Comparing Options for Managing Medicare Set-Aside Funds Post-Settlement

When a workers’ compensation claim settles and includes a Medicare Set-Aside (MSA), that’s not the end of the story, it’s the beginning of a new responsibility for the injured worker. That responsibility? Administering the MSA in compliance with the Centers for Medicare & Medicaid Services (CMS) guidelines.

There are two options for handling this responsibility: self-administration or professional administration. Each comes with its own benefits and risks. So, which is right for the injured worker? Let’s break it down.

What Is MSA Administration?

MSA administration refers to how the injured worker manages and spends the money allocated for future medical care related to their injury. These funds must only be used for Medicare-covered expenses that are injury-related, and spending must be carefully tracked in case CMS ever audits the account.

Failing to comply with these rules can lead to serious consequences as Medicare may refuse to pay for injury-related care once the MSA funds are exhausted, leaving the injured worker on the hook.

Option 1: Self-Administration

With self-administration, the injured worker is responsible for managing their own MSA funds. This includes:

• Setting up a separate interest-bearing account
• Paying for medical treatments and prescriptions out of the MSA account
• Ensuring payments are only for Medicare-eligible, injury-related services
• Tracking all expenditures and retaining documentation
• Reporting annual spending to CMS

Pros:

• Full control over how and when funds are used
• No administrative fees
• May be appealing for workers who are detail-oriented or have experience managing finances

Cons:

• Requires a thorough understanding of CMS guidelines
• High risk of non-compliance, even with good intentions
• No built-in advocacy or support in the event of disputes with providers or Medicare
• Can become overwhelming, especially for those dealing with complex or ongoing care

Option 2: Professional Administration

Professional administration means a third-party administrator manages the MSA on the injured worker’s behalf. This service typically includes:

• Establishing and maintaining the MSA account
• Processing and paying medical bills and prescriptions
• Ensuring all expenditures are CMS-compliant
• Annual reporting to CMS
• Providing injured workers with support and transparency

Pros:

• Ensures CMS compliance and minimizes risk of Medicare denial
• Reduces stress and complexity for the injured worker
• Access to medical cost containment strategies, such as network discounts
• Professional tracking, reporting, and auditing protections
• Peace of mind for both the injured worker and the settling parties

Cons:

• Typically involves a one-time setup fee and annual service fees (although this is usually paid by the employer or insurer at the time of settlement)
• Less direct control over funds

Making the Right Choice

The right choice depends on the injured worker’s capabilities, preferences, and the complexity of their care. Here are a few considerations:

• Complexity of Care: If the injured worker has ongoing treatments, expensive prescriptions, or multiple providers, professional administration can prevent missteps.
• Comfort with Financial Management: Self-administration may be feasible for someone confident in managing money and navigating healthcare systems.
• Compliance Risk Tolerance: Professional administration significantly lowers the risk of non-compliance and CMS scrutiny.
• Support Needs: Injured workers often appreciate having an advocate who can assist with billing issues and provider coordination.

A Partner in Post-Settlement Success

At Tower MSA Partners, we work closely with injured workers, carriers, and attorneys to evaluate the best administration path for each case. When professional administration is chosen, we partner with Ametros to provide this service.

Ensuring compliance and protecting the long-term well-being of the injured worker doesn’t stop when the claim settles. Choosing the right MSA administration option is one of the most important settlement decisions, one that can make all the difference in the quality of care and peace of mind.

Stay tuned for our next article in the series on $0 MSAs.