We’ve all heard the stories of injured parties who settle their workers’ compensation case and become rich overnight. With little regard for the terms of their settlement, they’ll go out and buy furniture for their house, pay for their children’s college tuition, or make an impulse buy on something they otherwise could not afford before. They don’t remember or don’t know how to deal with the fact that part of their settlement consisted of Medicare Set-Aside (MSA) funds.It won’t be very long until their MSA funds have run out and they assume they are can still be covered by Medicare for the treatments and prescriptions for their injury only to find out they’re being denied their benefits.
An expert in the MSA administration could quickly pinpoint the reason for denial of Medicare benefits is because he or she misspent the funds on items that are not Medicare-covered or not related to the injury. Often times, the injured individual does not file their required annual reporting and, even if they did, they cannot properly account for where all the money went. Now the injured party is left without Medicare coverage and with no support.
The Benefits Coordination and Recovery Center (BCRC) is the contractor for the Centers for Medicare & Medicaid Services (“CMS” or otherwise “Medicare”) that reviews MSA reports and helps make determinations on when/what Medicare should cover going forward. The BCRC keeps a record of where all the MSA money goes and determines if the expenses reported were an appropriate use of the MSA. If the funds are all used properly and reported properly to the BCRC, the BCRC will inform the division of Medicare that pays claims, the Medicare Administrative Contractors (MACs), to resume paying for bills for injury-related care after an MSA has been fully spent.
The BCRC has become much more active and technologically savvy over the last couple years in regard to the MSA annual reporting and tracking of MSA fund exhaustions for Medicare beneficiaries who have settled claims. The BCRC is using data they receive from insurance companies, deemed Responsible Reporting Entities (RREs), through their Mandatory Insurer Reporting Section 111 reporting process.*
As cases settle, insurance companies are mandated to share all the information on the individual’s injury and the terms of the settlement when it involves a Medicare beneficiary. This information is being shared with the BCRC, which in turn, relies upon it to inform the Medicare Administrative Contractors (MACs), who have systems in place to track it and apply rules in to the payment of bills. The data is refreshed each year with updates received in the annual MSA reports sent to the BCRC by injured parties.
What it boils down to is that Medicare knows the details of settlements and is actively tracking the use of MSA funds. When the MACs receive bills to pay after settlement, the BCRC is automatically informing them whether someone who got an MSA should have those bills paid for or not. The connection of these data sources makes it very unlikely for parties with MSA funds remaining, missing annual reports, or misspent MSA funds to slip through the cracks like they may have before the processes were tightened. The improved technology and access to information at CMS has increased their ability to identify cases that have settled with an MSA and deny coverage.
At Ametros, we’ve begun to receive more and more phone calls from the BCRC asking for information on individual members based on annual attestations. The BCRC is especially reviewing reports when the MSA funds run out, or are “exhausted.” In these situations, the BCRC needs to review the report to validate the funds were used properly and then inform the MACs to begin paying for bills. In other words, these are the situations where Medicare is now back on the hook as the primary payer. In addition to calls from Medicare, we’ve also been receiving more calls from individuals that are having their benefits denied. The statistics in the graphics above are what we have observed based on our interactions with CMS and our members.
It’s important to note that, with the combination of a structured settlement and administration, at Ametros, our members exhaust less than 4% of the time in a given year. This is because administration plays a great role in saving the injured individual money on each bill and the structured settlement provides a continual source of funding that protects them from quickly spending all the funds. Together the two services can provide great protection for the injured party. In the rare case that the funds do exhaust for a temporary period, the administrator will make sure Medicare is informed to step in.
Professional administration is at the forefront of ways you can assure 100% Medicare compliance after settlement when it comes to correctly managing your funds, and CMS highly recommends the use of a professional administrator.** Even if you settled your case long ago, it’s not too late to get help. We work with folks who originally chose to self-administer and we will help transition them to professional administration, where they can have control over their funds while remaining compliant with the rules set forth by Medicare.