2017.Spring 9 b.
b. "Describe the rationale for the creation of the Medicare Set-Aside Allocations (MSAs)."
Examiner's Report
"All parties are in a WC settlement are required to set aside money for medical expenses related to the injury. The MSA will ensure that the amount paid by the WC insurer will still be sufficient to offer primary coverage when the insured is Medicare eligible.
This is true, but it didn't really answer the questions as asked. Yeah, that's what happens with an MSA. But that's not the "rationale." I wonder if they didn't give credit to candidates who wrote that they were created in response to WC companies being primary but stopping payments for medical treatments related to the injury after the claimant reached 65 and started receiving Medicare benefits. Unless the reason was "to ensure that the amount paid by the WC insurer will still be sufficient to offer primary coverage when the insured is Medicare eligible." But it didn't sound like that was the reason for its creation.
Comments
Yes, the question that was actually answered in the examiner's report was:
So, I'm not sure how they graded people who (correctly) provided just the rationale.
When I wrote the BattleCard answer, I included the rationale (take pressure of Medicare and make sure there's enough money to cover the person's medial costs) but I also included what was in the answer in the examiner's report just to cover all bases.
The CAS makes a big deal out of paying attention to the wording of the question but this is an example where they're the ones who didn't pay enough attention. A similar thing happened on Exam 6-Canada on the 2016.Spring exam and they gave no credit to people who correctly answered the specific question that was asked. In fact they listed such answers as "common mistakes" and rejected all appeals regarding the issue.
I don't think there's much you can do when this happens. You can't write extra stuff for every question because you'd never finish the exam. I suppose you just have to try for a margin above the pass mark so that if this happens it won't drop you below the pass mark.
Question related to the topic of MSAs but not directly to that particular Q mentioned above:
In the wiki under lame solution you wrote: "The fatal flaw was that the MSA must be agreed upon and funded by all parties to the settlement. There was no incentive for the parties to comply." Could you clarify what you mean by that statement about incentive? Was it that the insured agreed on whatever settlement the WC insurer offered b/c they knew they would get paid either by WC or Medicare?
Also in the source on pg 13 it states: "In the absence of aggressive collection, parties had little incentive to agree to MSA's." Could you help me decode this statement b/c I know in the wiki you mention that "all parties to a settlement must agree & fund the MSA." Wouldn't that be contradictory to the statement in the source about agreeing to MSA's?
The text example provides a good illustration.
If a 63-year-old is injured, they are not eligible for Medicare so their injuries are covered by some other form of insurance, let's say WC for the sake of this example.
When this person turns 65, they become eligible for Medicare but Medicare should not have to cover future costs for the injury incurred when the person was 63. These costs should be covered by money "set aside" earlier by the WC insurer. But the WC insurer has a way out.
If the WC insurer simply decides not agree to an MSA (and doesn't set aside any funds) then Medicare starts paying when the person turns 65. Medicare doesn't know the person was injured when the person was 63 and it's cheaper for the WC insurer to simply let Medicare take over payments. Medicare does not aggressively investigate the source of injury so there was no penalty (incentive) for the WC insurer not agreeing to an MSA and not telling Medicare about the previous injury.
The solution was passage of the Medicare & Medicaid SCHIP Extension Act (2007), which requires that the CMS (Center for Medicare & Medicaid Services) approves the MSA. It's a 3rd party that oversees the whole process and makes sure it works like it's supposed to. If the MSA is not approved then Medicare can refuse to make future payments and that's the incentive that was missing from the "lame solution".