Medical Set Aside Account (MSA)

Oct 3, 2024 | Compensability

Medical Set Aside Account (MSA) – Part of your compensation for a work injury is medical care. With serious injuries, you might need medical care long into the future after settlement. So, we need to make sure the settlement includes potential future medical needs, and sometimes that involves creating a medical set aside account (MSA).

When you settle a work injury claim the settlement has to take into account how much of that settlement is for your future medical needs.

Informal MSA

An informal MSA can be done if the settlement doesn’t exceed a certain amount and the injured worker is not on Medicaid or Medicare, and not likely to be on those programs anytime soon.

In that case, the parties can come up with a reasonable amount for future medical care. Also, the injured worker controls the money, no one will ask where it went.

Formal MSA

A formal MSA typically is required when the settlement amount is higher and when the person is already on Medicare or likely to be on Medicare.

The formal MSA involves getting all of your medical records for the last 2 years, Also, evaluating what the doctors recommend, what the diagnosis is, the treatment you had in the past, and what the doctors say you might need in the future.

The insurance company creates a proposal to the Centers for Medicare Services (CMS) based on that. CMS reviews it and says if they agree or if it needs to be higher.

The importance of CMS

The importance of CMS signing off on the proposal is that if you’re on Medicare and you exhaust the money and you still need medical care for your work injury, Medicare will pick up the treatment from there on.

With a formal MSA you have to put it in a separate account, that account has to be interest bearing, you have to keep track of where you’re spending the money, you have to save the receipts and file reports, so it’s a lot of burden for the injured worker, that’s why often insurance companies and injured workers will agree on a professional administered MSA.

What do we look for in an MSA?

1. How’s it being funded? We need to make sure that there’s enough money going into it immediately so that you’ve got a good cushion.

2. Is it professionally administered?

3. What happens to the money if you die and there’s still money in there? We would try to get that money to go to your beneficiaries, but often insurance companies say they have a right of reversion, which means the money goes back to them.

You must have an attorney who knows how to evaluate an MSA, argue for more, and make sure that your settlement includes not only what Medicare might have to pay for in the future, but also the medical care that they won’t pay for.