MSA Questions from the Claimant Perspective

The MSA question when it comes to motor vehicle accidents (and other type of claims brought under an automobile policy or a liability insurance policy today) is one that is the subject of much discussion. On the one hand, you would have people taking a very aggressive approach and saying that there is no need to do anything since the federal government (through the Centers for Medicare and Medicaid Services [CMS]) has not yet issued final rules and regulations providing the country with its official statutory interpretation. On the other hand, you will have some entities (typically defendants and/or insurance carriers) who see that CMS officials currently believe that its rights to such Medicare Set Asides (MSAs) currently exist in auto and liability insurance claims just as it does in workers’ compensation claims (where funding MSAs has been standard operating procedure for almost 15 years) and mandate that an MSA is funded as part of every auto or liability insurance claim being resolved.

We believe that an approach somewhere in the middle makes the most sense. If you:

1. determine if an MSA is needed to best protect your future Medicare benefits,
2. the proper amount with which to fund the MSA, and
3. have rationale supporting your conclusion, then you will have done what is sufficient today to protect your future Medicare benefits.

Common questions asked by claimants:

1. Who sets up the MSA? The MSA should be set up by the injured person. It can either take the form of a self-administered MSA or an MSA administered by a professional custodian.
2. Does Medicare approve the amount established by your attorney? Medicare (aka CMS) does not have a formal review process for MSAs in auto or liability insurance claims at the present time. While it might be possible to ask Medicare to review and approve your MSA figure, that should not necessarily be the ultimate goal.
3. Should I have a copy of how the amount was determined? Yes, you should have a copy of the report detailing the methodology behind how the MSA analysis was conducted and how the MSA figure was derived.
4. How does one avoid future problems with Medicare claims? As detailed above, by determining if an MSA is needed (and proper dollar amount if appropriate) and then following that guidance, you would be taking the proper steps to avoid future problems with Medicare.
5. Should Medicare approve amount set aside prior to me settling the case? Due to the lack of an official review and approval process for these types of cases, CMS review and approval should not necessarily be expected. While you should conduct the MSA analysis and arrive at your conclusions prior to settling the case, CMS review and approval is not necessary.