicare & Medicaid Services released Version 1.3 of the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs) on October 10, 2019. The latest Self-Administration Toolkit Version 1.3 is now available to download here. Furthermore, the newest version 5.9 of the WCMSAP User Guide was updated on October 7, 2019. That can be accessed here. It contains updates similar to those found in the updates to the Self-Administration Toolkit discussed in this article.

The three most notable changes included in Version 1.3 are as follows:

1.  A new method for submitting annual attestations electronically via the WCMSA portal (WCMSAP).

Section 8: Annual Attestation – of the Self-Administration Toolkit conformed its language to that of the WCMSA Reference Guide, Section 19.2 titled Death of The Claimant, and can be viewed here. Now, self-administering claimants can access and submit attestations via the same WCMSAP web portal that professional administrators use.

If you are a beneficiary administering your own account, you can submit your year attestation online by accessing the WCMSA Portal through the MyMedicare.gov website.

If you are a representative or other identified administrator for the account, you can log in directly to the WCMSA Portal to submit the yearly attestation. To access, go to https://www.cob.cms.hhs.gov/WCMSA/login

The WCMSAP User Guide, available under the Reference Materials header once you log in to the site, has details regarding the submission of attestations online.

CMS will be hosting two (2) webinars regarding the recent WCMSAP enhancements which will allow Medicare beneficiaries or their representatives to submit annual attestations electronically for approved WCMSAs.

  1. Workers’ Compensation Medicare Set-Aside (WCMSA) Electronic Attestation Enhancement Webinar. Click here for more information regarding this seminar taking place on Wednesday, October 30, 2017 at 1:00pm EST.
  2. Workers’ Compensation Medicare Set-Aside (WCMSA) Electronic Attestation Enhancement for Professional Administrators. Click here for more information regarding this seminar
    taking place on Wednesday, November 6, 2019 at 1:00pm EST.

 

2.  A more detailed description of why WCMSA accounts are kept open for a period of time after the death of the Medicare beneficiary when WCMSA funds have not permanently exhausted.

Section 10: Inheritance – Added language regarding notifying the BCRC when death of the Medicare beneficiary occurs before the WCMSA is permanently exhausted. A summary follows: In such cases, the respective Medicare Regional Office (RO) and the BCRC will coordinate to help ensure all timely filed bills related to the WC claim have been paid. This may involve keeping the WCMSA account open for some time after the date of death, as health care providers can submit their bills to Medicare up to 12 months after the date of service. Any remaining WCMSA funds may be paid in accordance with the respective state law and administration agreement if applicable, once Medicare’s interests have been protected. Often the settlement itself will state how to spend funds after the death of the claimant and payment of care-related expenses.

 

3.  Updated mailing addresses for the Benefits Coordination and Recovery Center (BCRC)

Section 12: Where to Get Help – The mailing address to where WCMSA Proposals, Final Settlements, and Re-Review Requests are to be sent was updated to be consistent with the current WCMSA Reference Guide. That address is:

WCMSA Proposal/Final Settlement
P.O. Box 13889
Oklahoma City, OK 73113-8899

On Page 18 of the Self-Administration Toolkit

The mailing address for situations when the WCMSAP or MyMedicare.gov portals are not being used, self-administering claimants may submit attestations yearly account attestations and expenditure letters to the following address:

NGHP
P.O. Box 138832
Oklahoma City, OK 73113

 

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.

 


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