A Medicare Set Aside Allocation as a simple concept is an accurate projection of the lifetime future medical costs associated with a claim, that are anticipated to be Medicare covered services. It is a cost projection that goes the additional step to include a separate description and "allocation" of those services that would traditionally be covered by Medicare if there was not another funding source available. Those costs are “set side” from the "settlement" for future medical in an effort to protect Medicare’s interest.

All parties in a Workers' Compensation (WC) case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare's interests when resolving Workers’ Compensation cases that include future medical expenses. The recommended method to protect Medicare's interests is a Workers' Compensation Medicare Set Aside Arrangement (WCMSA), which allocates a portion of the WC settlement for future medical expenses. The amount of the set aside is determined on a case-by-case basis and should be reviewed by CMS, when appropriate. Once the CMS approved set aside amount is exhausted and accurately accounted for to CMS, Medicare will agree to pay primary for future Medicare covered expenses related to the Workers Compensation injury.

According to the Centers for Medicare and Medicaid Services' July 11, 2001 Policy Memorandum and subsequent FAQs posted since then, CMS requires that certain Workers' Compensation settlements, those seeking to limit or close future medical benefits with a qualified claimant, obtain CMS Regional Office approval of the settlement and MSA Allocation. An MSA Allocation is simply an accurate projection of the lifetime future medical costs covered by Medicare. Qualified claimants are often referred to as Class I and Class II claimants or beneficiaries and are determined as follows:

CLASS I
Any claimant who is currently Medicare eligible and the total settlement value is greater than $25,000.

CLASS II
Any claimant who has a reasonable expectation of Medicare enrollment in 30 months or less and the total settlement value is greater than $250,000.

The formation of a Medicare Set Aside Arrangement is a complex and challenging issue to deal with. Inexperience and mishandling leads to increased settlement costs, inappropriate Medicare Set Aside allocation amounts, and significant time delays when obtaining approval from Medicare. Let us assist with the many components and intricacies of settling a Workers' Compensation claim. You can rely on our experience to help protect your interests.