Medicare Set-Aside Overview

CCT provides post-settlement professional MSA Account and Pooled Special Needs Trust administration services.

Following settlement of a worker’s compensation or liability lawsuit, federal law prohibits Medicare from paying for injury-related medical expenses or medications that an employer or health insurer is primarily responsible to pay. To ensure Medicare does not pay a medical expense or medication when it is not primarily responsible, federal regulations require that a portion of settlement funds be “set-aside” in an account to pay for future injury-related medical expenses and /or medications known as a Medicare Set-Aside (MSA).

The Centers for Medicare and Medicaid Services (CMS) has issued guidelines governing how MSA’s are to be handled in order to assure future eligibility for injury-related Medicare benefits.

The following are examples of the CMS guidelines for record keeping and the reporting requirements governing how funds in the MSA for prescriptions and other medical expenses can be disbursed:

  • Pay only for medical bills incurred for the exact injury that is the subject of the workers’ compensation or liability case and covered by Medicare.
  • Submit a yearly accounting of all expenditures from their MSA Accounts to Medicare, including receipts.
  • Determine which medications are Medicare-covered expenses, and contact the doctor to find an appropriate substitution, if the medication is not a covered expense.
  • Monitor ongoing medical treatments and review any newly prescribed treatments or medications to ensure compliance with CMS regulations.
  • Find Medical providers and pharmacies willing to accept payment based on the pricing method selected in the MSA documents and approved by Medicare.

Maintaining compliance with these and numerous other regulations for MSA Accounts is overwhelming for non-professionals. However, failure to follow every guideline can jeopardize future Medicare eligibility for injury related care.

In some cases, individuals may require a Special Needs Trust as well as a Medicare Set-aside Account (MSA).   This occurs when an individual is currently a Medicare beneficiary or has a reasonable expectation of becoming a Medicare beneficiary in the future and is also eligible for means-tested government benefits such as Supplemental Security Income (SSI) or Medicaid.   In these cases, an MSA is created at the time of settlement to cover injury related care that would otherwise be covered by Medicare.   MSA funds are considered income and can disqualify an individual from receiving SSI or Medicaid.   Therefore, it is advantageous to nest the Medicate Set-Aside Account within the CCT First-Party Special Needs Trust in order to maintain continued eligibility for SSI and Medicaid benefits.

In cases of dual eligibility, CCT will contract with a third-party MSA administrator who will manage the MSA accounts within the confines of CCT’s First Party Pooled Special Needs Trust.  The MSA administrators have expertise in managing the detailed requirements for workers’ comp and liability clients in compliance with Medicare law and the strict CMS regulations, rules and policies.

To set up a MSA/Pooled Trust account with CCT, see the Process Of Joining.