Self Administration Toolkit for WCMSAs

On April 11, 2014 the Centers for Medicare and Medicaid Services added a Self Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements to its CMS.gov website. It can be viewed here.

The resource is designed to aid workers’ compensation claimants in the self administration of their MSA accounts with the proper establishment of, and expenditures from, their WCMSA account. It describes self administration guidelines and procedures including the need to establish an interest bearing account for the funds and explains the payment of medical bills using MSA funds to reimburse providers and annual accounting requirements. It includes form letters to be provided to medical providers and sample transition records for MSA expenditures. Additionally, it explains circumstances where an MSA is temporarily and/or permanently depleted based on lump sum or annuity funding.

The Toolkit is the first comprehensive outline of the compliance obligations that are incumbent upon workers’ compensation claimants after settlement. This guidance suggests that CMS recognizes the failure of most claimants in the proper management of their MSA to ultimately protect their Medicare benefits and those of the Medicare Trust Fund. The guidance advises injured parties regarding the use of Workers’ Compensation state Fee Schedules in reimbursing providers and in properly advising Medicare as to the use of the MSA account. CMS advises that the Toolkit can help in the management of the account and “satisfy Medicare’s interests related to future medical care.” Additionally, it cautions that prior to treatment for a workers’ compensation injury a claimant “must” advise a healthcare provider of the existence of a WCMSA. CMS further suggests that bank statements and tax records should be kept as the documentation may be requested by CMS as proof that the account is administered “correctly”.

The complicated rules and extensive knowledge required to adequately identify the medical bills which are applicable to the Medicare Set Aside account preclude successful management of these funds by most Medicare beneficiaries.  When paired with CMS’ explicit and implicit warnings regarding its future interests and the potential denial of Medicare benefits based upon inaccurate or incomplete evidence of proper exhaustion, the Toolkit may cause alarm for claimants.   CMS further advises that a Medicare beneficiary seek the advice of a professional for assistance with the proper use of the MSA funds when confidence is lacking.

To simplify these requirements and ensure proper exhaustion of the WCMSA, Gould and Lamb Trust Company offers the following services:

Post Settlement Account Administration

High-touch trust and account management.

The Gould & Lamb Trust Company ensures compliance and no loss of benefits through professional administrative services for Medicare Set-Aside, Medical Custodial Accounts, and Special Needs Trust accounts. This service provides dedicated assistance, choices in management of settlement funds, and 24/7 access to account information via a secure web-based portal.

MSA Self-Administration Support Service

  • Low cost alternative to professional administration
  • Offers ongoing access to a dedicated representative offering guidance to properly disburse Medicare Set Aside funds
  • Access to discount prescription drugs, durable medical equipment (DME), outpatient services and case management
  • Assistance with CMS Annual Accounting
  • Resolution of temporary and permanent exhaustion

Professional Medicare Set-Aside (MSA) Administration

  • Preparation of professional administration agreement
  • Establishment of the MSA interest-bearing account
  • Access to discount prescription drugs, durable medical equipment (DME) outpatient services and case management
  • CMS Annual Accounting
  • Resolution of temporary and permanent exhaustion

Medical Custodial Account (MCA)

  • Preparation of professional administration agreement
  • Establishment of the medical account offering discount prescription drugs, durable medical equipment (DME), outpatient services and case management
  • Medical Account Coordination with a Medicare Set Aside account

Special Needs Trusts (SNTs)

  • Trust document preparation and professional trustee services
  • Coordination of asset management
  • Trust administration, including annual accounting to Social Security, Medicaid, the Courts and IRS, as required
  • Access to discount prescription drugs, durable medical equipment (DME), outpatient services and case management


The Global Leader in Compliance

To receive a quote for assistance with Self Administration or Professional Administration of a WCMSA or to learn more about our MSP compliance services, call 1-866-MSA-File and ask to speak with Bobbie Chasco at extension 1022.

Post Settlement Administration – Back to Basics

Christie Luke Vice President OperationsThe Code of Federal Regulation (42 CFR Sections 411.46 and 411.47) provides that payment for injury related medical expenses and prescription drug expenses should not be shifted to Medicare from the primary or “responsible” party.  In order to accomplish this goal, a portion of a claimant’s settlement or award can be set aside to pay for future accident related medical services and prescription drug expenses that would otherwise be reimbursable by Medicare.  The bottom line is: Medicare will not pay for any medical expenses or prescription drug expenses for the accident related illness or disease after a settlement or award is received, until the amount allocated (or “set-aside”) for future medical expenses and future prescription drug expenses, that would otherwise be reimbursable by Medicare, are “properly” exhausted.

Medicare Set-Aside Administration Requirements

The key word, of course, is properly. The question becomes: “Is this is being done?”  The complexities surrounding this task can be astonishing.  The following are the basic requirements for ensuring that settlement funds are properly exhausted:

1. Medicare Set-Aside Account – The MSA funds shall be placed in an interest bearing account, which is separate from any personal checking or savings account.  A copy of the documents establishing the MSA account should be sent to CMS at Coordination of Benefits Contractor within 30 days of disbursal of the settlement.

2. Distribution of funds from the Medicare Set-Aside Account – The funds in the MSA account shall be used solely for expenses related to medically necessary services or supplies or prescription drug expenses incurred for those medical needs related to or resulting from the related injury, which would otherwise be reimbursable or paid for by Medicare.  Funds in the MSA account shall not be used to pay for medical services or prescription drug expenses not covered by Medicare.

3. Set-Aside Account Interest – All interest earned on the Medicare Set-Aside account will be allowed to accrue in the account and will be used solely for medical expenses and prescription drug expenses that would otherwise be covered by Medicare and for taxes, banking fees, mailing fees, or document-copying charges related to the account.

4. Reimbursement to Medicare – In the event CMS determines that Medicare has erroneously paid benefits, CMS (or its designated Contractor) shall have the right to seek and receive reimbursement of any such conditional payments or overpayments.

5. Accounting Records – The administrator, whether the claimant or a professional custodian, shall maintain accurate records of the distributions and expenditures from the MSA account.  The records should indicate:

  • the date of service;
  • the name of the medical provider, supplier or pharmacy;
  • the medical diagnosis, procedure, service, or item received;
  • the amount paid for the medical expense or prescription drug expense;
  • and the date of the payment.

The administrator shall also retain a receipt or other evidence of each and every payment made from the MSA account.

6. Annual & Final Accounting and Delivery of Notices – The administrator shall submit all required annual accounting of the MSA and notices to MSPRC.  The annual accounting shall be submitted no later than 30 days after the close of the annual accounting period (which is the anniversary of the funding of the MSA from the award or settlement).  The administrator shall submit a final accounting within 60 days of the funds being depleted.  The annual and final accounting will include the information set forth in paragraph 5 above.

7. Distributions Following Death of Beneficiary – In the event that the Medicare beneficiary dies before the funds in the MSA are depleted, the account will continue to exist for payments of any outstanding bills for accident related medical expenses and prescription drug expenses. Any remaining monies shall be paid to the beneficiary’s estate or subject to state law.

8. Inappropriate Set-aside Account Expenditures – If, after the MSA account is depleted, the final accounting reveals that funds in the account were used to pay for items other than Medicare allowable expenses related to necessary services, supplies, or prescription drug expenses resulting from the accident related injury, Medicare will not pay for any future injury related medical expenses or prescription drug expenses until the funds have been restored to the account and properly exhausted.

Post-settlement administration programs are designed to accomplish two main goals: provide claimants with support from either an advisement role or an administrative role, and to protect Medicare’s interests. Management of post-settlement funds is crucial to both sides of the equation and, if not properly monitored and allocated, can lead to severe consequences. With the proper attention, both parties’ interests can be protected and further action can be avoided.

About the Author: Christie Britt is the Vice President of Operations overseeing the extensive operations of Gould & Lamb.   She has vast knowledge of Medicare Set Asides and Post-Settlement Administration from an insurance claims perspective. Christie is MSCC certified and has her Green Belt Certification in Six Sigma.  She is also a member of the National Association of Medicare Set Aside Professionals (NAMSAP) and the Workers’ Compensation Claims Professionals (WCCP).

Gould & Lamb is a global leader of MSA/MSP Compliance Services in the country, serving domestic and international insurance companies, third-party administrators and self-insured entities.

Better Solution to Medicare Set Aside (MSA) Post Settlement Administration – Without Compromising Quality

Christie Luke Vice President OperationsAccording to the 2011 Annual Report of the Boards of Trustees released in May, 47.5 million people were covered by Medicare in 2010, 17% were disabled, and only 25% had chosen to enroll in Part C private health care plans.  Trust fund income was $486 billion and total expenditures were $523 billion.  While there was some improvement from prior years, there is still work to be done.

The Medicare Secondary Payer (MSP) Statute was passed in 1980 to provide protection to the Medicare Trust Fund by giving the Center for Medicare and Medicaid Services (CMS) authority to recover payments made by Medicare where a primary payer exists and to avoid payment for future care related to an injury or accident.  This protection offered to the Medicare Trust Fund is a crucial part of ensuring the future solvency of the Medicare program.

Education of MSA Administration is Important

As the MSA industry continues to grow and transform, the education of everyone involved throughout the process – from the MSA creation and submission to the funding and administration of the MSA funds – becomes more important.  Post settlement administration of MSA allocations is a very complicated part of the entire process and can be confusing, especially for claimants.

According to the recent contract award (Workers’ Compensation Review Contractor), an estimated 24,000-30,000 reviews of MSAs will be completed in the coming year.  Yet, only a small fraction of those reviews are submitted as Professionally Administered, while the remaining are submitted as ‘allegedly’ Self Administered.  Historically, there has been a high level of suspicion as to the level of compliance of those self administering which is often attributed to laziness or lack of understanding due to the complexity of administration.

Post Settlement Process Considerations

As with any business, there are costs associated with the process.  However, there are cost-efficient and smart alternatives that exist and should be considered as part of the settlement process.  The key is to find a long term solution that meets the individual needs of the claimant over his or her lifetime (while ensuring MSP compliance and solvency of the Trust Fund).  The alternatives range from Self Administration Support Services which includes physician contact, bill review, and annual reporting to full Professional Administration.  Long gone are the days of little choice in this regard and contingencies of the case must dictate the level of support.

There are several complexities and intricacies surrounding post settlement administration of funds including:

  • Knowledge of state fee schedules and/or usual and customary rates
  • Knowledge of Medicare coverage guidelines (medical care and prescription drugs)
  • Understanding when to pay from the MSA funds and when to notify Medicare to pay; depending on the funding arrangement of the MSA
  • Handling of the account if it is depleted (temporary or permanent)
  • Notifying CMS throughout the life of the claimant
  • Handling of interest income and taxes

It is important to consider the details of each case and its post settlement activity on a case by case basis.  While some cases require less attention, it cannot be assumed that this will be the norm.  Beneficiaries have the option to enroll in private health insurance plans that contract with Medicare to provide Part A and B medical services which affect the beneficiary’s access to care post settlement.  The type of service (e.g., inpatient hospital care and physician visits) and other applicable statutory provisions must always be considered when managing funds.

Cost vs. Benefit

When managing claim files, it is reasonable for a claims professional to expect affordable and cost-effective alternatives for post settlement MSA administration products.  Finding innovative new methods of delivering alternatives and achieving better cost efficiencies is imperative, but it is also essential to provide claimant’s with a viable solution that ensures MSP compliance in the long term without compromising quality.


About the Author: Christie Britt is the Vice President of Operations overseeing the extensive operations of Gould & Lamb.   She has vast knowledge of Medicare Set Asides and Post-Settlement Administration from an insurance claims perspective. Christie is MSCC certified and has her Green Belt Certification in Six Sigma.  She is also a member of the National Association of Medicare Set Aside Professionals (NAMSAP) and the Workers’ Compensation Claims Professionals (WCCP).