Synergy Blog

#1 | Since You Asked: Synergy’s Workers’ Compensation Medicare Secondary Payer Advice Column

July 28, 2021

Rasa Fumagalli JD, MSCC, CMSP-F

Introducing “Since You Asked,” Synergy’s first in a series of columns addressing MSP compliance questions in the area of workers’ compensation.


“My client is settling her case and does not know what to do with her Workers’ Compensation Medicare Set-Aside (WCMSA) funds. I’m not quite sure what to tell her. Can you help?”

Proper administration of the WCMSA funds is vital in order to ensure that Medicare will become the primary payer once the WCMSA account is depleted. Because of this, the Centers for Medicare & Medicaid Services (CMS) highly recommends the use of a professional administrator for the funds. In addition, when the WCMSA includes opioids and other “frequently abused drugs”, CMS expects the administration of the funds to be in accordance with CMS’ Part D Drug Utilization Review (DUR) policy.  (WCMSA Reference Guide, Version 3.3, 4/19/2021, Section 17 et al).

If your client would prefer to self-administer her WCMSA account, CMS allows for this as long as she is competent. When your client receives the WCMSA funds, she should deposit the funds in a separate interest-bearing checking account that is insured by the Federal Deposit Insurance Corporation (FDIC). The funds should only be used to pay for injury-related Medicare-covered services even if your client is not yet enrolled in Medicare.  The funds may also be used to pay for certain costs that are directly related to the WCMSA account. These consist of costs associated with copying documents, mailing fees/postage, banking fees related to the account, and income tax on interest income from the account. The WCMSA funds may not be used to pay for the following: fees for professionals hired to administer the account, any other expenses for administration of the account, attorney costs for establishing the WCMSA, and Medicare co-payments, deductibles, or premiums.

Record keeping is an important part of the proper administration of the WCMSA. Your client should record all of the transactions with the account and keep itemized receipts for each payment that is made from the account. An annual attestation of the appropriate use of the funds should be sent to Medicare’s Benefits Coordination & Recovery Center. Once the WCMSA account is fully depleted, your client should notify the BCRC of the complete exhaustion so that Medicare may become primary.   CMS has issued a  helpful Self-Administration Toolkit for WCMSAs that details the self-administration process and provides sample documents and letters. The most recent version of the toolkit may be found here.

In the event that your client is also receiving a public income-based benefit, such as Medicaid, it may be appropriate to place the WCMSA in a Special Needs Trust. Synergy’s team of experts is available to guide you and your client through the administration and MSP compliance process.

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Panter, Panter & Sampedro

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Tom L. Copeland
Jeffrey Meldon & Associates, P.A.

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