Simple Answer: A Medical Cost Projection (MCP) typically consists of funds allocated for future medical expenses, regardless of whether they would be covered or not by Medicare. An administrator can manage MCP accounts for all sorts of medical care. In many cases, an MSA will be established along with an MCP that is designed to pay for healthcare items the MSA does not cover. Unlike an MSA, if your MCP funds exhaust, Medicare does not step in as primary payor.
A settlement agreement could also include a Medical Cost Projection (MCP), which consists of funds designated for medical expenses but that are for items that either Medicare would not cover or that are not related specifically to the injury. Sometimes these accounts are referred to as “Non-Qualified” medical expense accounts, meaning the medical expenses in this projection would not qualify to be covered by Medicare so that they are not in the MSA. These accounts, when administered by a professional administrator, may also be referred to as Medical Custodial Accounts. This type of projection account does not carry reporting requirements to Medicare and has more freedom regarding treatments. One of the major differences is that with an MCP, if you exhaust, Medicare does not step in as the primary payor.