Medicare Set-Asides


In the settlement of workers’ compensation claims, Medicare Set-Asides are a tool used to consider and protect Medicare’s interests, pursuant to the Medicare Secondary Payer (MSP) Act.

A Medicare Set-Aside (MSA) is an account that is created in the settlement of an individual’s workers’ compensation claim that is used to pay for future medical expenses that are:

  • Attributed to an individual’s work-related injury; and
  • Would otherwise be payable by Medicare.

When a Medicare Set-Aside Is Recommended

The CMS-issued Workers’ Compensation Medicare Set-Aside Reference Guide indicates when settling a workers’ compensation claim, a Medicare Set-Aside is recommended if the future medical aspect of the claim is being settled and one (1) of the following exists:

  • The Claimant is currently a Medicare beneficiary and the total settlement amount is greater than $25,000; or
  • The settlement amount exceeds $250,000 and there is a reasonable expectation that the injured worker will become a Medicare beneficiary within thirty (30) months of the settlement.

Medicare Benefit Eligibility Requirement

An individual is eligible to receive Medicare benefits for certain medical and hospital expenses if they meet one of the following criteria:

  • Are 65 years of age or older;
  • Have been receiving Social Security Disability benefits for at least twenty-four (24) months; or
  • Are suffering from end-stage renal disease, Lou Gehrig’s disease or other compassionate allowance condition.

Determining the Amount of a Medicare Set-Aside

The Medicare Set-Aside amount is formulated by consideration and analysis of the following:

  • Date of injury and nature of injury
  • Future Medicare-covered medical needs
  • Rated age of the Claimant and life expectancy
  • Review of medical payment history
  • Pharmacy review
  • Medical diagnosis and prognosis
  • Medicare coverage limitations
  • Workers’ compensation fee schedule prices
  • Average wholesale prescription prices

The MSA and ancillary services provided by Gordon & Rees include:

  • Initial MSA consultation
  • Workers’ Compensation MSAs (WCMSA) and Liability MSA (LMSA) preparation
  • Advice on MSA funding (lump sum versus annuity)
  • WCMSA and LMSA updates
  • Rush MSA preparation
  • Obtaining Medicare approval of MSA proposals
  • Negotiation of approval with Medicare
  • Re-review and Amended Review services
  • Social Security Verifications
  • Medical Cost Projections (MCP)
  • MCP updates