A Medicare set-aside is an allocation of settlement funds reserved to pay for future medical treatment related to the injury that would otherwise be billed to Medicare. It is used to satisfy the obligation to protect Medicare's interests as a secondary payer.
In workers' compensation, CMS operates a voluntary review process with defined thresholds. In liability settlements, there is no formal CMS review program, and parties address future interests through allocation reports, professional administration, or documented reasoning about why a set-aside is unnecessary.
Alternative Names:
MSA, Workers Compensation Medicare Set-Aside, WCMSA
Why it Matters?
Failure to consider Medicare's interests can expose both the claimant and the settling defendant to recovery actions and can jeopardize the claimant's future Medicare eligibility for the injury. In catastrophic injury and workers' compensation resolutions, set-aside analysis materially affects the funding required to close a file and is a common cause of settlement delay.
Frequently Confused with
Related terms
Frequently asked questions
Is a Medicare set-aside required in every settlement?
Does CMS review liability set-asides?
What happens if Medicare's interests are ignored?
