So what exactly is an MSA and how does it affect my workers’ compensation claim?

September 29, 2009

In handling workers’ compensation claims in Georgia we frequently reach the point at which the parties finally decide to settle the claim. Aside from numerous other issues to consider as part of the settlement, we also have to consider the interests of Medicare and determine whether to include a Medicare Set Aside (MSA) as part of our settlement and whether we are required to submit our MSA to the Centers for Medicare and Medicaid Services (CMS) for approval.

The usage of MSA’s in workers’ compensation settlements arose as a result of stricter federal government enforcement of the Medicare Secondary Payer Act (MSP). One of the primary purposes of the MSP is to avoid shifting responsibility for future medical expenses for work-related conditions over to Medicare (so that Medicare will remain a secondary payer if a primary payer exists).

An MSA is essentially an estimate or a projection of lifetime future medical costs covered by Medicare. If an MSA is utilized in a workers’ compensation settlement, a portion of the settlement (the MSA) is set aside to cover medical care needed for the work injury which would otherwise have been covered by the claimant’s Medicare entitlement.

CMS says we should always consider Medicare’s interest when settling any workers’ compensation claim in which we are closing out responsibility for future medical treatment. However, CMS has review thresholds for settlements with MSAs and has indicated it will not review or approve any MSAs which do not meet these criteria:

(1) If the claimant is already a Medicare beneficiary, an MSA should be included in the settlement. The MSA should be submitted to CMS for approval if the settlement is for more than $25,000.

(2) If the claimant has a reasonable expectation of becoming Medicare eligible within 30 months of the date of settlement AND the total settlement amount exceeds $250,000, an MSA should be included and it should be submitted to CMS for approval.

Typically, an individual has a “reasonable expectation” of becoming Medicare eligible within 30 months of the settlement when the individual:

(1) Has applied for Social Security Disability (SSDI) benefits
(2) Has been denied SSDI but anticipates appealing that decision
(3) Is in the process of appealing and/or re-filing an application for SSDI
(4) Is at least 62 ½ years old
(5) Has end stage renal disease (ESRD) but does not yet qualify for Medicare enrollment based upon ESRD.

CMS has announced plans to make available a secure Internet web-based portal or interface so that MSA’s can be submitted for approval online, which will hopefully simplify the process and make it quicker. Stay tuned for more details.

Please visit us at www.davidandrosetti.com

Chuck DuBose, Esq.
404-446-4490