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The Medivest Blog

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Craig Pawley, Vice President of Business Development
08/May/2025
lmsaMedicare Set-Aside

The Greatest Risk is Doing Nothing

CMS has repeatedly kicked the can down the road concerning Liability Medicare Set-Asides guidelines and how to protect Medicare’s future interest in an injury case. Even though Medicare has not issued any guidelines for Liability cases as they have for workers’ compensation cases, the same Medicare Secondary Payer (MSP) statute that applies to workers’ compensation cases also applies to liability cases. Plaintiff attorneys should understand the risks when Medicare’s interest is not considered.

Below is a list of the 5 plans deemed primary to Medicare by the statute:

    • Workers’ Compensation
    • Auto
    • Liability
    • No Fault
    • Self-Insured Plans

There is a common misconception that the need to protect Medicare’s future interest in a case is limited to workers’ compensation claims. It is important to understand the risks associated with not addressing Medicare’s interests in a liability settlement for a Medicare beneficiary. While there is no official guidance on how to address Medicare’s future interest in a liability case, the lack of guidance does not mean that the MSP statute no longer applies.

How Will Medicare Find Out About My Case?

In December 2009, Congress passed the Medicare and Medicaid SCHIP Extension Act that requires primary payors (insurance carriers, TPAs, etc.) to first determine if an individual whose case is settling is a Medicare beneficiary. The primary payer must then report the “required information,” once the case is resolved, to the Secretary of the Department of Health and Human Services in the “form, manner, and frequency” the Secretary prescribes. Failure to do so can result in civil monetary penalties of up to $1000 per day, per claim. This information includes over 200 data fields related to the case, including ICD-9 and ICD-10 codes, accident/injury descriptions, parties involved in the settlement, and personal identifying information for the plaintiff. Once this information is received by Medicare, they place a marker in their system that helps them track and deny case-related treatment and prescriptions. This forces the individual to use their settlement funds for future treatment related to the case. If those funds are spent per Medicare’s guidelines and they become exhausted, Medicare will step in as the primary payor going forward.

With the increased oversight for cases involving a Medicare beneficiary, steps must be taken to protect Medicare’s past and future interests in the case. While there is no statute in place that requires a Medicare-Set-Aside (MSA) arrangement in workers’ compensation or liability cases, it is one of the few methods that have been proven to address Medicare’s concerns.

Determining if a Medicare Set-Aside (MSA) arrangement is the right choice for your case depends on several factors

    • Is the individual currently receiving Medicare benefits or will be receiving Medicare benefits within the next 30 months?
    • Is the individual over 62.5 years old?
    • Is the individual currently receiving Social Security Disability Insurance (SSDI) or has an open application for SSDI benefits?
    • Is there a need for Medicare-covered, case-related treatment, and prescriptions based on the medical records?

If the individual meets the criteria listed above, a Medicare Set-Aside is the most conservative method available to comply with the MSP statute with respect to Medicare’s future interest in the case. The Medicare Secondary Payor Statute gives Medicare rights as a secondary payor, and they are prohibited from making a payment when there is a primary payor involved. Failure to address Medicare’s interest in the case typically results in Medicare denying payment for Medicare-covered, case-related treatment and prescriptions. If a MSA amount is not designated as part of the settlement, CMS has indicated they can assume the net settlement amount to the individual is the “future medical fund” and they will not step in to pay for case Medicare-covered, case-related treatment and prescriptions until all the funds are spent according to Medicare’s guidelines for MSA funds. Designating a MSA amount establishes a paper trail of what was done to protect Medicare in the settlement, and it will limit Medicare from considering the entire net settlement amount to the individual to be the MSA amount.

If the MSP statute is ignored during the settlement process, Medicare can deny payment for Medicare-covered, case-related treatment and prescriptions until documentation is provided showing how much out of the settlement was set aside and how those funds were spent. Designating a MSA amount allows you to set aside a piece of the pie. By not designating a MSA amount, the individual may be required to spend all of their net settlement funds on Medicare-covered, case-related treatment before Medicare agrees to step in and become the primary payor again. CMS would require proof that the funds were spent correctly before doing so. It is much better to set aside a piece of the pie than the whole pie.

As you work toward settlement, it is important to understand how addressing Medicare compliance issues creates a safety net for individuals, should their condition deteriorate over time. Medicare’s primary mechanism to enforce the MSP statute is a denial of payments. If settlement funds have not been spent by Medicare guidelines for MSA funds, Medicare will deny payments leaving the individual in a bad situation. Even though CMS has not issued guidelines for liability settlements, the MSP Statute of 1980 clearly states that liability is a primary plan, and you must protect Medicare’s interest in the case.

In the end, the greatest risk lies in doing nothing. By taking a conservative approach and preparing a Medicare Set-Aside, you help protect all parties and ensure compliance every step of the way.

About Medivest

Founded in 1996, Medivest is a national Medicare Secondary Payer (MSP) compliance company and provider of settlement solutions. Our focus is assisting anyone settling a workers’ compensation or personal injury claim to understand their obligation to consider Medicare’s interests under federal law. Medivest provides pre- and post-settlement solutions that help mitigate exposure from that obligation. Contact us today at 877-725-2467 or medivest.com/contact-us.

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Sandy Simpson
07/Apr/2025
cmsSelf-Administration

CMS Announces Updated Self-Administration Toolkit for WCMSAs

The Centers for Medicare & Medicaid Services (CMS) has released the Self-Administration Toolkit for WCMSAs version 1.7 on April 7, 2025. The Toolkit replaces Version 1.6, which was released on August 1, 2024. 

To download the new Self-Administration Toolkit for WCMSA Version 1.7 click here.

Self-Administration with Additional Help

For injured parties who are considering self-administration, but also want additional consultation on the process, Medivest provides a Self-Administration Kit. With the purchase of the Medivest Medicare Set-Aside Self-Administration Kit, the injured party will receive a one-hour consultation on the proper administration of a Medicare Set-Aside account, covering topics including: 

  • Where to deposit and hold Medicare Set-aside funds 
  • Which expenses are allowed to be paid from a Medicare Set-Aside account 
  • What rates must be used to negotiate and pay expenses 
  • How to annually report the Medicare Set-aside to the CMS 
  • What to do if the MSA funds exhaust temporarily or permanently 
  • How to discuss a Medicare set-aside with a medical provider 
  • What are the tax implications of interest earned on Medicare Set-Aside funds 

  

For Additional Information

Medivest will continue to monitor changes occurring at CMS and keep its readers updated when such changes are announced. For questions about self-administration, professional administration or anything else regarding rules and recommendations from CMS, feel free to contact the Medivest representative in your area by clicking here or calling us at 877.725.2467. 

 

 

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Medivest
01/Apr/2025
April 4thwcmsa

What You Need to Know About WCMSA Data Reporting on April 4

Starting April 4, 2025, significant changes are coming to Section 111 reporting requirements for workers’ compensation claims involving Medicare beneficiaries. If you’re a Responsible Reporting Entity (RRE), it’s time to prepare for a broader scope of data reporting, especially when it comes to Workers’ Compensation Medicare Set-Asides (WCMSAs).

Under the new requirements, all workers’ compensation claims involving a Total Payment Obligation to the Claimant (TPOC) must now include WCMSA-related data when the injured party is a Medicare beneficiary. This applies regardless of whether the WCMSA was reviewed or approved by Medicare. CMS has updated reporting requirements published in the NGHP User Guide of the MMSEA Sections 111, which you can view the following chapters below.

Here is a breakdown of what needs to be reported:

    1. Medicare-Approved WCMSAs:
      • If your settlement includes a WCMSA that was reviewed and approved by CMS, you must report the relevant WCMSA data.
    2. WCMSAs Below the Review Threshold:
      • Even if the WCMSA wasn’t submitted for CMS review because the total settlement amount falls below the Medicare workload review threshold, the WCMSA information still needs to be reported. 
    3. Zero-Dollar WCMSAs:
      • When a settlement explicitly states that no funds are allocated for future medical care, this is considered a Zero-Dollar WCMSA. These must also be reported.
    4. Unsubmitted WCMSAs:
      • If the parties developed an MSA or allocated funds for future medical treatment but chose not to submit it to Medicare, that information must now be disclosed.

 

What Should You Do Now?

If you’re a claims professional, insurer, or third-party administrator, be prepared to:

    • Review your Section 111 reporting processes and confirm they can handle the new data requirements that can be found.
    • Coordinate with your WCMSA vendors to ensure you receive the necessary data for inclusion in your reporting.
    • Educate your claims team and legal partners about the upcoming changes so all parties are aligned before April 4.

 

Takeaways

The expanded Section 111 reporting requirements reflect CMS’s ongoing efforts to protect the Medicare Trust Funds. While they may add complexity to the reporting process, these changes also provide an opportunity for claims handlers to strengthen compliance and improve documentation practices.

For Additional Information

As always, Medivest remains committed to assisting our clients with the creation and administration of WCMSAs. Medivest will continue to monitor changes occurring at CMS and will keep our readers up to date when any new changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us at 877.725.2467.

 

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Aaron Winnell
24/Jan/2025
Medicare Set-Asidemsa

Today’s MSA Will Exhaust Without Cost Containment

A Medicare Set-Aside (MSA) is a device intended to fund expenses in the future, but it’s a product of the here and now. MSAs are priced based on today’s costs. But inflation assures that tomorrow’s healthcare costs will outstrip today’s healthcare costs. So, it should be no surprise that MSAs are likely to run out of money earlier than projected. That usually means both Medicare and the beneficiary will be stepping in to pay when the money runs out.

Example 1: Lump Sum Funded MSA

Let’s consider a lump sum funded $87,500 MSA for an individual with a life expectancy of 10 years. That’s an average of $8,750 a year in funding to match expenses. The U.S. healthcare inflation rate in December 2024 was 3.1%. Assuming treatment matches the allocation and inflation remains constant, healthcare costs will be a little over 3% higher the next year, and each year following. The table below shows the impact that inflationary healthcare costs have on a Medicare Set-Aside arrangement that, by its standard projection methodology, assumes flat costs across a fixed period.

Lump Sum Funded MSA

YearFundingExpensesBalanceOther Payers
1$87,500(8,750)$78,750-
20(9,018)$69,732-
30(9,294)$60,439-
40(9,578)$50,860-
50(9,871)$40,989-
60(10,173)$30,816-
70(10,485)$20,332-
80(10,805)$9,526(1,279)
90(11,136)-(11,136)
100(11,477)-(11,477)
TOTAL:87,500(100,587)(23,892)

As we can see, expenses will exceed the available balance by the eighth year and the MSA fund will permanently exhaust. Another payer, preferably Medicare, will become responsible for their share of the beneficiary’s medical expenses and the beneficiary will begin paying Medicare co-pays.

Example 2: Structure-Funded MSA

Let’s take the same MSA from Example 1 and schedule the funding through a structured settlement annuity. The expected average annual expenses and the healthcare inflation rate will be the same.

Structure-Funded MSA

YearFundingExpensesBalanceOther Payers
1$17,500(8,750)$8,750-
2$7,778(9,018)$7,510-
3$7,778(9,294)$5,994-
4$7,778(9,578)$4,194-
5$7,778(9,871)$2,100-
6$7,778(10,173)-(295)
7$7,778(10,485)-(2,707)
8$7,778(10,805)-(3,028)
9$7,778(11,136)-(3,358)
10$7,778(11,477)-(3,699)
TOTAL:$87,500(100,587)-(13,087)

We observe two differences in Example 2: First, because the MSA fund is not fully funded up front, the toll of inflationary healthcare costs is felt earlier, but the impact is less severe. Instead of permanent exhaustion in year 8, we begin to see temporary exhaustion in year 6. In each year that follows, the structured annual payments are inadequate to cover the ever-higher healthcare costs. But over the life of the MSA, the total deficit is less than if the MSA was lump sum funded.

Perfect is Probably Not Good Enough

These examples demonstrate how aggressive a self-administering beneficiary will have to be to stretch their MSA funds over the course of their life. Even if their medical providers were to stick to the healthcare regimen contemplated by their MSA (uncommon) and the beneficiary only pays for Medicare allowable, injury-related expenses (thankfully, all beneficiaries are formulary experts) at the fee schedules used to price their MSA (beneficiaries know medical coding and billing, right?), healthcare inflation means they will eventually need Medicare coverage for their injury-related healthcare expenses, and that means Medicare co-pays up to 20%. Snarky parentheses aside, a beneficiary might have to dig into their own pockets for thousands of dollars in copays over their lifetime, even if the MSA administration is perfectly compliant.

Professional Administration Can Be a Hedge Against Healthcare Inflation

Many people think that professional administration is mostly a tool to ensure compliance and protect both Medicare’s interests and the beneficiary’s benefits. But a professional administrator can also obtain considerable savings on healthcare expenses over the life of the MSA. This secondary benefit enhances the first for both Medicare and the beneficiary because if the MSA stays solvent, neither the beneficiary nor Medicare will have to pony up for Medicare allowable, injury-related expenses.

As a professional administrator, Medivest applies a number of strategies to contain the rising costs of healthcare faced by beneficiaries. These include, but are not limited to, pharmacy benefit management relationships, supply and equipment vendor relationships, healthcare networks, negotiation, and system tools that look for excessive rates, inaccurate rates, and double billing. Probably one of the most underappreciated aspects of professional administration is the administrator’s ability to negotiate and obtain payment terms through good communication and establishing rapport with healthcare providers.

Professional administration is more affordable today than it has ever been. And in the face of rising healthcare costs, it may be reasonable to argue that most Medicare set-asides can’t afford to do without it. If you would like to begin the process of setting up a MSA for professional administration or have additional questions about how, in most cases, Medivest is able to stretch the lifespan of a MSA please call us at 877.725.2467 or reach out to us here.

 

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Sandy Simpson
15/Jan/2025
Medicare Set-AsidemsaTax Preparationwcmsa

1099-INT Forms for Medicare Set-Aside Accounts

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 that time arrives, the WCMSA Reference Guide should be considered a single point of reference for both Liability and Workers Compensation cases. To download the WCMSA Reference Guide Version 4.1, dated August 1, 2024, 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 their 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.

 

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Sandy Simpson
03/Oct/2024
CMPcms

CMS’s Latest Webpage Continues The Mission For More Settlement Details

On September 23, 2024, CMS released new announcements regarding Civil Money Penalties. This follows other recent updates and webinars from CMS that have placed additional emphasis on reporting settlement details, and an even greater preference for claimants to use professional MSA administration.

A New NGHP Webpage for Civil Money Penalties

A new webpage for NGHP Civil Money Penalties (CMP) for Section 111 Reporting is now available. Click here to view it. The new webpage is a tool for Responsible Reporting Entities (RREs) to comply with Section 111 of the Medicare, Medicaid, and SCIP Extension Act. The RREs are required to report to CMS regarding the Medicare beneficiaries including information about liability insurance (including self-insurance), no-fault insurance, and workers’ compensation claims where the injured party is a Medicare beneficiary.  The new page offers details on the CMP Final Rule, a CMP Workflow Chart, and more.

Expanding Reporting Requirements

The increased MSA mandatory reporting requirements fields enhance oversight and ensure proper coordination of benefits. Historically, CMS has had limited or incomplete information on MSAs which is why CMS has expanded the existing S111 mandatory reporting requirements. The expanded data fields will capture information on all WC claims involving Medicare beneficiaries who received a settlement.

Beginning April 4th, 2025, all workers’ compensation settlements involving Medicare beneficiaries that include a MSA of $750 or more, must be reported to CMS, even if the settlement was previously reported voluntarily or did not previously meet the CMS review threshold for MSA submission, which remains at $25,000. For further details regarding reporting requirements, please refer to the NGHP User Guide.

A Reminder of the Expanded Data Reporting Fields

    • MSA Amount
    • MSA Period (# of Years)
    • Funding Type (Lump Sum or Annuity)
    • If Structured
    • Initial Deposit Amount
    • Anniversary (Annual Deposit Amount)
    • Case Control Number
    • Professional Administrator EIN

 

What Does All of This Mean?

CMS wants to be made aware of settlement details. The new NGHP CMP webpage is the most recent example that CMS is focused on S111 reporting, non-compliance, review of records for auditing to identify non-compliance, penalty amounts of non-compliance, and the process of how non-compliance decisions will be handed down.

On September 12, 2024, CMS presented a webinar (click here to view presentation) on Section 111 NGHP Mandatory Reporting for Liability Insurance (including Self-Insurance), No-Fault Insurance and Workers’ Compensation. Additionally, a second webinar has been announced for another Medicare Secondary Payer & Civil Money Penalties webinar, scheduled for October 17, 2024, to provide a stage for any last-minute inquiries. CMS is taking every opportunity to promote its push for emphasis on receiving accurate and timely settlement information from RREs.

With the new expanded data requirements, very little will change in the way cases are handled by a professional administrator. On the other hand, claimants choosing to self-administer their MSA may find themselves exposed to greater risk of jeopardizing their Medicare benefits.

Reminder: Claimants who self-administer their MSA funds have hefty obligations so they do not jeopardize their Medicare benefits. These obligations include:

      • MSA funds held in an interest-bearing account
      • MSA funds may only be used for Medicare-covered and injury related expenses
      • Keep accurate record of expenses paid out of the MSA account
      • Coordination of health insurance benefits
      • Annual attestation reporting submitted to Medicare

     

Why Choose Medivest Asure for Professional Administration

With the additional responsibility and penalties looming overhead, doesn’t it make sense to work with an experienced Professional Administrator? Medivest was the first to professionally administer a MSA Account, and has been providing this service since 1998 – longer than any other company. Asure members have their MSA accounts managed by the Medivest team who will:

      • Ensure funds are spent down according to the allowable guidelines
      • Communicate with doctors, pharmacists, and DME suppliers for proper billing
      • Negotiate fees for medical services and future surgeries
      • Coordinate benefits with other health insurance plans including Medicare
      • Prepare required annual compliance documents for Medicare
      • Work with the medical providers and pharmacies of your choice
      • Protect Medicare entitlement by ensuring compliance with Medicare regulations

To download a Medivest Asure flyer, click here.

For Additional Information

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 at 855.931.3003.

 

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Natt Reifler, Esq., CMSP, VP of MSP Compliance
01/Jul/2024
lmsascotus

Could LMSA’s Become More Common After Chevron Deference Case is Overturned?

U.S. Supreme Court Fires a Shot at CMS by Overturning the Chevron Deference Case

In Loper Bright Enterprises v. Raimondo, No. 22-1219, 2024 WL 3208360 (U.S. June 28, 2024), the U.S. Supreme Court has reinstated the power of federal courts to interpret federal statutes over agency interpretations of same.  While courts have always deferred to agency determinations of fact (for example, demand amounts for repayment of MSP conditional payment liens, denial of payment of medical items, services or expenses by Medicare, or denial of waiver requests by Medicare for repayment of MSP debt for which the four step administrative appeals process before seeking redress in federal District Court has existed), this case signals more power being placed in the hands of the federal judiciary with respect to interpretations of law.  It specifically places the power to interpret laws that Congress has enacted into the hands of the federal courts.

The Medicare Secondary Payer Statute originally enacted in 1980 and found at 42 U.S.C. Section 1395y(b)(2) (MSP) is a federal law placing Medicare as a secondary payer to other insurance called primary plans including liability, self-insurance, No Fault, and Workers’ Compensation plans when a primary plan has demonstrated an obligation to pay via judgment, settlement, payment, or other arrangement.  The MSP on its face gives Medicare the right to recover any injury related payments (conditional payments) without regard to the timing of the payment.  The Centers for Medicare & Medicaid Services (CMS), the sub agency of the Department of Health and Human Services, is the regulatory agency in charge of administering the Medicare program.   Since the enactment of the MSP, CMS has promulgated regulations under the Code of Federal Regulations that have helped implement the MSP.

MSP Enforcement Has Been Focused on Recovery of Conditional Payments up to Date of Settlement

Despite the definition of conditional payments not being limited to dates of service prior to the Date of Settlement, enforcement for the recovery of conditional payments by CMS has been focused on recovery of conditional payments made by Medicare for dates of service from the Date of Injury up to the Date of Settlement.  CMS has also written guidance interpreting the MSP, early on in the form of memos and more recently, in the form of the Workers’ Compensation Medicare Set-Aside Arrangement Reference Guide (WCMSA Reference Guide) which incorporates any of CMS’ prior memos it wanted to still be referred to WCMSA Reference Guide v4.0 April 2024.

Often heard by those in the MSP Compliance industry and from CMS at various conferences is the concept that parties are to consider Medicare’s interests in any settlement.  The consideration of Medicare’s past interests in any settlement has always been relatively straightforward, with the need for attorneys representing injured parties and the need for primary plan payers to confirm whether Medicare made any injury related payments, and once auditing any payment summaries to confirm injury relation, to pay the proper amount and/or request compromises or waivers for same so that any Medicare lien is addressed at the time or prior to settlement.

What has been more uncertain is whether and how to address Medicare’s future interests in settlements for any primary plan settlement.  The area where Medicare Set-Aside allocation reports and the administration of same is most often encountered is in the Workers’ Compensation arena.  The WCMSA Reference Guide has become the predominant standard espoused by CMS to protect Medicare’s future interests in Workers’ Compensation settlements that meet CMS’ workload review threshold requirements (for current Medicare beneficiaries, settlements of over $25,000 or for those who have a reasonable expectation of becoming enrolled in Medicare within 30 months of settlements over $250,000, CMS allows a WCMSA allocation report to be reviewed for adequacy)

We have written about the attempts of CMS to promulgate regulations on how Medicare beneficiaries should protect Medicare’s future interest in liability settlements but how on two occasions (most recently in 2022), CMS has withdrawn its intent to address how to adequately protect these Medicare future medicals in liability cases via regulation.  Some have speculated that instead of the more formal regulation process, CMS would either update its WCMSA Reference Guide or write a new version specific to liability settlements.

In the absence of specific regulations or guidance, it has been up to the risk tolerance of settling parties in the liability realm to analyze and evaluate best practices to consider Medicare’s future interests, and decide whether to put aside some dollars as a version of a Medicare Set-Aside in liability settlements when the MSP law clearly puts Medicare as a secondary payer to the liability settlement funds used to compensate future medicals, but in light of the various factors that make liability settlements different from Workers’ Compensation and No Fault settlements.  We have discussed the differences between types of settlements before, but the main differences are that liability settlements are often constrained by policy limits, may have reductions in payment due to varying degrees of comparative negligence, may include payments for derivative claims of family members (loss of consortium for a spouse or loss of companionship of a minor child as examples), and include a variety of non-economic damages that do not compensate for medicals (Pain and Suffering and Loss of Enjoyment of Life as examples).

Take Aways

Interestingly, this Loper Bright Enterprises case could give rise to a federal court’s interpretation of protection of Medicare’s future interests in a settlement in a way different from CMS’s operational interpretation to only collect conditional payments up to the date of settlement in liability cases.  This means there could be a time in the future when more liability plaintiffs will choose to request liability Medicare Set-Aside allocation reports (LMSA’s) from entities that perform medical reviews and analyze the amount, if any should be set aside to protect Medicare’s future interests in light of the unique factors of their case.  This means plaintiffs’ attorneys will need to give their clients adequate information to allow for informed consent regarding this Medicare futures issue. While many WC carriers and claimants choose to establish Medicare Set-Asides for use in paying injury related medicals instead of shifting the burden of payment onto Medicare, a lower percentage of injured plaintiffs (or the carriers insuring liability defendants) choose to do the same.  Could this decision mean a decision is imminent on how settling parties shall consider Medicare’s future interests in liability settlements?  Probably not, but the framework is set for a federal court to take on the issue.

Will this mean that CMS guidance is of no use or that courts won’t read agency guidance?  No.  However, it does signal a pendulum swing away from a regulatory agency like CMS with more power placed back into the hands of the courts.  It is also a warning to Congress to get it right because if a statute is not clear on its face, there seems to be more power placed with the courts to interpret how to implement and how to interpret federal statutes like the MSP.

 

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Medivest
25/Mar/2024
cmswebinar

CMS to Host “Change to Section 111 Workers’ Compensation Reporting #2” Webinar

On Tuesday April 16, 2024, Centers for Medicare & Medicaid Services (CMS) will be hosting a second webinar regarding the expansion of Section 111 Non-Group Health Plan (NGHP) Total Payment Obligation to Claimant (TPOC) reporting to include Workers’ Compensation Medicare Set-Aside (WCMSA) information. After the first webinar in November, CMS received additional questions and feedback from the industry. The intent of this webinar is to ensure that RREs will be prepared for the change once implemented.

With that in mind, this webinar will include a background recap, summary of technical details, updated timelines and CMP impacts. The presentation will be followed by a question and answer session. Because this expansion impacts reporting of WCMSAs, it is strongly recommended that Responsible Reporting Entities (RREs) that report Workers’ Compensation settlements attend.

 

Date:  April 16, 2024
Time:  2:00 PM EST

Webinar Link: https://cms.zoomgov.com/s/1610015349?pwd=NHcza3NhcDlCdjM0cVhENWlNcFBjZz09
Passcode:  750766

Or to connect via phone:

Conference Dial In:  1-833-568-8864
Conference Passcode:  161 001 5349

 

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

 

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Sandy Simpson
20/Dec/2023
Self-Administration

Self Administration Tips for 2024

You have settled your injury case and have decided to self-administer your Medicare set-aside (MSA) arrangement. Whether you are just beginning to embark on this journey or if you have been self-administering your account for a while and need a refresher, here are a few tips you should know. These tips can help you navigate through this complicated process. They will ensure that you won’t jeopardize your Medicare benefits, help you preserve your MSA funds so they will be there when you need them the most, and will help you prepare to administer your MSA throughout 2024 and beyond.  

 

Helpful Self-Administration Tips:  

Set Up your MSA Correctly

  • Know how your Medicare Set-Aside account will be funded. There are two ways to fund MSA account either with a lump-sum payment or a structured annuity. If your settlement says that it will be funded as a lump sum, one check will be issued. Or, if your settlement says that it will be funded with a structured annuity, then an initial deposit is made to establish the account, followed by annual deposits.  
  • Open a separate bank account to deposit your MSA funds. Do not co-mingle your MSA funds with your personal funds.   
  • Deposit your MSA funds into an interest-bearing bank account, insured by FDIC.  
  • It is recommended to find a bank that does not charge fees when you have a low balance and preferably to find an account that you could write checks on.  

 

Learn the Process and Develop Good Habits Now

  • Keep your settlement paperwork in a safe place.  
  • Know your date of settlement. Any expense that is injury related, Medicare covered, and has occurred after the date of settlement can be paid out of your Self-Administered Medicare Set-Aside account.  
  • Only use the MSA funds from your account to pay for Medicare covered medical treatment and prescription costs related to your injury, even if you are not yet enrolled in Medicare.  
  • Keep accurate records of the expenses you’ve paid out of your account. You will not submit these records annually, but Medicare may request these records as proof that you are using the account correctly.    
    • Transaction date 
    • Check number (if any, or transaction number if present) 
    • “Payable to” or health care provider name  
    • Date of service 
    • Description (procedure, service, or item received; deposit; interest; other allowable expense) 
    • Amount paid 
    • Any deposit amount 
    • Account balance 
    • Keep itemized receipts 
    • Banks statements 
    • Tax records 
  • You will need to send an annual attestation form every year to Medicare, no later than 30 days after the anniversary date of your Workers Compensation settlement regarding funds remaining in the account after expenses have been paid.  

 

Know What Expenses Your MSA Covers

  • MSA account can be used to pay for the following: 
    • Cost of copying documents 
    • Mailing fees/postage 
    • Any banking fees related to the account 
    • Income tax on interest income from the account
  • You may not use the MSA account to pay for:  
    • 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 
    • Medicare premiums, co-payments and deductibles

 

What to Do When Your MSA is Exhausted or Depleted

  • If you are a Medicare beneficiary and your funds have been depleted, you can forward your bills to Medicare for payment as long as the expense is Medicare covered and injury related. 
  • If you are not Medicare covered and your funds have been depleted, you will need to coordinate benefits with your other health insurance providers or pay out of pocket. 
  • When your account is permanently exhausted or depleted, which means there is no money left in the account and there will be no future deposits, you will need to submit within 60 days of the date your account is depleted a final attestation letter stating the account is ‘completely exhausted’.    
  • Notify Medicare’s Benefits Coordination & Recovery Center (BCRC) if death has occurred before the WCMSA is permanently exhausted.   
  • If you lose your Medicare entitlement, you are not entitled to release the MSA funds. 

 

What Happens it Self-Administering is Too Difficult?

If learning how to self-administer your MSA on your own is too difficult to navigate, contact Medivest to learn more about our Self-Administration Kit with assistance. Or, if you’re interested in a more hands-off solution, Medivest Professional Administration Services can remove potential risks and the cumbersome tasks associated with administrating your Medicare Set-Aside funds, and in most cases can even stretch the lifespan of a MSA. Please call us at 877.725.2467 or reach out to us here. 

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