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Definition Workers Compensation Medicare Set-aside Arrangements


Workers Compensation Medicare Set-aside Agreements Explained

Benefits for Workers Compensation Medicare expenses must be protected for the CMS. It is the responsibility of all parties to protect Medicare’s interests when resolving cases with future medical expenses. Forecasting future Workers Compensation medical benefits can be very complicated.

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The recommended method for doing this is a MSA, which allocates a portion of the settlement for future medical expenses. The amount of the set aside is determined on a case-by-case basis and is mandated to be reviewed by the Centers for Medicare and Medicaid Service (CMS) when appropriate. Once the CMS determined amount is exhausted and properly accounted for to CMS, then Medicare/Medicaid will agree to be the primary payer for future Medicare covered expenses related to the injury.

Evidence has shown that there are five key factors organizations should be focused on in 2009 and 2010 to settle and manage these cases.

• Continuous review of their cases to establish MSA thresholds for minimizing risks and maximizing compliance.

• Reserves should be carefully reviewed and benchmarked on a case-by-case basis to be certain they are optimal and segmented to each area of future expense.

Drawing Graphic of Business Strategy Workers Compensation Medicare Concept

• Retention of an experienced team of multi-disciplinary medical, financial, claim, and legal resources with significant experience in settling high value cases.

• A “Zero Approval” goal for each case by removing co-morbidity factors, and only relating the subject injury to the proximate cause.

• Service quality and technology dedicated to carefully managing and ensuring excellence throughout the process.

While many organizations have qualified representatives who are capable of managing the smaller cases, only a few have the dedicated resources to focus on the complex laws and regulations surrounding MSA’s.

The CMS is continually changing their rules and opinions, and it requires a consistent team of practice professionals to provide organization and clarity for each case. With this team, the organization can be assured of a careful and thoughtful approach which will receive final approvals and future certainty for the cases.

The CMS had produced a memo earlier this year that changed the rules on MSA’s. If your company has not heard of MSA’s from your carrier or Third Party Administrator (TPA) and you have had serious claims in the last 10 years, you may want to start inquiring NOW.

PLEASE NOTE THAT IF YOU SELF INSURE OR HAVE A HIGH DEDUCTIBLE PROGRAM – YOU AS THE EMPLOYER AND NOT THE TPA BEARS THE RESPONSIBILITY OF REPORTING THIS INFO PROPERLY TO THE CMS. With so many government funding shortfalls, this is an area where the Federal Government is going to increase their enforcement.

Next Up – The New CMS Memo

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Is Social Security Disability Affected by WC?

Social Security Disability and Workers Comp Study Does Workers Compensation have an effect on Social Security Disability?  More precisely, do Social Security Disability applications increase

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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