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Frequently Asked Questions

What is an MSA?

A Medicare Set-Aside (MSA) is the most commonly used mechanism to protect Medicare’s interests when settling a workers’ compensation or personal injury claim that involves a Claimant who is Medicare eligible, or has a “reasonable expectation” of Medicare eligibility.

Why is an MSA Necessary?

Medicare is considered a secondary payer. Settling a case without considering Medicare’s interests violates the Medicare Secondary Payer statute by transferring the risk of future medical expenses from a primary source of payment (i.e workers’ compensation insurance) to Medicare. When a claim is settled without the parties properly considering Medicare’s interests, the Claimant, the insurance carrier and their attorneys may remain liable after the settlement.  The Claimant may also risk suspension, or denial, of his or her future Medicare benefits.  An MSA provides Medicare with proof that an appropriate amount of your settlement has been allocated for future medical expenses. Having an MSA minimizes the risk that Medicare will consider the entire settlement amount for future medical expenses.

When is an MSA Recommended?

An MSA is recommended in workers’ compensation settlements where the Claimant is eligible for Medicare or has a reasonable expectation of becoming Medicare eligible. Prior approval by Medicare is strongly recommended when:
  1. the Claimant is presently Medicare eligible and the settlement exceeds $25,000;
  2. there is a reasonable expectation of Medicare eligibility within thirty months of the settlement date and the settlement exceeds $250,000.

Are MSA's Required In Liability Cases?

While the Medicare Secondary Payer Statute clearly establishes that Medicare’s interests be considered in liability cases, there are presently no rules requiring a Medicare set-aside in liability cases. A liability Medicare set-aside and/or specific language in the release explaining how Medicare’s interests were considered, is recommended in cases where the Plaintiff may need Medicare to pay for post-settlement injury related medical or prescription expenses.

What are Conditional Payments?

A conditional payment is a Medicare payment for which another payer is responsible.  Medicare has a direct priority right of recovery against any entity, including a beneficiary, provider, attorney, state agency, or private insurer that has received any portion of a third-party payment directly or indirectly.  Medicare also has a subrogation right with respect to any such third-party payment.  Resolving the conditional payments issue is necessary in all cases where the Claimant/Plaintiff has been a Medicare beneficiary at any time during the claim.