Synergy logo

(844) 857-0357

Partner With Synergy – Free Your Firm To Focus On What It Does Best™

Close this search box.


Accounting Records

The administrator must maintain accurate records of the distributions and expenditures from the Medicare set aside account. The records should indicate the date of service, the diagnosis, the service received, who received payment and the date of the payment. The administrator may also want to keep a receipt or other evidence of each and every payment made from the Medicare set aside Account. When self-administering the MSA, using a debit card from a segregated account is an easy way to keep accurate accounting. Anytime the injury victim goes to treat with a provider, they simply use the debit card to pay for the qualified medical expense. If the account balance ever gets down to zero, all they need to do is print out and mail the bank statement to Medicare with their receipts.

Administration of Medicare Set Aside

The Centers for Medicare and Medicaid Services allows your MSA account to be administered in any of the following ways:

  • Self-administered account
  • Custodial account
  • Medicare Set Aside Trust account
  • Medicare Set Aside/Pooled Special Needs Trust

Annual & Final Accountings

The injury victim shall submit a final accounting ledger within 60 days of the MSA funds being depleted. The annual and final accounting will include evidence of every payment made from the Medicare set aside account. For liability MSAs, the accounting only has to be done upon the account balance reaching zero. In worker’s compensation cases, there are annual reporting requirements. The purpose of these account filings is for Medicare to confirm the MSA funds have been spent appropriately.

Once an MSA account has been completely exhausted and assuming the funds have been spent properly, the plaintiff has met their obligation to protect Medicare’s interests. They can then start to submit bills to Medicare again. At that time, the plaintiff should send a final attestation to Medicare as proof the funds were spent appropriately. The current address for sending final accounting on MSA accounts is:

Medicare Secondary Payer Recovery Contractor

Attention: MSP-Medicare Set Aside Reconciliation (NGHP)

P.O. Box 138832

Oklahoma City, OK 73113


This is the annual filing with CMS to show them how much money has been spent in the account.

Billing Rates

The MSA allocation is either prepared based on the usual and customary fee schedule or on the state’s worker’s compensation fee schedule, depending on the type of case. In the real world, doctors have the freedom to charge whatever rates they desire. The MSA will not enjoy paying Medicare rates.

Centers for Medicare and Medicaid Services (CMS)

The federal agency that oversees the administration of Medicare, Medicaid, and the Children’s Health Insurance Program. As such, the agency is charged with managing the mandatory reporting requirements that have been imposed via the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) on an entity providing any sort of monetary compensation to a Medicare-eligible individual resulting from a workers compensation, general liability, or automobile no-fault claim.

Class I Beneficiary

A plaintiff is a Class I beneficiary if Medicare eligible at the time of settlement.

Class II Beneficiary

A plaintiff is a Class II beneficiary if there is “Reasonable Expectation” that the claimant will be Medicare eligible within 30 months of the date of settlement and the value of the settlement is $250,000 or more.


Person making (filing) a formal demand for a payment or asserting a right (such as the ownership of a property). Also known as plaintiff.

Custodial Account

Professional administration by a custodial company to manage the MSA funds for the injury victim.

Delivery of Notices & Accountings

For worker’s compensation cases, the annual self-attestation should continue through depletion of the account. It is important that the administrator understands and complies with this requirement. The self-attestation letter must be signed and forwarded to CMS’ Medicare contractor no later than 30 days after the end of each year (beginning one year from establishment of the MSA account).


For all individuals applying for disability benefits under title II, and for adults applying under title XVI, the definition of disability is the same. The law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

Distributions Following Death of Beneficiary

In the event that the beneficiary dies before the funds in the Medicare set aside account are depleted, the MSA account should remain open for 180 days from the date of plaintiff’s death to enable any outstanding bills for medical expenses incurred as a result of the incident that would otherwise be covered by Medicare to be paid. After the 180 days has elapsed, any funds remaining in the Medicare set aside account are payable to the claimant’s estate or proper payment subject to the appropriate State probate laws.

Dual Eligible

Dual eligible beneficiaries include individuals who receive full Medicaid benefits as well as those who receive assistance with Medicare. Medicare is the primary payer for most services, but Medicaid covers benefits not offered by Medicare. In certain cases, a Medicare set-aside/special needs trust or pooled trust sub-account may be necessary to preserve the client’s dual eligibility. Medicare set-asides (MSAs) are devices used to preserve future Medicare eligibility. In an abundance of caution, it may be prudent to consider setting one up when the injury victim is a Medicare beneficiary or reasonably expected to become Medicare eligible within 30 months. A special needs trust (SNT) or pooled special needs trust is appropriate for clients receiving Supplemental Security Income (SSI) or Medicaid benefits, or both. Federal law allows the creation of either an SNT or a pooled trust to preserve eligibility for needs-based benefits, such as SSI and Medicaid, after settlement of a personal injury claim.


Medicare is a federal health insurance program that provides benefits based on age or disability. It is an entitlement and is not income or asset sensitive.

Medicare Set Aside

An amount of money related to future medical expenses that must be reserved from an employee benefits, workers compensation, or liability claim settlement that involves a Medicare-eligible claimant. The purpose of the set-aside is to protect Medicare from paying for medical benefits that should have been funded by the party responsible for causing the injury. Although applicable to general liability and automobile no-fault claims, the set-aside is most commonly a factor in workers compensation claim settlements.

Medicare Set Aside Account

The Medicare set aside funds must be placed in an interest-bearing checking or savings account. All interest earned on the Medicare set aside account has to be used solely for medical expenses from the accident/incident that would otherwise be covered by Medicare.

Medicare Secondary Payer

Under federal law, Medicare is only secondarily responsible for paying medical expenses for individuals covered by Medicare who are also covered by any type of private insurance. An example of how this concept applies is in the context of workers compensation claims. The medical expenses of a Medicare-eligible injured worker should be paid by the workers compensation insurer or self-insurer as the primary payer, with Medicare serving as the back-up or secondary payer of the medical expenses.

MSA Trust Agreement (MSAT)

An MSAT is a formal trust agreement administered by a corporate trustee typically paired with a professional Medicare Set Aside administrator. With an MSAT, you get a trustee that has a fiduciary duty paired with a set aside administrator who can handle the intricacies of managing set aside funds and reporting to CMS. If the trustee or administrator can no longer perform their duties, a new trustee or administrator may be appointed but the fiduciary obligations and creditor protections of the trust remain. Trusts are covered by state trust and fiduciary laws.

Misappropriated Set Aside Account Funds

If the final accounting reveals that funds in the account were used to pay for items other than qualified medical expenses related to the accident, CMS may withhold Medicare coverage until the misappropriated amount is replenished and spent on injury related Medicare covered services. For example, if the plaintiff purchased a hot tub with funds from their MSA account, they would have to replenish their account with an amount equal to what was improperly used and then spend that money on injury related Medicare services before Medicare would cover future injury related treatment.

Reimbursement to Medicare

In the event CMS determines that Medicare has paid benefits prior to the depletion of funds in the Medicare set aside account, CMS, or its designated fiscal intermediary or carrier, shall have the right to seek and receive reimbursement of any such conditional payments or overpayments from the Medicare set aside Account to the extent that there are funds remaining in the account at that time. This situation can potentially arise if the medical providers bill Medicare for treatment related to the accident after the case has resolved but prior to the settlement funds being dispersed.

Responsible Reporting Entity (RRE)

The party that is responsible for funding a claim payment to an individual eligible for Medicare benefits is considered the Responsible Reporting Entity (RRE) under the provisions of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007. The RRE must register with the Centers for Medicare and Medicaid Services (CMS) and report electronically all claims and claim payments related to any workers compensation, general liability, or automobile no-fault claim where the claimant is also entitled to Medicare benefits.

Self-Administered Account

The injury victim manages and administers the MSA account themselves, including bill review, bill pay, record keeping and dealing with Medicare.

Withdrawals and Usage of the Funds

The funds in the Medicare set aside account must be used solely for legitimate medical expenses incurred for those medical needs related to or resulting from the injuries suffered, which would otherwise be reimbursable or paid for by Medicare. Funds in the Medicare set aside Account may not be used to pay for non-Medicare covered medical services. For a list of services not covered by Medicare, a copy of the booklet, “Medicare & You” can be obtained from the local Social Security office or by using the following link:

The best gauge for determining what is covered by Medicare is the Medicare set aside analysis that was completed by the independent company or MSA specialist. If there are any questions concerning what Medicare covers, the plaintiff can also call l-800-MEDICARE. The plaintiff may also use the MSA account to pay for the following costs that are directly related to the MSA account: document copying charges, mailing fees/postage fees, any banking fees related to the account and income tax on interest income from the set aside account (Ref: WCMA Reference Guide 2013).

Sources: IRMI, CMS website, Medicare website, WCMSA Self-Administration Toolkit




The Synergy Settlements team will work diligently to ensure your case gets the attention it deserves. Contact one of our legal experts and get a professional review of your case today.

Synergy Insight

Stay up-to-date with the settlement services industry’s foremost thought leadership by subscribing to our blog.
blog subscription buttonSubscribe