Cynthia Boudreau

The Centers for Medicare Services define Medicare Set-Aside (MSA) allocations as financial agreements that allocate a portion of a workers’ compensation, medical malpractice or personal liability settlement to pay for future medical services related to the injury, illness or disease. These funds must be depleted before Medicare will pay for related treatment. 

We work with attorneys to evaluate a person’s future medical needs and recommend an amount that should be set aside for future medical care. Once the government approves this amount, the administrator of the MSA fund uses the money to pay for medical care related to the plaintiff’s injury. For example, if there is a settlement case for $6 million, and $2 million of that was approved for medical and care costs, that amount is put aside for future medical costs.  

Allocations Not Required in All States 

MSA allocations are not required in Massachusetts currently; only Maryland requires them right now. The conditions under which an MSA is required vary by state, and attorneys need to be prepared. While an MSA is not required in all states, the federal government requires that Medicare’s interests are considered in all settlements for those people who are Medicare beneficiaries or likely to become a beneficiary in next 30 months. 

MSAs have been used for years in workers’ compensation cases and the government has extensive reporting and monitoring rules in place. MSA law is complicated and constantly changing, reinforcing the need for an experienced life care planner. 

Ensuring an MSA Is Completed 

When MSA allocations are mandated, it is the attorney who is responsible to ensure one is completed and the money is put aside. Medicare can collect against insurance carriers, the client, their legal counsel and their advisors – any counsel involved in a settlement – because of workers’ compensation, liability or no-fault settlements when the financial interests of Medicare are not protected with an MSA. 

The Importance of Professional Advice 

The Centers for Medicare and Medicaid highly recommends including professional administration in the case of an MSA. It’s recommended because there are many rules and regulations that go into administering an MSA account, and it’s very easy for the injured party to risk their Medicare benefits by mismanaging their account. A professional can help take the burden off the injured party when it comes to reporting to CMS and tracking and managing funds. 

Cynthia Boudreau is a registered nurse and founder and president of Belchertown-based Medical and Life Care Consulting Services Inc. She may be reached at cbourbeau@medicalandlifecare.com.