MSA, Not MESS (Medicare Set Asides in Workers’ Compensation Cases)

piggy bank, money, calculator, and stethoscope

Acronyms are part of daily life for most of us. GPS, PDF, JPEG, and GIF are just a few of the common ones we see regularly.

If you, like most people, get anxious over the increasing number of acronyms used, then workers’ compensation is no place to be. As I’ve written in past blogs, workers’ comp utilizes AWW (average weekly wage), PPD (permanent partial disability), and TTD (temporary total disability) — to say nothing of IME (independent medical examination), UR (utilization review), MMI (maximum medical improvement), and FCE (functional capacity exam). And I’m just getting started.

MSA — Medicare Set Aside

Without getting into the weeds too deeply, a Medicare Set Aside, or MSA, is used in some workers’ compensation cases. Generally, an MSA reserves money that will likely be spent on future medical care for the injured worker after the case is settled. It should apply to any injured worker who is 62.5 years of age or over or is already receiving Medicare benefits.

Since Medicare has a right to be reimbursed for any medical amounts it paid for the injury that was the subject of the workers’ compensation case, a statistical analysis is performed to determine exactly what amount should be reserved, right down to the cost of each ibuprofen, injection, ice pack, and future surgery.

In theory, this makes sense. A worker who falls off a truck at age 63 and is already receiving Medicare benefits may sustain a fractured wrist that does not need surgery. In that case, an MSA may not be necessary, if her doctors determine she is unlikely to need future medical care related to the wrist.

However, what about the worker of the same age who does require surgery and does not regain full use of the hand and arm? Most likely, an MSA will be necessary. When an MSA is required, it must be funded by the employer/employer’s workers’ compensation insurer.

How It All (Should) Work

In addition to any lump sum permanency settlement, the worker also receives an MSA, calculated to the penny and based upon future care that may be required. Take our worker with the fractured wrist who had surgery and has permanent difficulty. If her doctor opined that she would likely require one more surgery to remove the hardware, perhaps ten physical therapy appointments thereafter, plus some medication for occasional pain relief, whatever amount that all adds up to (as calculated by what Medicare would likely pay), must be set aside in a separate account (MSA).

The worker must keep a log of every penny spent on any medical expenses related to that body part/injury and draws money from the MSA fund in order to pay those costs. If the worker dies before the MSA is used up, the money goes to the surviving spouse or other designated relative.

Confused yet?

Wait, it gets worse.

Ralph’s Case

I became involved in Ralph’s case way back in 2016, after it was referred to me by a lawyer who does not handle workers’ compensation. Ralph was a Medicare beneficiary when he slipped in the parking lot of his workplace and fractured a lumbar vertebrae (bone in the lower back) in January of 2015.

Things got complicated because Ralph had a number of back problems that could not be specifically related to the fall and the fracture. His own doctor opined that many of the problems he was having were degenerative and long-standing. It was next to impossible to determine what back pain was caused by the fall and what back pain was caused by wear and tear during Ralph’s lifetime.

First, we had to get the case settled. His own doctor had determined he was at MMI (maximum medical improvement) back in September of 2015. Unfortunately, he continued receiving pain-killing injections multiple times through 2019. When we finally were able to settle his case, we compromised and got as much money as possible for his injuries related to the fall, while conceding that we could not prove that all of his present problems were related to the accident. That was the “easy” part.

Determining the amount of the MSA was also relatively easy, since the analyst merely looked at what would be expected for that type of injury. The difficult part is what is sure to occur from here on out. That is, Ralph will continue seeing his doctor to keep his back pain under control. In theory, Medicare will cover whatever happens when he receives medical treatment.

The problem will be what percentage of that care Medicare deems related to his fall and what part it determines is not part of his fall. We also fear that since Medicare was not paying bills for quite some time while workers’ compensation was paying (at least until the MMI date), Medicare may reflexively deny payments for future services without understanding the entire scenario. Ralph has already contacted me once about this occurring.

WWKD (What Would Kafka Do)?

One of the eternal images many of us have depicts a byzantine governmental bureaucracy that is impenetrable to the common person. Surely, anyone who has read any angst-ridden books by the late writer Franz Kafka, such as The Trial, can see how one could seemingly go around in circles trying to comply with obscure regulations, only to find it impossible to do so.

Unfortunately, while workers’ compensation settlement contracts and the MSA can be drafted to be very specific, there is no surefire way to ensure that Medicare (let alone the local doctor’s office) actually reads and understands these documents. Doctor’s offices can (hopefully) code services a specific way to avoid this happening. For example, it is obvious that a knee surgery is different from a wrist procedure. But what about Ralph and his achy back, some of which is related to the fall and some of which isn’t?

Good luck keeping that straight with Medicare!

This is how things work when you have a lawyer looking out for your interests. Imagine what happens without one.

Contact Chicago Workers’ Compensation Lawyer Stephen Hoffman

If you’re injured at work and have questions, contact Chicago workers’ compensation attorney Stephen L. Hoffman for a free consultation at (773) 944-9737. Stephen has nearly 30 years of legal experience and has collected millions of dollars for his clients. He is listed as a SuperLawyer, has a 10.0 rating on Avvo, and is BBB A+ accredited. He is also an Executive Level Member of the Lincoln Square Ravenswood Chamber of Commerce.

Don’t wait another day, contact Stephen now.

Categories: Work Injuries