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Workers' Compensation

The Medicare Set-Aside and How it Works

By January 25, 2022No Comments

Medicare’s interests should be protected when considering a workers’ compensation settlement that closes out the medical portion of your claim. In some instances, an approved Medicare Set-Aside (MSA) is necessary.

An MSA is a “financial agreement that allocates a portion of a workers’ compensation settlement to pay for future medical services related to the workers’ compensation for injury, illness, or disease.” In other words, it’s money that is set aside from the workers’ compensation settlement to pay for future medical treatment related to the compensation claim.

An MSA serves to protect Medicare’s interests as well as the future interests of the injured worker. Medicare could pay for future treatment related to a workers’ compensation claim if the MSA requirements are met. Without one, Medicare could deny compensation for future treatments related to a claim unless MSA funds are made available beforehand, with their use prioritized and properly documented. Unused MSA funds must be used before Medicare will provide compensation for remaining costs.

An MSA is necessary if you are in receipt of Medicare benefits, or there is a reasonable expectation that you will become Medicare enrolled in the future. That is, if you have applied for Social Security Disability benefits, are approaching age 65, or have kidney failure, there is an expectation that you will be in receipt of Medicare benefits in the future, and an MSA is necessary.

Although an MSA is not required by statute or regulation, it is highly recommended. The amount of the MSA is determined on a case-by-case basis and proposals need to be approved by the Centers for Medicare and Medicaid (CMS) to be valid.