Sunday, November 22, 2009

Medicare Compliance in Motor Vehicle Accidents

Posted by John Cattie

I am trying to settle a Motor Vehicle Accident case with a knee injury. My client was born 12/02/45 making him more than 62 1/2 years old and Medicare eligible in 30 months or less. Settlement will be less than 100,000. There is a 50% chance of having knee replacement surgery at some point in the future. Treating Ortho says total medical costs in today’s dollars approximately $20,000. The client is eligible for No-Fault medical. Approximately $14,000 left available. What needs to be done as far as Medicare is concerned? Thanks in advance.

Minnesota Attorney

When we talk about achieving absolute Medicare compliance, we are really talking about two separate and distinct moving parts. Medicare has: 1) past interests, represented by conditional payments made from the date of injury to the date of settlement for injury-related care; and 2) future interests, represented by payments made by Medicare from the date of settlement going forward. Only when both interests are properly addressed may one attain absolute Medicare compliance.

To satisfy Medicare's past interests, the parties must reimburse Medicare for those conditional payments made. Typically, this is done out of the settlement proceeds once the final settlement has occurred. To satisfy Medicare's future interests, the claimant should determine whether a Medicare Set-aside Arrangement ("MSA") would be appropriate. While we know that MSAs are commonly used in workers' comp cases, the use of MSAs in a liability case is rare. Basically, a MSA is only appropriate in a liability case if the settlement release contains a definitive allocation to future meds or there is a jury verdict form containing a line item for future meds.

In a MVA case you ask about, two issues need to be addressed. 1) Medicare's past interests - since your client is not yet a Medicare beneficiary, Medicare would not have paid anything for injury-related care. Therefore, Medicare has no past interests that need be satisfied. 2) Medicare's future interests - because this is a MVA with no known workers' comp component, unless the settlement release contains a definitive allocation to future medical expenses, a MSA is not necessary. Therefore, Medicare's interests are fully protected.

Even though a MSA is not necessary, you will want to document your file and memorialize the fact that you considered Medicare's interests at the time of settlement. Ways of doing that are inserting Medicare specific language into the release depicting that the settling parties considered Medicare's interests or getting documentation from a professional operating in the Medicare compliance space showing that you considered Medicare's interests by seeking an independent 3rd party evaluation of your case.

Hope this helps,
John Cattie