Demystifying Medicare Set-Asides in Workers Comp

Medicare Set-Asides (MSAs) represent a critical factor in the workers compensation settlement landscape, yet they remain widely misunderstood by many professionals in the industry. In this Expert Insights episode, "Demystifying Medicare Set-Asides in Workers Comp," MEC’s Medical Management Consultant, Tina D’Andrea, unpacks how a properly executed MSA ensures compliance with Medicare requirements and provides clarity and protection for all parties involved in the settlement process.

Tina shares insights about fundamental components of MSAs—from threshold requirements to submission procedures to review and appeal options— to help claims professionals better understand and navigate the complex process more effectively. This includes:

• Centers for Medicare and Medicaid Services thresholds that determine when an MSA should be submitted for their review.
• Why the MSA submission process requires meticulous documentation and attention to detail.
• Remediation pathways that can save thousands of dollars and countless headaches. 
• Re-review options for mathematical errors, missing documentation, or significant pricing changes
• The vital importance of working with experienced MSA vendors for best results.

Listen now to get the guidance you need to successfully address the challenges of Medicare Set-Asides and approach your next workers compensation settlement with clear focus and confidence. 

Chapters

• 0:00 Introduction to Expert Insights Series
• 0:35 Understanding Medicare Set-Asides
• 1:41 Criteria for CMS Review
• 3:02 MSA Submission Process
• 4:35 Re-review and Amendment Options
• 7:55 Closing Remarks

Transcript

Sara Hance: 0:04

Hello, this is MEC Connect Expert Insights, a companion series to our main MEC Connect podcast from Midwest Employers Casualty. I'm Sara Hance and in these Expert Insights episodes you'll hear from subject matter experts as they share practical tips and strategies on a variety of topics related to workers' comp and claims management. Today, Tina D'Andrea, senior Medical Management Consultant, will discuss Medicare set-asides. Now let's hear from Tina.

Tina D'Andrea: 0:35

In my role here at Midwest Employers Casualty, I've reviewed a lot of Medicare set-asides over the last seven years. A Medicare set-aside or MSA as it is commonly referred to, is a voluntary financial agreement that allocates a portion of a claimant's workers' compensation settlement to pay for future medical expenses related to their claim. These funds must be exhausted before Medicare will pay for any treatment related to the workers' compensation injury, illness or disease. While there is no regulatory provision requiring that an MSA be submitted to CMS or the Centers for Medicare and Medicaid Services, it is recommended that the process be completed. If you choose to move forward with the process, cms or Medicare requires that you comply with certain policies and procedures which they have in place. For CMS to currently review an MSA, it must meet one of the following criteria the claimant is already a Medicare beneficiary and the total settlement amount is greater than $25,000. Second, the claimant has a reasonable expectation of becoming a Medicare beneficiary within 30 months of settlement and the anticipated total settlement amount for future medical expenses and disability and or wage loss over the life or duration of the settlement agreement is expected to be greater than $250,000. Cms is reviewing the process currently and is considering reviewing all claims on Medicare beneficiaries, regardless of the settlement amount, but this has not and may not be implemented. Once you have determined that the claimant meets one of the criteria I've previously mentioned, the next step is to see if there is any mitigation opportunity. You want to look at things like medications, diagnostics and recommended treatment.

Tina D'Andrea: 2:38

After you have reviewed all the information, it is time to obtain a formal MSA. There are various vendors out there that can help you complete the MSA process. If possible, you want to choose a vendor that you are familiar with and have used in the past with good results. Once you have determined a vendor to complete the MSA, the following information will need to be provided to them. First, the last two years of medical records in which the claimant has actively retreated for the work-related injury. It is important to note CMS does not consider IMEs or UR determinations when they review an MSA. You need to provide the last two years of a payment history. You also need to provide them with the last two years of the itemized prescription history. Provide them with the last two years of the itemized prescription history, the first report of injury and any pertinent court documentation, such as compensability determinations and treatment determinations. This is all the information that will be needed to complete an MSA properly and to take Medicare's interest into account. If you do not have this information, the vendor will not be able to complete an accurate MSA. Vendors on average take about two weeks to complete the process. The MSA vendor will usually list any possible mitigation opportunities or risks that you may have not been aware of.

Tina D'Andrea: 4:02

Once you have reviewed this information and mitigated everything, it is time to submit your MSA electronically through the WorkComp MSA portal. The MSA vendor will receive an immediate confirmation of successful submission from the portal. The MSAs are handled in the order in which they are received. Once submitted, it will be recorded in a national centralized database and electronically forwarded to a review contractor. This contractor performs an independent review of the MSA, analyzing the proposed medical and medication costs to determine if the amount is enough to protect Medicare's interest interest. If, during the review, the contractor feels there is information missing or that the information received is incomplete, they will send out what is called a development letter. The review process will then be placed on hold until the requested information is supplied. Once the review contractor completes its review and renders their recommendation, it is sent to the regional office assigned to the file. When the regional office receives and reviews the recommendation, they make the final determination as to the final MSA amount and will notify the vendor of their decision.

Tina D'Andrea: 5:22

Cms can either agree with the MSA as submitted or they can make changes to reflect what they determine is needed to protect Medicare's interest. This process can take, on average, four to six weeks. If the CMS allocation reflects a different number than what was submitted and you feel that this is an error, you're entitled to request a re-review. The following are the situations that warrant a re-review Mathematical error the CMS determination contains obvious mathematical mistakes. Missing documentation the submitter has additional documentation not previously considered by CMS which is dated prior to the submission date of the original MSA. It is important that you keep this in mind. The date must be prior to the submission date of the original MSA. Three submission error An error exists in the documentation provided for submission that leads to a pricing change of $2,500 or more. You can only have a file re-review once. Please consider carefully when you file your re-review.

Tina D'Andrea: 6:36

There is also a process which would allow for an amended review. To request an amended review, the following criteria must be met CMS has issued an amount at least 12 months prior. You cannot file an amended review for a minimum of 12 months. The case is not yet settled as of the date of the request and, finally, the projected care has changed so much that the submitter's new proposed amount would result in a 10% or $10,000 change, whichever is greater, in the approved amount. The submitter will need to include all medical records since the previous submission date, the most recent six months of pharmacy records, a consent to release form and a summary of the expected future care. Once this information is received, cms will enter a new determination. The Medicare set-aside process can be confusing. I hope you feel this information has made that process easier to understand. Thank you for your time.

Sara Hance: 7:55

Thank you for tuning in to MEC Connect Expert Insights. Here at MEC, we focus on what matters most worker recovery and better claims outcomes. Our skilled people, proven processes and innovative technology achieve measurable results and creates lasting value. We hope you found Tina's insights on Medicare set-asides valuable. Stay tuned for more from MEC Connect and more expert insights. Thanks for listening.