MSA Guidelines In Liability Cases

Posted by Mary Skinner

Question:
My client fell in December 2007 and had to undergo a total knee replacement in 2008. All medical coverage provided through her employer's group plan; with a 3rd party lien of $55k. My client retires in June 2009 at age of 72. The client's primary insurance is now Medicare. Should we go through a CMS Review to determine whether or not a MSA will be required for questionable future follow-up care?

Hawaii Attorney

Answer:
Not necessarily. CMS has not issued any guidelines regarding MSA in liability cases and until we receive guidance from CMS about the use of MSAs in liability cases, the most important thing you can do is document your efforts at considering Medicare's interests. Whether that documentation comes in the form of an internal memo within your firm, notes from a telephone consultation on the case, language inserted within the settlement agreement itself, or an MSA evaluation from an independent, neutral 3rd party like GFRG, documenting your efforts to substantially comply with 42 U.S.C. 1395y(b)(1) will serve to show Medicare that you indeed did make a good faith effort at protecting its interests. In turn, you will be protecting your client's Medicare benefits.

GFRG generally only recommends an MSA be established in a liability case when:1.) The liability settlement is above $800K in gross recovery or there is a judicial allocation/verdict for future medicals regardless of the settlement amount. 2.)There is going to be a permanent shift of the burden of paying future injury-related medial expenses from the liable third party to Medicare; and 3.) The settlement contemplates future injury-related expenditures. If you do not have any of these elements, you do not need to consider an MSA.

Based upon the information you provided, at face value your case does not look like an LMSA candidate. Of course, the appropriate measures need to be taken to reimburse Medicare for past injury-related care even though Medicare was secondary the fact that he had Medicare requires that notify Medicare. Additionally, I recommend that you memorialize in your file the internal evaluation in regards to the necessity of an LMSA.

The only liability case wherein Medicare contends that it is clear an obligation exists is a case involving a Medicare beneficiary where there is a defined judicial allocation for future medicals (i.e. an interrogatory / verdict sheet with a definitive allocation for future medicals).

I hope this helps.
Mary Skinner