The Medicare Secondary Payor Act (MSPA) allows Medicare to forego paying for injury-related medical services until all settlement or lawsuit funds have been properly exhausted in workers compensation settlements among Medicare-eligible plaintiffs. However, plaintiff misallocation or mismanagement of settlement funds when self-administering accounts has caused the Centers for Medicare & Medicaid Services (CMS) to step-in to cover medical expenses prematurely.
Recently, CMS has doubled down on monitoring and standardizing required reporting from worker’s compensation plaintiffs; and, CMS has begun denying medical claims where there is reason to believe the plaintiff has adequate settlement funds and/or has not submitted proper attestation paperwork.
Strong tailwinds are driving the market for third-party administration of Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) funds:
Only a handful of companies offer third-party professional administration of WCMSA funds:
Broader opportunities exist for players beyond the current focus, as stakeholders across the workers compensation value chain (attorneys, insurers, corporates) are increasingly recognizing the value of third-party WCMSA administrators.
There are several market dynamics driving greater need and demand for third-party professional administration services for WCMSA funds, including:
While professional administration services are mainly focused on optimizing plaintiff settlement funds, their services also directly or indirectly benefit all parties involved in workers’ compensation cases, including attorneys, employers/payers, and CMS/Medicare.
In particular, CMS is beginning to grasp the benefits of involving WCMSA professional administrators to prevent fund mis-use. Consequently, CMS is beginning to recommend the use of third-party administrators.
Few WCMSA fund-specific professional administration service providers exist today—such as Brown & Brown and Ametros—despite high demand for specialized players. Instead, there are some larger service providers managing workers compensation, with sub-offerings that touch WCMSA professional administration (e.g., Impaxx, Medivest).
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