MSA Deductions

Posted by Sylvius von Saucken

Question:
What has anyone's experience been deducting from the set aside fund a court approved attorney's fee at the time of approval on a one-time basis?

Answer:
According to the CMS memos (specifically 5/7/2004), admin fees and/or attorney costs specifically associated with establishing the MSA cannot be charged to the MSA. Practically speaking, the only proper use of MSA proceeds is to pay for future injury-related care otherwise covered by Medicare. There are two notable exceptions – any bank charges or postage can be paid out of the MSA. We have even asked CMS (with no answer yet) whether tax preparation electronic filing charges are properly paid out of an MSA. We asked the question because the standard is similar to tax law “everything is NOT payable from the MSA unless specific rules exist to the contrary."

My best,
Sylvius