Tips for Self Administering a Medicare Set-Aside in Third Party Liability Cases
The majority of your clients’ Medicare Set-Aside (MSA) arrangements will be self administered. Depending upon the amount of money in the MSA and your client’s personal circumstances, self administration can prove to be a challenge. A bank account has to be established, healthcare providers need to be notified and qualified claims need to be recorded and paid. The most difficult part of the process is getting started. Once healthcare providers are made aware of the MSA, the invoices and payments will begin to flow automatically. If your client chooses to self administer, the following tips may make the process a little easier.
Upon receipt of the money that has been “set aside” for your MSA, promptly deposit it in a bank account. The Center for Medicare and Medicaid Services (CMS) requires that the money that has been set aside for an MSA be placed in an interest bearing account which is separate from any personal checking or savings account. You will likely keep the same account for the duration of the MSA, even when the balance is low, so look for a checking account that pays interest but does not charge fees when the balance is low.
Qualified MSA Healthcare Expenses
Qualified MSA expenses are those that 1) are normally covered by Medicare and 2) relate to the injury that gave rise to your suit. This is important criteria that you will need to convey to physician and hospital billing departments when you notify them that you have an MSA.
Your MSA is primary as of the date that your case was settled. All care rendered after the date of settlement that qualifies as an MSA expense must be paid from the MSA and should not be paid by Medicare. Your aim is to exhaust your MSA as soon as possible by paying qualified expenses so that you can return to full Medicare benefits as soon as possible.
There are many resources available to assist in determining whether a particular kind of care is “normally paid by Medicare.” If you have obtained a formal Medicare Allocation report, this will contain a list of expenses that will qualify as an MSA expense and those that do not. Other resources include the “Medicare and Me” brochure published by CMS or call 1-800-Medicare and speak to a representative. If you are already a Medicare beneficiary, review recent Medicare Claim Summaries or sign up online at www.Medicare.gov. This will provide a claim history going back a year and a half and will show a summary of claims that have been accepted or rejected by Medicare.
Unexpected and significant medical expenses related to your injury can occur. Ultimately, you are in the best position to determine if a particular expense relates to the injury that gave rise to your liability case. There are not a lot of guidelines published by CMS on this topic but be reasonable in your conclusions and only pay for expenses that are arguably related to the injury that gave rise to your case. Conditions that were preexisting prior to your liability case such as Hypertension or Diabetes will likely not qualify as an MSA expense.
Communicationg With Health Care Billing Departments
The easiest way to put your provider on notice is to create an MSA card that is similar to cards issued by health insurance companies. The card should include your name, the effective date (date that your case settled) and describe the nature of the injury that gave rise to the liability case.
If the provider did not receive notice of the MSA and already billed Medicare, contact the provider and explain that Medicare should not have been billed. To rectify the error, explain to the provider that the bill should be sent to you directly. You will pay the provider out of the MSA account and upon receipt, it is the provider’s responsibility to pay back Medicare.
Explain to the provider that you will be paying full and actual rates, not the Medicare Assigned rate. The invoice should reflect these rates and should also include the Medicare codes that would be included had the invoice been sent to Medicare.
Keep excellent records. Although liability MSAs do not have to be submitted to Medicare currently, and you do not need to send Medicare written records of MSA expenses, retain these records indefinitely because there could be a reason in the future when you may be asked to prove that the MSA account was properly administered.