2013 Casualty Loss Reserve Seminar
Reserving for Medicare Set-Asides
The Medicare Set-Aside (MSA) process—which allocates funds for future medicals for Medicare beneficiaries—remains strife with operational challenges that include long delays for CMS and contractors to review and approve an MSA, no formal appeals process, and a general lack of response by CMS. As a result, medical paid severities are increasing, claims are remaining open longer, and payers’ pending case inventories are growing at a time when payrolls have declined, the market is soft, and interest rates are miniscule.
This presentation will first examine the major issues impacting and complicating the Medicare Secondary Payer Act process, the possibility for potential change, and the associated expected outcomes.
The MSA process also brings a challenge to actuaries who have to reserve for these claims. The second part of this presentation will explore various methods that companies are using to account for these future payments.