MSA funds are placed into an interest-bearing account. The account may have a linked debit card, or the account holder may withdraw funds for reimbursement for expenses related to the settlement. For any expense, the account holder must keep detailed records and receipts. DataPath is an end-to-end card processor with over a decade of experience providing card-based payment solutions. If you are still not convinced that you need our help, test your knowledge by taking this MSA Quiz.
Consequences If your MSA Account is not handled properly or if you pay more than the approved Medicare Set-aside price for any items, or pay for non-allowable expenses out of the account, the consequences include:. When an injury settlement is made, the intention is for the money to cover the injured person's medical needs for their lifetime. If the money does run out, Medicare will step in and help, but only if the MSA Account has been in compliance with every rule and regulation that Medicare has including spending, record keeping and reporting.
It is very easy to jeopardize your future Medicare eligibility for your injury. About MSA Accounts. Medicare Set-aside Requirements Medicare Set-aside Accounts have very complicated rules for staying in compliance with Federal reporting requirements. Typically, a judge must approve the fees. To learn more, see our article on how much lawyers charge in workers' comp cases. States may also have guidelines on which parts of the award or settlement count for purposes of calculating the fee.
In some states, the lawyer may take a percentage of your total award. Other states allow attorneys' fees only on portions of the award, such as the amount of compensation that was in dispute or unpaid benefits that are owed at the time of the award or settlement.
You'll also have to reimburse any payments your lawyer has advanced for expenses like copying medical records, hiring expert witnesses, and hiring court reporters to transcribe depositions. Typically, lawyers will deduct these costs before attorneys' fees are calculated. However, some attorneys calculate their contingency fee based on the total award, before costs. Be sure to check the details in the fee agreement you signed with your lawyer.
If your workers' comp claim was denied and you win on appeal, the judge may order the insurance company to pay your medical bills. This will be an extra item in your award. If you paid your own medical bills, you can keep the money in the award that's earmarked for those costs. However, if your doctors agreed to postpone payment until you received a workers' comp award this is called a "doctor's lien" , the money will go to paying those outstanding bills.
Sometimes, you lawyer may negotiate a settlement that requires the insurance company to paid specific medical bills directly.
More often, however, the settlement will simply include a lump sum for medical bills. Your lawyer will usually withhold a portion of the settlement to resolve the unpaid bills—but may be able to negotiate with your medical providers to get those bills lowered. That way, you can keep more of your settlement.
Under federal law, Medicare won't pay for medical expenses that are covered under workers' compensation, but it may pay medical bills conditionally when there's a dispute about workers' comp liability. So if you're eligible for Medicare, part of your settlement may go to the government. First, you must repay Medicare for conditional payments it made during your appeal.
Second, if your settlement includes any money for future medical expenses unless the insurance company has agreed to pay all of those expenses directly , you need to make sure that Medicare's financial interests are protected. In most cases, you'll do this by putting part of the settlement funds in a Medicare Set-Aside Account MSA , which will go to pay for future medical treatment related to your work injury.
There's no law requiring you to get approval from Medicare for the amount in your MSA, but doing so has a big advantage: Medicare will pay any medical expenses for your work injury once you've used up the approved amount in your MSA. Medicare will only review and approve your MSA if:. Even if you don't meet those thresholds which the government could change , you will still need to set up an MSA except in rare situations where it's clear that Medicare's interests are protected.
If you don't set up an MSA, Medicare may decide that your entire settlement was for future medical costs and refuse to pay your medical bills until you prove that you spent all of the settlement money on treatment for your work injury.
When you have an MSA, you must put its funds in a separate, interest-bearing account. You also must follow specific rules about recordkeeping and fund administration.
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