Q&A: Source of Funds for a Medicare Set Aside

Question: Is there any reason why I should not advance my client's money to open an MSA account? I am going to make an advance against the tort settlement for the money needed to be set aside in the MSA account. In other words, is it OK for the money source be an attorney advance against the proceeds from third-party settlement, or does the source have to actually be from the actual third-party settlement funds?

Answer: The Centers for Medicare & Medicaid Services (CMS) has not issued any guidance about the source of funds for an MSA. Remember that the most important thing is that Medicare remains as the payer of last resort for future injury-related care. So long as that occurs, then the source of the funds to pay those bills instead of CMS is irrelevant. Thus, the dollars for the MSA do not have to come from the actual settlement proceeds themselves, but could come from other means.