MSA 101: What is an MSA?

March 5, 2025

What Is an MSA?

This is the first in a series of articles on the basics of Medicare Set-Asides (MSA) that Tower will be releasing in the coming weeks. For those familiar with MSAs, think of this as a refresher on what an MSA is, how it operates, what it contains, and when you should use one. If you are new to MSAs or have limited experience with them, consider this as your MSA 101 course.  Enjoy!

In the world of workers’ compensation, ensuring that Medicare’s interests are protected is a critical component of settlement negotiations. This is where an MSA comes into play. If you’ve ever wondered what an MSA is, why it’s necessary, and how it impacts claim settlements, this article will provide you with a foundational understanding.

What is a Medicare Set-Aside (MSA)?

A Medicare Set-Aside (MSA) is an arrangement that allocates a portion of a workers’ compensation settlement to cover future medical expenses related to the work-related injury, ensuring that Medicare does not pay for treatment that should be covered by the settlement. This amount is “set aside” in a designated account and is used exclusively for Medicare-covered medical expenses associated with the injury.

Think of an MSA as a financial reserve specifically designated for medical costs, helping claimants maintain Medicare eligibility while ensuring compliance with the Medicare Secondary Payer (MSP) Act.

Why are MSAs Necessary?

  1. Compliance with the Medicare Secondary Payer (MSP) Act

The MSP Act prevents Medicare from paying for medical expenses when another entity (such as a workers’ compensation insurer) is responsible. If an injured worker is eligible for Medicare (or expected to be soon), an MSA helps ensure that Medicare is not burdened with costs that should be covered by the settlement.

  1. Protecting the Injured Worker’s Medicare Benefits

If a settlement does not properly account for future medical costs, Medicare could deny payments for treatment related to the injury. This could leave the injured worker responsible for medical expenses that should have been accounted for in the settlement.

  1. Avoiding Legal and Financial Risks

Failure to properly allocate funds for future medical expenses can lead to compliance issues with the Centers for Medicare & Medicaid Services (CMS). In some cases, CMS may pursue recovery from both the claimant and the insurer, leading to unnecessary legal and financial complications.

How Does an MSA Work?

  1. Case Evaluation
    • A review is conducted to determine if an MSA is necessary, typically for claimants who are Medicare-eligible or expected to become eligible within 30 months.
    • Medical history and projected future treatment costs are assessed.
  2. MSA Allocation Report
    • A professional allocation report is developed to estimate the future medical costs that Medicare would typically cover over someone’s lifetime.
  3. CMS Submission (Optional but Recommended)
    • If certain review thresholds are met, the MSA proposal can be submitted to CMS for approval to ensure compliance. While not always required, CMS approval provides protection against future disputes.
  4. Funding and Administration
    • The MSA can be funded as a lump sum or through structured payments.
    • The funds must be used exclusively for medical expenses related to the work injury.
    • The MSA account can be self-administered by the claimant or managed by a professional administrator to ensure proper usage and record-keeping.
  5. Exhaustion and Medicare Coverage
    • Once the MSA funds are properly spent and exhausted, Medicare assumes responsibility for injury-related medical expenses.

Who Needs an MSA?

Not every workers’ compensation claim requires an MSA. However, they are generally recommended when:

  • The claimant is Medicare-eligible (65+ or receiving SSDI) or expected to be Medicare eligible in the next 30 months.
  • The settlement includes funds for future medical treatment related to the work injury.
  • The claim involves significant ongoing medical expenses that would typically be covered by Medicare.

If these conditions apply, it is crucial to evaluate whether an MSA is needed to avoid compliance risks and ensure the claimant’s continued access to care.

Final Thoughts

A Medicare Set-Aside is an essential tool for protecting Medicare’s interests, ensuring compliance with federal regulations, and securing long-term medical coverage for injured workers. By understanding what an MSA is and why it matters, all parties involved in a workers’ compensation claim—insurers, employers, attorneys, and injured workers—can make informed decisions that align with best practices and regulatory requirements.

If you’re navigating a workers’ compensation settlement and unsure whether an MSA is necessary, Tower MSA Partners is here to help. Our team specializes in developing compliant and cost-effective MSAs, ensuring that your settlement is both strategic and Medicare-compliant.

Stay tuned for our next blog in this series: “How Does an MSA Work?” where we’ll dive deeper into the MSA components.

Want to discuss your MSA needs? Contact Tower MSA Partners today.

CMS 2024 WCMSA Metrics: Key Trends in Medication and Treatment Costs

December 4, 2024

stethoscope and pill bottle on representing WCMSA trends

CMS 2024 WCMSA Metrics: Key Insights into Costs and Trends

The Centers for Medicare and Medicaid Services (CMS) has released its 2024 data on Workers’ Compensation Medicare Set-Aside (WCMSA) reviews. This year’s metrics highlight two significant trends: declining prescription drug costs and rising medical treatment costs.

For employers, insurers, and other stakeholders, understanding these trends is crucial for effective planning and cost management. Here’s a breakdown of the key findings and how Tower MSA stands out in the industry.

CMS WCMSA Metrics Overview: 2020–2024

CMS’s fiscal year 2024 data provides a five-year perspective on MSA reviews, comparing proposed amounts to CMS-recommended (approved) amounts. Here are the major takeaways:

  • Consistency in Review Numbers:
    CMS completed 14,862 MSA recommendations in 2024, closely aligning with the five-year average of 15,138.
  • Decrease in Recommendations:
    After a 9% rise in recommended amounts between 2022 and 2023, 2024 saw a 6% drop.
  • Stable Average MSA Amounts:
    The average approved MSA decreased slightly to $85,927 in 2024 from $86,453 in 2023. However, this remains above the five-year average of $83,851.
  • Variance Between Proposed and Approved Amounts:
    The variance, which increased to 22% in 2023, remained steady at 21% in 2024.

Key Trends in Costs

  1. Prescription Drug Costs Continue to Decline

CMS data reveals a notable 33% decrease in average prescription drug costs over five years, from $26,574 in 2020 to $17,807 in 2024. This decline reflects:

  • Reduced opioid use in workers’ compensation cases.
  • Increased allocation of generic medications over brand-name drugs.
  1. Treatment Costs Are Rising

While prescription costs have fallen, the average treatment costs have increased by 15% since 2020, signaling a shift in the cost structure for MSAs.

How Tower MSA Partners Compares to Industry Averages

Tower MSA Partners has consistently achieved lower costs for its clients, significantly outperforming industry averages in both total MSA and prescription drug components.

  • Average Approved MSA (2020-2023):
    • CMS: $82,332
    • Tower: $63,005 (23% lower)
  • Prescription Drug Component (2020-2023):
    • CMS: $22,048
    • Tower: $14,286 (35% lower)

Through targeted interventions like our Physician Follow-up service, Tower mitigates costs while ensuring compliance with CMS requirements.

Why CMS Metrics Matter

These annual metrics provide invaluable insights for stakeholders managing workers’ compensation cases. They not only reflect trends in CMS review processes but also offer benchmarks to evaluate cost-saving strategies.

Tower MSA’s cost-effective approach demonstrates that significant savings are possible with a robust review and allocation methodology.

Have Questions? Let’s Connect

If you want to learn more about how CMS metrics impact your workers’ compensation program—or explore cost-saving opportunities—contact Dan Anders, Chief Compliance Officer, at Daniel.anders@towermsa.com or call 888.331.4941.

Top 5 Most Listened to Podcast Episode: Medicare Set Asides

November 20, 2024

image of microphone representing medicare set aside podcast

Medicare Set Aside Podcast Featured

We are delighted to announce that our very own Dan Anders, Chief Compliance Officer at Tower MSA Partners, has been featured in the Top 5 Most Listened to Episodes of Berkley Industrial Comp’s Adjusted Podcast!

The Adjusted Podcast recently reached its milestone 100th episode and is celebrating by highlighting its top episodes. Dan’s insightful discussion on Medicare Set Asides has made the list.

Listen to Dan’s episode here: Medicare Set Asides with Dan Anders

In this popular episode, Dan dives deep into the complexities of Medicare Set Asides, offering valuable guidance and expertise that have resonated with professionals across the workers’ compensation industry.

We are incredibly proud of Dan’s contribution and grateful to all the listeners who have made this recognition possible. Your support helps us continue our mission to provide clarity and solutions in the ever-evolving world of Medicare compliance.

Join us in congratulating Dan and the Adjusted Podcast team on this remarkable achievement! Let’s continue to engage, learn, and grow together in the workers’ compensation community.

Subscribe to our blog for more insights and updates from Tower MSA Partners.

Tower MSA Partners’ Chief Compliance Officer Dan Anders Featured on Ametros Podcast “It’s Settled”

September 25, 2024

Tower MSA Partners’ Chief Compliance Officer Dan Anders Featured On Ametros Podcast

Dan Anders, Chief Compliance Officer at Tower MSA Partners, was recently featured on Ametros’ podcast, “It’s Settled.

We are excited to share that Dan Anders, Chief Compliance Officer at Tower MSA Partners, was recently featured on Ametros’ podcast, “It’s Settled.” In this engaging episode, Dan sat down with Andrea Mills, Ametros’ Chief Client Officer, and John Kane, Senior Vice President of Strategy, to dive deep into the latest news and developments surrounding Medicare Set-Asides (MSAs). This discussion covered essential topics that impact the workers’ compensation and liability settlement space, including upcoming changes to Section 111 reporting, best practices for preparing MSAs, and the value of professional administration.

Upcoming Section 111 Reporting Changes

One of the key topics covered was the upcoming changes to Section 111 reporting and their implications for insurers and self-insured entities. Dan provided insightful commentary on what these changes mean and how they will affect the reporting process. With new compliance requirements on the horizon, now is the time for stakeholders to review their reporting strategies and ensure they are prepared for these regulatory shifts.

When to Prepare an MSA

Another critical topic discussed was when to prepare an MSA. Dan highlighted the importance of evaluating the need for an MSA early in the settlement process to avoid costly delays. He also provided insights into how Tower MSA Partners helps clients navigate complex cases by offering expert guidance on when and how to prepare MSAs effectively.

The Value of Professional Administration

The conversation also touched on the value of professional administration for MSAs, emphasizing how Ametros helps individuals manage their settlement funds to ensure compliance with Medicare’s requirements. Dan, Andrea, and John discussed how professional administration not only ensures the longevity of settlement funds but also helps alleviate the administrative burden on injured individuals.

Tips for Preparing an MSA

During the episode, Dan shared several tips and tricks for preparing an MSA, helping listeners understand the importance of accuracy and thoroughness when it comes to documentation. He also explained how Tower MSA Partners’ streamlined approach helps clients minimize risks and expedite settlements.

Upcoming Webinars and Conferences

As the discussion wrapped up, the group previewed upcoming educational opportunities, including a webinar, A Claims Professional’s Guide to Successful Settlements with MSAs, hosted by Tower MSA Partners on October 2nd. Dan encouraged attendees to sign up for this and other webinars to stay informed on compliance topics and best practices in the MSA industry.

Listen Now

You can catch this insightful episode of “It’s Settled” featuring Dan Anders by clicking here.

Stay tuned for more updates from Tower MSA Partners as we continue to provide our clients with the latest compliance and settlement strategies. Be sure to sign up for our upcoming October 2nd webinar to stay informed on these important issues.

Tower Premier Webinar: A Claims Professional’s Guide to Successful Settlements with MSAs

September 12, 2024

Join Our Webinar Expert Guide to MSAs

Overcoming Medicare Set-Asides Challenges: Key Strategies for Successful Settlements

Navigating Medicare Set-Asides can often feel like a daunting challenge during settlement. Even when all parties agree on the need to include an MSA, the allocation may be too high or the documentation requirements too burdensome.
However, the MSA hurdle can be overcome with the right approach.

Understanding when an MSA is appropriate, what’s needed to prepare a reasonable MSA, and how to manage cost and time factors are key to overcoming these obstacles.

Join Our Webinar: Expert Guide to MSAs on October 2, 2024

Join us on October 2, 2024, at 2 pm ET, as Tower’s Chief Compliance Officer, Dan Anders, and Brittney O’Neal, Director of Clinical Operations, present a claims professional’s guide to successful settlements with MSAs. In this webinar, we’ll cover:

•  The appropriate time to obtain an MSA
• Essential documentation for drafting an MSA
• Differentiating between Medicare-covered or non-Medicare-covered treatment
• Understanding the difference between submitted and non-submitted MSAs
• Strategies when a CMS-approved MSA cannot be obtained
• Utilizing the CMS re-review and amended review process effectively
•  Circumstances when a $0 MSA is appropriate
• The value of MSA professional administration and structured settlements

If you are interested in the ins and outs of MSAs, this free webinar is for you. Plus, if there is something about MSAs you’ve always wondered about, ask us! When you click on the registration link below, you will not only be able to register, but you can also submit a question to be answered during the webinar.

Hope you can join us on October 2 at 2 pm ET!

Register

MSA Amended Reviews – Key to Settlements of Old Dog Legacy Claims

October 26, 2023

Picture of someone reviewing documents of an MSA Amended reviews.

Tower’s Chief Compliance Officer Dan Anders’ enthusiasm for Amended Reviews kept the audience engaged during our recent Premier Webinar: Amended Review MSA Provides Second Bite at the Apple.

Several criteria dictate whether payers can submit an Amended Review, including the fact CMS needed to have approved the first MSA more than 12 months earlier. In addition, there must be a $10,000 or 10% (whichever is higher) difference between the first MSA allocation and the Amended Review MSA.

Our earlier post discussed CMS’s decision to remove the lookback period for Amended Reviews. Previously, we could only use this process if the original MSA had been approved during the last six years.  The removal of the lookback period opened the door for insurers and employers to examine their unsettled legacy claims that had any approved MSA and try to settle the claims.

Dan cautioned attendees not to submit an Amended Review MSA unless the injured worker seemed open to settlement.  “CMS’s change gave payers a second bite at the apple,” Dan said, “But it’s just one more bite, only one opportunity to obtain a new MSA.  You don’t get to eat the whole apple.”

The webinar shared facts and advice about Amended Reviews and highlighted several real case studies, including one where the second MSA amount was much higher than the first.  Some takeaways:

  • Request an MSA report to decide if an Amended Review MSA submission makes sense.
  • An Amended Review is not available until 12 months after CMS approved the first MSAA.
  • There’s no requirement to submit an Amended Review MSA for settlement purposes even if the CMS-approved MSA does not reflect current or future course of care.
  • Make sure all parties are at a stage where settlement is feasible.
  • Obtain medical documentation to support all medical and medication changes from the original MSA.
  • Unlike a regular MSA submission, where CMS requests more information and we can supplement and support the proposal in our response, the Amended Review MSA process offers no opportunity to provide documentation after submission. CMS will review what is provided and make its determination.

Attendees asked great questions:

  • Must the vendor who submitted the original MSA also submit the Amended Review MSA?

No. Tower can handle the Amended Review MSA even if a different vendor handled the original submission.

  • If an MSA was previously submitted for a Re-review, can it be submitted for an Amended Review MSA?

Yes.

  • Does the undertaking of an Amended Review make the previously submitted MSA null and void?

Only if the Amended Review MSA is submitted and approved.  The beauty of CMS-approved MSAs is that they never die.  If you can get the injured person and their attorney to agree, you can use it to settle, regardless of how outdated it is.

Like just about everything else CMS touches, the Amended Review process is complicated, and you can easily blow your one and only chance. Do not try this at home.

Dan is always happy to discuss cases and explore Amended Review and other options with you. Don’t hesitate to email him at Daniel.Anders@TowerMSA.com.

Remember, Tower can create MSA reports to help you decide if you want to pursue an Amended Review MSA. In addition, we’ll review your open claims with high CMS-approved MSAs and select those that could settle with an Amended Review MSA. We can also provide clinical recommendations to determine whether a physician statement, additional medical records or other intervention can result in a lower MSA.

Tower MSA Partners.  Don’t Settle with Anyone Else.

Premier Webinar: Amended Review MSA Provides Second Bite at the Apple

CMS now allows any previously approved MSA to have a one-time Amended Review.  This means that CMS will consider a new MSA submission that may be lower or higher than the previously approved MSA. Essentially, it is a second bite at the apple for old MSAs that, for whatever reason–they were too high, or the injured worker was not ready to settle–weren’t utilized for settlement.

Tower is pleased to feature our Chief Compliance Officer, Dan Anders, who on Wednesday, October 4, at 2:00 PM ET, will address the following topics:

  • Criteria for an Amended Review MSA
  • Is an Amended Review MSA required?
  • Documentation to support an Amended Review MSA
  • Examples of Amended Review MSA submissions

Besides Amended Review MSAs, the webinar will also consider how MSA Re-Reviews can reduce MSA amount resulting from CMS counter-highers.

A Q&A session will follow the presentation, and you can provide questions when you register. Please click the link below and register today!

Please note there is no CEU credit offered for this webinar.

Register Here

Easy MSA Cost Savings Through Structured Settlements

June 21, 2023

Calculator with text overlay that says “cost saving”.

Tower’s structured settlement partner, Arcadia Settlements Group, gave an in-depth overview of how Medicare Set-Asides, structured settlements, and professional administration facilitate workers’ comp settlements during our recent Premiere Webinar. Tower MSA Partners Chief Compliance Officer, Dan Anders, moderated the informative session that featured Alisa Hofmann, Arcadia’s VP of Workers’ Comp and Medicare Practices, and Lori Vaughn, who oversees its structured settlement programs.

As you may know, workers’ comp settlements can be paid out in a lump sum or through structured settlements.  Here are some not-so-fun facts about lump sums:

  • 25-30% of injured people exhaust lump sum settlement funds within 2-3 months.
  • 85-90% of injured people dissipate lump sum settlement funds within 2-5 years.

When injured workers exhaust these funds, if they are Medicare beneficiaries, they turn to Medicare to cover injury-related medical bills. And the whole point of the Medicare Secondary Payer Act is to prevent this.

Structured settlements protect the MSA funds by paying them over time as an annuity. The injured worker receives two years of the MSA allocation at settlement plus the cost of a first procedure or replacement if there are any. The rest of the MSA comes in annual payments, so the injured worker receives a consistent stream of funds for injury-related care over their lifetime.

For payers, this arrangement offers significant savings and a path to faster claim resolution, especially when paired with professional administration. And, like an MSA, the structured settlement shows Medicare that its interests are protected.

A Couple of Takeaways:

  • Structured settlements aren’t only for MSAs. They can be used for indemnity and funds for healthcare services and equipment not covered by Medicare. Even attorneys can be paid through these.
  • CMS-approved lump sum MSAs can be converted to a structured MSA but require submission to CMS of an attestation from the injured worker agreeing to the change.
  • It is easier to submit the MSA to CMS in the structured settlement format as if it is later decided to go with a lump sum there is no need to submit an injured worker letter to CMS agreeing to the change. In short, submitting in this format saves time, money and frustration.

Hofmann and Vaughn also discussed self-administration versus professional administration of the MSA. They urged payers to educate injured workers on the risks, rules, and responsibilities of MSA administration.

CMS prefers professional administration. Plus, some companies like our partner Ametros provide medical and pharmaceutical savings in addition to managing the fund and reporting.

With examples that show how structured settlements are calculated, the webinar is great for new claims representatives and those who want a refresh on settlement tools.  If you’d like to receive more information on structuring an MSA or a link to the recording, please email your request to Dan Anders at daniel.anders@towermsa.com.

 

CMS News Roundup: New Conditional Payment Appeals Guide & Webinar on Section 111 Reporting

May 25, 2023

Red Medicare button on a keyboard to illustrate Medicare conditional payment.

The Centers for Medicare and Medicaid Services (CMS) recently released a how-to guide for appealing Medicare conditional payment demands. The Non-Group Health Plan (NGHP) Applicable Plan Appeals Reference Guide consolidates conditional payment rules and best practices that the agency has issued through webinars, slides and its website.

Section 2.0 gives a breakdown of the appeals levels and explains how to submit an appeal and authorization/letter of authority requirements.  Section 3.0 details what can be appealed and supporting documentation.  Section 4.0 lists additional resources.  Finally, an appendix provides sample letters and model language for applicable plans to appoint recovery agents.

It is important to note that this guide does not cover Conditional Payment Notices (CPNs), which are issued before demand letters to allow the recipient 30 days to dispute the charges.  However, the bases for CPN disputes are the same as those found in Section 3.0.  When the dispute fails or is not timely, a demand letter is issued and the demand letter can be appealed, even with the same arguments used to dispute the CPN.

We appreciate CMS taking the time to draft and release this guide.  It joins the WCMSA Reference Guide and the Section 111 User Guide as critical reference tools for anyone impacted by Medicare Secondary Payer compliance.

CMS Section 111 Non-Group Health Plan (NGHP) Unsolicited Response File Webinar

The Centers for Medicare and Medicaid Services (CMS) recently published a Section 111 reporting webinar notice for a webinar on June 6, 2023 at 1:00 PM ET and states:

CMS will be hosting a webinar regarding the upcoming implementation of the Section 111 NGHP
Unsolicited Response File option. The format will be opening remarks by CMS, a presentation that will include background as well as how to opt in and what to expect, followed by a question and answer session. For questions regarding this topic, prior to the webinar, please utilize the Section 111 Resource Mailbox PL110-
173SEC111-comments@cms.hhs.gov

As of July 2023, Responsible Reporting Entities (RREs) can opt-in to receive a monthly “NGHP Unsolicited Response File” via the Section 111 secure website. Per CMS, the file “will provide critical information about updates to ORM records originally submitted in the last 12 months and allow RREs to either update their internal data or contact the Benefits Coordination & Recovery Center (BCRC) for a correction.”

It is important for an RRE to review and confirm that the changes made by the BCRC and listed in this report are correct.  If not, then the BCRC must be contacted to advise them that the RRE disagrees with the change made by the BCRC.  We encourage anyone involved in managing Section 111 reporting to tune in.  Please note that there is no pre-registration; the link and call-in numbers are on the notice.  You log in shortly before the webinar’s start time.

Related Articles

CMS to Provide RREs with Response File on ORM Record Changes

Premier Webinar: Easy MSA Cost Savings Through Structured Settlements

May 18, 2023

Details for June 7th Webinar on Structured Settlements.

One of the easiest ways to lower the settlement cost is through a structured Medicare Set-Aside. Not only does this reduce the payer’s cost of funding the MSA, but it also provides the injured worker a consistent stream of funds for injury-related medical care over their lifetime.

 On June 7 at 2 pm (EDT) Tower will present an informative session on structured settlements for MSAs. Tower’s Chief Compliance Officer will moderate a special guest panel from Arcadia: Alisa Hofmann, Vice President – Workers’ Compensation and Medicare Practices and Lori Vaughn, Director of Arcadia Client Programs. This hour-long webinar will show how structured MSAs can benefit all stakeholders in a settlement – the injured party, Medicare and the insurance carrier or employer.

Attendees will learn:

  • How to work with a structured settlement provider to incorporate an MSA structure into settlement.
  • The methodology CMS uses to calculate a structured MSA.
  • Rules around converting a CMS-approved lump sum MSA into a structured MSA.
  • The role of a structured settlement broker pre-settlement, during settlement negotiations and post-settlement.

A Q&A session will follow the presentation, and you can provide questions you’d like to have answered when you register. Please click the link below and register today!

Please note that there is no CEU credit offered for this webinar.

Register here.

About Alisa Hofmann:

Alisa is the Vice President of Workers’ Compensation and Medicare Practices at Arcadia Settlements Group and currently works on the Business Development team. She has been handling and overseeing Workers’ Compensation claims for almost three decades with various national carriers.  Alisa obtained her BA in Organizational Communication at Otterbein University. She maintains her adjuster licensing in many states, also holds Life, Health, and Accident Licensing, and many Insurance Accreditations. Alisa has been an active member of the National Structured Settlement Trade Association since 2019, and a member of The MSP Network where she serves on the Professional Administration and Structure-Education Committee.

About Lori Vaughn:

Lori Vaughn has 15+ years of experience in the structured settlement industry and currently oversees structured settlement programs for multiple workers’ compensation and private insurance carrier clients. She leads teams of consultants, case managers, and corporate employees, and is the primary point of contact for the corporate management team for each client. Lori obtained her BS in Kinesiology from California State University, Fresno, and her MS in Kinesiology from California Baptist University. She holds her Life, Health, and Accident licenses in many states and is a member of the National Structured Settlements Trade Association.