Question: I have a set-aside from a workers' comp injury and don’t quite understand all the rules. I recently was in an accident and re-injured myself. I need to have surgery in the same area from the previous injury. Because of this I won’t need to use my set-aside money because the other person’s insurance company has to pay for my new injury and surgery. If I don’t ever have to use the set-aside money who gets to use it?
Answer: The world of Medicare Set-Asides can be very complex; however you are correct in your assumption that since your new injury is the result of a third party injury, your MSA is not responsible for payment of any claims resulting from this injury. With that being said, your inquiry as to what happens to the funds that are currently in your MSA should you not use them is very valid.
Previously, The Centers for Medicare and Medicaid Services (CMS) allowed for a 25% reduction of the total dollar amount of the MSA should a claimant's condition improve after 5 years (CMS memo dated July 11, 2005), but in the August 25, 2008 CMS memo, they have rescinded that decision and require that the MSA fulfill the original requirements regarding the dollar amount assigned and the life expectancy of the claimant. This means your funding must stay intact and cannot be reduced.
-Karen Sanning
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