Medicare Set Aside Arrangement Terms

Question
My client is a Medicare beneficiary who suffered a neck injury in a Motor Vehicle Accident. Their auto insurance has paid for treatment to neck thus far. Adverse driver policy limits are $25,000 and case will probably settle for less than that. It is unknown if he or she will need any future neck treatment. How do you recommend we deal with MSA issues in such a small case? Also, can you direct me to a site which shows how to establish an MSA?

Wyoming Attorney

Answer
The Medicare Secondary Payer Act (42 U.S.C. Sec. 1395y(b)) requires that settling parties consider and protect Medicare's interests. However, that statute does not advise us how to properly protect Medicare's future interests. In fact, we do not even have a statutory definition of "Medicare Set Aside Arrangement" or "MSA" at this point. While CMS has provided guidance as to how to protect its future interests in workers' compensation cases (via 12 policy memos to date), it has not provided even a single memo to date about how to protect its future interests in a tort case. Absent any law or guidance on point about how to protect Medicare's future interest in a liability case, absent a definitive allocation to future meds in the settlement release (or a line item for future meds in a jury verdict form), a MSA is not appropriate in a liability settlement. Considering Medicare's future interests rarely means paying Medicare money in the form of a MSA in a liability settlement.

Having said that, you will want to document your file and memorialize how you did consider and protect Medicare's future interest, arriving at the conclusion that a MSA was not appropriate. That documentation can be in several forms, including an MSA evaluation from a neutral third party entity operating in the compliance space or a note from the treating physician indicating that the claimant does not require any future injury-related care that would otherwise be covered by Medicare. With regards to information about how to establish a MSA, I would lead you to Affiance Partners out of Cincinnati, OH. There website is www.affiancepartners.com

I would be happy to discuss your case specific facts with you further at your convenience as well as talk about the MSA obligation in general.

My best,
John Cattie