When a claim settles, many claimants find themselves with a large sum of money that they are required to manage on their own. This can be overwhelming for many people and it’s important to understand the challenges facing these claimants.
In cases where the parties are settling future medicals, and a Medicare Set-Aside (MSA) is involved, following the rules and regulations to maintain compliance can be difficult. And failing to meet the requirements of Medicare can carry costly penalties.
Here are some of the challenges claimants may face in managing their MSA and in complying with federal regulations.
Medicare Set-Aside levels are not handled correctly
When a claimant receives their MSA funds, they have certain obligations that go along with administering those funds. Claimants are typically unfamiliar with how to administer MSA funds—and unfortunately, some don’t care to learn. There are three common issues that arise from this unfamiliarity:
- Using the funds properly
- Paying the proper rate
- Reporting to Medicare
Determining which treatment costs are related to the settlement funds
A crucial part of administering an MSA is making certain that the funds are only used to pay for Medicare covered treatment related to the injuries in the claim. Claimants without the right training might not understand what treatments do and do not relate to their injury settlement. Even if they do understand which treatments are related to their injury, they may not know how to read a bill from the provider to understand what treatment that bill is for.
Perhaps even more complicated is knowing what is or is not covered by Medicare. Some treatments, and most medications, are Medicare covered for some, but not all treatments. When you get into items like scooters or prosthesis, it can be as nuanced as the specific features of an individual device. This can render one scooter covered and another not covered for the same body part. The risk is that if the claimant takes on this responsibility and pays for something they should not, Medicare could refuse to pay for future treatment or seek other remedies.
Even if claimants can sort out their reimbursable charges, there is still a danger of exhausting MSA funds more quickly than anticipated.
Paying the best price
The rates paid for care can also be a problem for claimants. Many claimants pay retail prices for medical care because they do not have access to a medical network and do not have the ability to push providers to pay the fee schedule rate. The result is that they can prematurely exhaust their MSA.
While Medicare becomes responsible for payment of treatment if the claimant is on Medicare once the MSA is properly exhausted, prematurely exhausting the MSA can have serious consequences for the injured party. The most common consequence is that they now become responsible for any co-pays or other out of pocket expenses they are required to pay as part of their Medicare enrollment. That means the injured party goes from not having to pay for any part of their treatment to now having to pay out of pocket for a portion of their treatment.
Reporting to Medicare
The final challenge that faces a party administering their own MSA is their obligations to track how funds are used and report to Medicare. Medicare requires a party to hold their MSA funds in a separate interest-bearing account. That interest must be applied to the MSA. Every year, party administering the MSA must report the use of funds and amount left to Medicare.
A key part of this is notifying Medicare when the MSA funds are exhausted. This notice allows Medicare to know that they should start paying for treatment rather than expecting the MSA to be used. If the injured party received a lump sum, then this will happen at most once in their lifetime. However, if they are receiving annual payments through an annuity, this could happen every year. Failure to properly notify Medicare could cause issues with the injured party receiving treatment.
Professional administration guides claimants through MSA management challenges
There are options for claimants that can help them manage their MSA appropriately. Companies offering professional administration services guide claimants through the complex network of future care determinations resulting from their injury. Professional administration can be especially beneficial for major injury cases that involved complex future medical needs or high cost treatments.
Professional administration services also give claimants peace of mind about which medical expenses are related to their injury and that the price charged is correct. Administrators will typically review bills, prescriptions, and other medical charges to make sure those charges are in line with Medicare’s rates. They also help track the funds and report to Medicare when the MSA is exhausted.
Care network programs can provide treatment at a value
Some claimants don’t need full professional administration and would prefer to keep their MSA funds in their own account. They may also be capable of tracking those funds and want to be free to control their money. Such claimants usually still face the challenge of knowing what Medicare covers, paying the proper rates for their care, and knowing when and how to report to Medicare.
For these claimants, assisted administration can be a great option. It allows the claimant to hold their money in their own account, so they are in control of the funds. At the same time, they get the benefits of having each charge reviewed to ensure it is related to the injury and covered by Medicare, access to a network that can reduce the charges, and assistance with reporting to Medicare.
The right program for any need
Managing an MSA after a settlement is a daunting task for most people, but there are programs out there that can provide meaningful help to claimants through professional administration or network care access. Enrolling in the right program can extend the life of an MSA beyond even the projected timeframe and ensure compliance with CMS rules.
ISO Claims Partners offers CareMDRx for post-settlement programs for both professional administration and assisted administration options. CareMDRx combines the benefits of professional administration with ISO Claims Partners’ position as an industry leader in all aspects of Medicare compliance and the support and expertise that comes with ISO.