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MEDICARE SET-ASIDE ARRANGEMENTS IN THIRD PARTY LIABILITY CASES

by Thomas D. Begley, Jr., CELA

Medicare Secondary Payer Act. While there is still some controversy as to whether a Medicare Set-Aside Arrangement is appropriate in a Third Party Liability (TPL) case, there is significant authority with a proposition that Medicare’s interest must be considered in a TPL case in the same manner that it must be considered in a Worker’s Compensation (WC) case. The question is really not whether the law applies, but rather will it be enforced. How much risk is the Personal Injury attorney willing to assume on behalf of his client and on his own behalf with respect to a potential subsequent malpractice case.

Medicare Secondary Payer Manual. The language of the statute of the Medicare Secondary Payer Act (MSPA) would appear to apply to all cases, including TPL and WC. The Medicare Secondary Payer Manual specifically refers to not only a Worker’s Compensation Medicare Set-Aside Arrangement, but also No-Fault Liability Medicare Set-Aside Arrangements and Liability Set-Aside Arrangements.[1]

CMS Memorandum. CMS has issued a Memorandum stating that in a TPL case an MSA is not required if a physician certifies that no future medical items or services will be required for that injury.[2]

Guidance from Dallas Region. The Dallas Region of CMS has stated, “The law requires that Medicare trust funds be protected from payment for future services whether it is Worker’s Compensation or a liability case. There is no distinction in the law.”[3]

U.S. Attorney General—Western District of New York. The U.S. Attorney for the Western District of New York has issued a protocol indicating that, under certain circumstances, his office will review Liability Medicare Set-Asides (LMSA).[4]

 

[1] Medicare Secondary Payer Manual (MSP) Chapter 1.

[2] CMS Memorandum, Subject: Medicare Secondary Payer—Liability Insurance (including Self-Insurance), Settlements, Judgments, Awards, or other payments for future medicals-information, from Acting Director, Financial Services Group to Consortium Administrator for Financial Management and Fee-for-Services Operations (Sept. 29, 2011).

[3] Sally Stalcup, MSP Regional Coordinator, CMS, Division of Financial Management and Fee-for-Service Operations Region VI Handout (May 25, 2011).

[4] Western District of New York, Medicare Secondary Payor Protocol, Assistant U.S. Attorney Robert G. Trusiak (May 6, 2011).

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