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My client has received a personal injury settlement. How do I determine if an MSA is required?

by: Begley Admin

Not all cases require a Medicare Set-Aside Arrangement. It is important for personal injury attorneys to understand when a set aside is required and when it is not. While the MSA protects the client and the personal injury attorney, it does reduce the pool of money available from the settlement to be used by the client for other purposes. Therefore, the goal is always to avoid establishing an MSA, if prudently possible. Here are some important considerations:

• No Future Care Related to Injury. The theory is that it is not fair for a plaintiff in a personal injury action to receive money from the defendant to pay for future medical care, pocket that money, and send the bill for the future medical care to Medicare. However, if it is anticipated there will not be future medical care related to the injury, then no MSA is required. A letter from the treating physician can be obtained and filed. In situations where future medical bills related to the injury are anticipated, this strategy is not helpful.

• Medicare Beneficiary. Is the plaintiff in the lawsuit receiving Medicare? If not and if the client has no “reasonable expectation” of receiving Medicare within the next 30 months, then an MSA is not required. Clients do not always know whether they are receiving Medicare or Medicaid. It is helpful to ask the client to produce his or her medical card to make that determination and copy the card for the file.

• Reasonable Expectation. If a client is receiving SSDI, then he has a reasonable expectation of receiving Medicare within the next 30 months, because a person receiving SSI is automatically eligible for Medicare 24 months after the Determination of Disability. Clients often confuse SSI, SSDI, and Social Security Retirement Income. Social Security Retirement Income is based on age, and the age is dependent on the birth date of the recipient. SSI and SSDI are based on disability. Normally, if a client does not have a work history, he will be receiving SSI rather than SSDI. If a client does have a work history, he is likely receiving SSDI. In some cases, the client has a work history, but the amount of the entitlement based on that history is less than the minimum SSI payment. In those situations, the client would be receiving both SSI and SSDI. Clients receiving SSI usually receive Medicaid. Clients receiving SSDI receive Medicare. If a client receives both SSI and SSDI, he could also receive both Medicaid and Medicare. It is also possible for a client to receive SSDI through the work record of a retired, deceased, or disabled parent. Obtaining the proper paperwork is always essential.

Visit the Begley Law Group website at www.begleylawgroup.com for a Quickscreen/Questionnaire to determine whether an MSA is required.