Protect the Future with an MSA

In the Workers’ Compensation (WC) world, evaluating the appropriateness of a Medicare Set Aside account (MSA) is (or should be) a standard case management practice for any person with a work-related injury who is nearing or over the age of Medicare or Medicaid eligibility. However, because setting up the MSA in a WC case remains optional per Centers for Medicare and Medicare Services (CMS) regulations, many injured workers and their work- or insurer-based case managers elect not to submit an MSA proposal to CMS. Instead, after filing the requisite notice to CMS that a Medicare-eligible person suffered an injury at work, they then resolve the case without further consideration of the interests of that federal agency. Their failure to include CMS in those deliberations, however, may lay the foundation for significant barriers for the injured person in the future.


The MSA as a Case Marker

The primary reason for the Mandatory Secondary Payor Act is to prohibit the use of Medicare funds for medical expenses when another legally obligated person or party should bear those costs. For this reason, CMS requires WC insurers to notify it when an injured worker is also a current or soon-to-be Medicare recipient. On its end, the CMS creates a file for every injured Medicare recipient (or soon-to-be) who is or will receive payments from a group health insurer, including WC insurers. Using the resulting database, CMS can determine the primary versus secondary payer responsibilities of its beneficiaries and ensure that it is not making payments that are the obligations of those primary carriers. Once it receives the notification of this particular injury, the CMS file can reflect that their current or future beneficiary has/had an injury that is/was being managed by an appropriate third-party obligor.


Unfortunately, after the notification, there's no requirement to do more regarding the CMS, and many WC claimants don't follow up their CMS notification by also submitting an MSA proposal or otherwise reporting the circumstances of the conclusion of the case. This oversight leaves a significant gap in the CMS file since that agency now has only half a record of the injury in its archives, but no history of the resolution of that claim. And it's in that gap that so many problems can fester.


From Half a Claim to Legal Morass

From a legal perspective, that incomplete CMS file can trigger numerous challenges:

  • One element of the notification report is the submission of the ICD-9 codes that describe the injury. The notification is made (usually) toward the beginning of the case as the injury and its related IDC codes are determined.


However, as the case evolves, the evidence may reveal that some of the injuries noted are not actually attributable to the work-based incident but instead may be pre-existing or due to some other cause. The WC carrier may appropriately decline to cover those costs, so they are not included in the final settlement negotiations, nor are they covered by the MSA. The CMS file, however, retains that code as attributable to the WC injury, which can lead to CMS declining to cover its care, thereby leaving the claimant/beneficiary with no coverage by either the CMS or its WC insurer.


Other challenges can also arise when the CMS file is left incomplete.

  • Conflicting data from different sources - the plaintiff's lawyer and the healthcare providers, as examples - can cause duplicate demands by CMS for reimbursement of conditional payments, a circumstance that can trigger its own lawsuit.
  • Future injuries can also cause problems for the insured if any future CMS injury/claim reports include the same or similar codes as those submitted in the WC case. With no record of how the WC case parties managed those prior injuries, CMS can justifiably require proof that the second injury is separate from the first, WC injury, and that request will cause unnecessary delays. Alternatively, CMS can deny that second claim, believing it to be related to the previous case, which leaves the injured Medicare beneficiary with no medical coverage for their new injury.


Submitting an MSA proposal and including CMS in the WC case can alleviate these challenges.


More Than a Bank Account


Establishing an MSA is much more than just the negotiation of a settlement figure and the opening of a trust account. The process of creating an MSA provides a host of benefits for the claimant and parties to the case, both immediate and future:


In the Near-term:

The process of creating an MSA proposal generates a wealth of data for everyone involved in the case. The analysis of the injury, its physical manifestation, its medical intervention requirements, and the cost for long-term recovery all provide information that will inform the legal management of the case. With this data, the parties to the case gain the knowledge they need to come to a reasonable resolution:

  • For the WC insurer-payor, the analysis forms the basis for its resolution negotiations so it can set appropriate funding levels and manage its resources properly.
  • For CMS, the analysis included in the proposal clarifies the extent of the injury, provides a defined scope for its care and recovery, and offers assurance that its beneficiary will not require Medicare funds for treatment of this particular concern.
  • For the claimant, the MSA analysis clarifies the treatment plan for their particular injury and the cost estimate for the care and recovery period. With this information, they can settle their case and move on with their life.



In the Long-term:

After the case closes, the parties can move on to other projects, knowing that the WC case is behind them:

  • Insurers can fund the account and then close the case with a reasonable assurance that it will not require additional funding or attention.
  • For CMS, submission of the resolved case and its accompanying MSA will bring its files current with those of the case participants. The agency will know what the evidence revealed in terms of contingent liability, who is paying for what, the extent of the injuries, the prognosis for future care, and the estimated costs of that care. It also has a record of the beneficiary's health situation at the conclusion of the case and can refer back to that point in time when evaluating future claims.
  • For claimants, they can plan their future, knowing that they have the funding necessary to recover from their injury as completely as possible.


But Claimants now also have the added benefit of a clear record with CMS, which may prove essential for their future well-being. Why? Because, as Medicare recipients, they are aging, and that circumstance escalates the value of CMS to their future.


Medicare and the Aging Population

By definition, Medicare recipients are at or over the age of 65, and that population is growing. According to the US Census Bureau, the population of people 65 and over  grew by 15.1 percent in the ten years between 2000 and 2010, outpacing the growth of the population in general. This year, the number of 65+ citizens should hit 55 million and, by 2030, is estimated to grow to 70 million. It will stress the funding for Medicare to service that further growth, so it is expected that the CMS will be more stringent than ever that primary payments be exhausted before an injured person seeks financial support from it as the secondary payer.


And that growing population also grows bigger concerns. With every passing year, the risk of developing a disease or incurring another injury rises for each senior. Declining eyesight, hearing loss, and slower reflexes can all contribute to declining health or reduced capacities. High blood pressure, diabetes, compromised pulmonary systems and similar conditions can cause a variety of symptoms, and many medications can cause physiological challenges even if the underlying condition for which they were prescribed doesn't.


Further, while many diseases and conditions related to aging can also increase the risk of injuries, many otherwise healthy seniors will suffer a serious injury simply by falling in their home or community. According to reports by the Centers for Disease Control (CDC), falls are the number one reason for fatal injuries in people over 65 years and they are the most common reason for nonfatal traumatic hospital admissions. Additionally, 25% of all Americans over 65 fall each year, resulting in more than 2.5 million trips to the emergency room, over 800,000 hospital stays, and 27,000 deaths.


Often when a fall occurs in this population, in many cases, Medicare is the only available option for health care services for these seniors. An insufficient case file at CMS that fails to provide information on the resolution of previous injuries could delay receiving care for an instant concern, which can also cause complications in getting help in a timely way. That confusion can also cause the denial of the new claim, which could trigger a drawn-out battle to clarify actual eligibility for new resources. Considering that 10% of all falls in seniors cause major injuries, even a slight delay in getting care could be disastrous for the aging patient.



How Does a Current MSA Alleviate Future Concerns?

The MSA clarifies for the CMS file what those previous injuries were and how they occurred, the details of the managed treatment plan, and who paid for those services. It also encapsulates the circumstances of that injury to that resolved case and reduces the likelihood that CMS will require information about that case before authorizing resources for the current concern. Not least significant, by submitting and gaining acceptance of an MSA in a WC case, the claimant's future file with the CMS is transparent as to prior injuries so that they are eligible to receive timely and appropriate care when future injuries occur.


To date, there is no requirement to submit an MSA proposal to CMS prior to resolving a WC case. However, considering the future challenges posed by failing to do so, it seems prudent and a best practice to develop and file one in every WC case with an injured Medicare (or soon-to-be) recipient.  Not only will the process clarify the specifics of that injury, but the MSA itself will protect the worker's opportunity to receive Medicare benefits for future injuries.