Can an MSA be used for medical expenses incurred outside the USA?
The question of whether a beneficiary can spend funds on Medicare treatment outside the USA comes up mostly in the context of SSDIB/Medicare eligible workers that want to move back to their home country after a settlement. Many times they have no intention of returning. So the following questions arise given the fact pattern above
1. Is an MSA appropriate
2. Can they spend the funds in their home country
3. What will happen if they do spend the money
The answer to question one is yes. MSAs are appropriate when beneficiaries are Medicare eligible. Some confuse Medicare enrollment with eligibility. Just because the claimant is in a foreign country and is not enrolled in Medicare doesn’t mean no MSA. CMS’ position is that the claimant could always return to the US and enroll. Unless the possibility of future Medicare enrollment is completely foreclosed (and remember it is an entitlement program open to all who are eligible) then an MSA is appropriate.
Question two is fairly straightforward. Medicare covers foreign treatment under a set of VERY limited circumstances (see link http://www.medicare.gov/publications/pubs/pdf/11037.pdf) . So since the purpose of an MSA is to pay for expenses normally covered by Medicare and related to the work injury, payment to a foreign provider will seldom meet Medicare coverage guidelines and would not be appropriate expenditures from the MSA. That’s not to say a claimant cannot or should not use those funds to pay for treatment. Just realize that if they do, and need Medicare treatment in the future, they will have to demonstrate proper exhaustion of the funds prior to Medicare accepting primary payment responsibility.
Finally, everyone is worried about what will happen if they spend the MSA inappropriately (as probably more than 50% of claimants ultimately do). There seems to be a fear of the “Medicare police” or some other nefarious government operation that will exact an unimaginable punishment for this perceived felonious act. No such force exists (yet) and there is no prison time for buying a hot tub instead of getting a lifetime of physical therapy. The worst that is going to happen is Medicare will deny payment for future treatment related to the injury until it can be proven that the funds were expended correctly. Or if they make payment in error, Medicare will seek reimbursement of the funds from the claimant (or possibly his or her attorney or the carrier but that is a subject for another discussion).
I don’t know. If I am a former Wal-Mart employee turned millionaire claimant because of an inflated CMS approved MSA, I am headed home to Mexico, looking for a big house on the Gulf, getting the medical treatment I need for a fraction of US costs, and not caring one iota for future Medicare coverage or CMS WCMSA policy. It is difficult to overestimate the therapeutic effect of an ocean front hot-tub.