Ask Annie: MSAs and the “You Break It, You Buy It” Policy

January 28, 2021

Question: We are trying to settle a workers’ compensation claim with a Medicare beneficiary for $50,000. The claimant sustained an admitted right shoulder injury. He has unrelated neck issues from an old car accident. He and his treater are trying to argue the shoulder injury exacerbated his preexisting neck condition. We have denied the neck condition, but some of his shoulder treatment has been comingled with neck treatment, so we’ve technically paid for some care related to the neck. His attorney has not amended the Claim Petition to include the neck (yet). I’ve heard that submission of an MSA in situations like this can make one feel like a kid who just broke a trinket while shopping with their parent in a shop with clearly posted “You break it, you buy it” signs everywhere. Is this true? Will the MSA have to include future care for the denied neck condition?

Answer: Ah, this question definitely brings me back to my childhood. These “You break it, you buy it” signs were plastered everywhere inside of my favorite trinket shop, a mandatory (and the best) stop on the way to the cabin in the summer. What a great analogy.

Indeed Medicare does seem to have a “You break it, you buy it” policy. Medicare’s version of the policy is: “You paid for it, you bought it” when it comes to the allocation of future medicals. Unfortunately, the facts above do not bode well for participation in Medicare’s voluntary Medicare Set-Aside (MSA) review program. But all is not necessarily lost here. First, I will outline how Medicare views such a case, then some tips for readying this file for submission to Medicare, and close with a quick discussion of the non-submission route.

How Medicare Would View This Case

Medicare is generally not in the business of resolving fact issues for the parties as they explore a settlement involving an MSA. Medicare plainly gives the claimant beneficiary and their treater the benefit of the doubt when it comes to determining “related” future care. Thus, should the parties prepare and submit an MSA based on the facts above, it would likely include future care for the neck condition despite the carrier’s denial. That is because Medicare’s evidence for inclusion of the neck is 1) the word of the claimant backed by 2) the word of the treater plus 3) the payments made on the neck as documented in the claims payment history.

Prior to Submission to Medicare, Mitigate or Eliminate Unrelated Future Care

What does the First Report of Injury say? In the facts presented, the claimant beneficiary is not making a formal claim to include the neck condition. That has to count for something, right? We know under state law it does. Can you get a final state law ruling on the merits indicating no injury to the neck occurred or that if one did that it returned to baseline without the need for future care related to the injury? Can you “unbundle” the charges related to the neck and seek a refund for payments made? Is the treater qualified to be making the link between the shoulder and the neck (i.e. is a chiropractor or an orthopedist saying they’re related)? These are all good questions to ask and avenues to explore to potentially mitigate out the care for the neck prior to submission to Medicare.


If the parties are unable to mitigate out future care on the traditional MSA, perhaps it is time to consider an Evidence-Based MSA (EBMSA). Because the treater in the fact pattern relates the denied neck symptoms to the admitted shoulder claim AND there have been payments on the neck due to the bundled nature of the provider’s billing, perhaps it is best to obtain an Independent Medical Evaluation (IME). Medicare does not consider IMEs to be medical records and thus disregards them. Of course, we know that IMEs are an important tool to defending against a denied claim, especially like the one alleged in the questioner’s fact pattern. We know that they can be found to carry weight by adjudicators and thus they may be perfectly reasonable as clinical foundation to exclude future care for a denied condition. Just because Medicare and its review contractor refuse to make a fact determination and exclude the neck care does not mean there is no clinical foundation to reasonably exclude care. The Medicare Secondary Payer statute requires the parties to reasonably consider Medicare’s interest and to do so in good faith. It may be entirely appropriate for the parties to obtain an EBMSA that relies on the IME for clinical foundation to exclude the unrelated neck care.

So without some leg-work on this case to mitigate or eliminate the future care for the neck or using an EBMSA, it is likely that Medicare’s review contractor would allocate future care for the neck. ECS’ MSA options allow parties to swiftly and economically resolve claims with options for submitting to Medicare for prior approval or using our vast clinical and compliance resources to implement an evidence-based approach. Please reach out to your Regional Compliance Consultant with any questions.

Annie M. Davidson

Annie M. Davidson

Annie M. Davidson is the Vice President of Client Success for ECS. In her role, Annie works collaboratively with clients, industry partners, and leaders at all levels to identify and execute on short-term and long-term goals and consistently exceed expectations. Prior to joining ECS, Annie practiced as an insurance defense attorney in her native Minnesota where she litigated workers’ compensation and liability insurance cases, particularly those involving MSP issues. She is admitted to practice law in the State of Minnesota and the United States District Court for Minnesota, and is a graduate of William Mitchell College of Law. Annie can be reached at or at 651-262-9618.