Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA)
WCMSA is an arrangement in which a portion of a workers’ compensation settlement is set aside to pay for future medical expenses related to an injury that would otherwise be covered by Medicare.
Under this arrangement, Medicare does not pay for medical expenses covered by your workers’ compensation settlement. WCMSA is a requirement by the Medicare Secondary Payer (MSP) statute for workers’ compensation cases where the settlement amount exceeds a certain threshold.
Why Is WCMSA Important?
WCMSA is important because it protects both Medicare’s interests and your own. By allocating a portion of your settlement for future medical expenses, you avoid legal issues and can meet potential medical needs without depending on Medicare. If Medicare does pay for medical expenses related to your workers’ compensation injury, it can seek reimbursement from your settlement, reducing your settlement amount.
Who Needs a WCMSA?
Not everyone who receives a workers’ compensation settlement will need a WCMSA. Typically, a WCMSA is required if you are a Medicare beneficiary or expect to become one within 30 months of your settlement and your settlement exceeds $250,000. Individuals with certain severe medical conditions or extensive treatment histories may also be required to establish a WCMSA, irrespective of the settlement amount.
How Is a WCMSA Calculated?
Calculating a WCMSA involves several factors, such as the nature of your injury, the cost of future medical treatment, and Medicare coverage policies. A professional evaluator will review your case, consider your medical history, and project your future medical costs to determine the appropriate amount to set aside. This amount is then submitted to the Centers for Medicare and Medicaid Services (CMS) for approval.
The Role of CMS in WCMSA
The Centers for Medicare & Medicaid Services (CMS) play a crucial role in WCMSA. CMS reviews and approves the proposed set-aside amount, provided it adequately covers your future medical expenses. This approval process prevents disputes about Medicare’s responsibility for your medical costs.
CMS guidelines and resources help you and your legal team estimate the future medical costs of your injury. Their involvement ensures that your WCMSA complies with federal regulations and protects Medicare's interests.
Submitting a WCMSA Proposal
A WCMSA proposal must include relevant medical documentation and a detailed explanation of the proposed set-aside amount. It must also include evidence of projected future medical costs, such as physician statements and medical invoices, to justify the set-aside amount. This documentation helps CMS understand your medical needs and ensures the proposed amount is adequate.
Common Mistakes in WCMSA
Errors in calculating or submitting a WCMSA can lead to delays, rejections, or even legal issues. Common mistakes include:
Underestimating future medical costs
Failing to provide complete medical documentation
Not adhering to CMS guidelines
Failing to allocate enough funds for unforeseen complications
Neglecting to update the proposal with recent medical developments
What Happens After WCMSA Approval?
Once CMS approves your WCMSA, the set-aside amount must be placed in a separate account that is used exclusively for related medical expenses. You must keep detailed records of all expenditures from this account and provide annual reports to CMS. Proper management of this account is necessary to comply with CMS requirements.
How to Use WCMSA Funds
WCMSA funds should be used in compliance with CMS guidelines. They should only be used for medical expenses related to your workers’ compensation injury that would otherwise be covered by Medicare. Misuse can lead to penalties and jeopardize your Medicare benefits.
WCMSA Laws in California
California has several laws and regulations governing workers’ compensation and WCMSA. Here are a couple of important points:
California employers must provide necessary medical treatment for work-related injuries, and the WCMSA must reflect these requirements.
The set-aside amount adequately covers the estimated costs of future medical care. Any disputes regarding the adequacy of the WCMSA are addressed through the state’s workers’ compensation appeals board, to comply with state and federal regulations.
Common Questions About WCMSA
Q: What happens if my WCMSA runs out of money?
A: If your WCMSA funds are exhausted and properly accounted for, Medicare will resume covering your related medical expenses.
Q: Can I use WCMSA funds for non-medical expenses?
A: WCMSA funds must be used exclusively for medical expenses related to your workers’ compensation injury.
Q: How often do I need to report WCMSA expenditures to CMS?
A: Annual reporting is required to maintain compliance with CMS guidelines.
Q: What should I do if my medical needs change significantly after my WCMSA is approved?
A: In this case, you should notify CMS and your legal representative and submit additional documentation to adjust the WCMSA.
Q: Is interest earned on WCMSA funds taxable?
A: Any interest earned on WCMSA funds must be added to the account and used for the same medical purposes. Typically, it is not taxable if used appropriately, and in accordance with CMS guidelines.
Q: Can I administer my WCMSA myself, or do I need a professional administrator?
A: You can administer your WCMSA yourself, but many people choose to hire a professional administrator to ensure compliance with CMS requirements and to manage funds effectively.
Speak With a Workers’ Compensation and Appeals Attorney in Oakland, California
The Law Office of Robert E. Wood offers extensive experience and a collaborative approach to help clients with their workers’ compensation claims. We are known for our knowledge, friendliness, diligence, and realistic solutions.
Whether you're looking to understand your benefits or need help appealing a denied claim, we will advocate for you. We offer services for both state and federal workers’ compensation and disability law, for clients in Oakland, California, and the San Francisco Bay Area. If you have questions or need assistance with your WCMSA, reach out to The Law Office of Robert E. Wood.