Medicare Set-Aside Specifics

Question: I had the pleasure of listening to your presentation with regard to Medicare Set-Asides last August in Montana. In follow up, I would appreciate a few minutes of your time to respond to the following questions.

We are negotiating settlement of a client’s future medical benefit entitlement relative to a work comp claim. A set-aside has been calculated and approved through CMS, with funds reserved specifically for conservative treatment to include prescription drugs, follow appointments with the treating physician, etc. The set-aside amount was calculated with use of a WC fee schedule (for provider care) and wholesale pricing (for pharmaceuticals). The set-aside provisions specify that expenses are to be paid in accordance with the fee schedule and wholesale pricing used to calculate the set-aside amount. As the basis for our dispute, the necessity of a particular (and costly) medical procedure is at issue.

My questions are as follows:

1. If our client self-administers his set-aside account, how does he pay medical expenses based on fee scheduled or wholesale prices if billed at “retail” prices for expenses incurred?; and
2. If the medical procedure at issue is determined to be necessary by a treating physician post-settlement, will Medicare pick up the cost as they have signed off on they have signed off on the set-aside and the procedure was not considered in the assessment of future treatment (Medicare has approved payment for such procedures)?

I understand you are extremely busy, and I appreciate any insight you can provide us into these issues. Thank you for your time, and I hope all is well.

Montana Attorney

Answer: Your questions are ones we are asked on a regular basis. Both are very good questions. My response to both follows:

If your client chooses to self-administer his MSA, to ensure that he receives the benefit of paying only the appropriate workers compensation fee schedule amounts, we recommend that he directs his providers to the section of the CMS approval document which specifically states: The proposed settlement agreement provides for future medical expenses to be paid based on the workers’ compensation fee schedule for the state of Montana. Therefore, the WCMSA is approved to pay providers, physicians and suppliers based on the workers compensation fee schedule in effect for this state for future medical expenses that would otherwise be reimbursable by Medicare. (This statement is usually found on page 3 and the second paragraph). We recommend that your client contact his providers to address this situation prior to receiving treatment to avoid any confusion. Usually providers abide by the CMS document and welcome the payment at time of service. Obtaining the fee schedule can usually be done by contacting the state of jurisdiction worker’s compensation office, via internet or even asking the provider.

The issue of obtaining prescription medications at the worker’s compensation rate may prove to be more difficult. Usually pharmacies are not as willing to bargain regarding price, so it may take some effort of your client’s part to be able to achieve this. Networking with a cost-containment company would prove beneficial should they run into problems in this area.

Your question regarding a procedure which is determined to be medically necessary by the provider - but was not included in the MSA allocation - and its ability to be paid for by the MSA is a great question. When the allocation was prepared, it is simply a “snapshot in time” of anticipated injury related medical care. If an unexpected infection, delayed wound closure or some unforeseen condition should develop, as long as it is determined to be injury related and a Medicare approved service, it can be paid for by the MSA. Usually a note from the provider relating this service to the injury provides enough documentation in the eyes of CMS.

I hope that you found my answers informative, but should you have any additional questions, please feel free to contact me again.