WHEN IS A MEDICARE SET-ASIDE ARRANGEMENT (MSA) REQUIRED IN A THIRD PARTY LIABILITY CASE?
by: Begley Law Group
by Thomas D. Begley, Jr., Esquire, CELA
In any recovery involving a personal injury case, the interest of Medicare must be considered.
Reasons Support the Argument that the Medicare Secondary Payer Act Applies to TPL Cases with Respect to MSAs
There are a number of reasons to believe that MSAs are appropriate in personal injury cases. They are as follows:
- An informal survey of the 10 CMS Regional Offices by members of the Special Needs Alliance confirmed that each Region has taken the position that even in third party liability (TPL) cases, Medicare’s interests must be considered, and in the absence of further guidance, the Worker’s Compensation (WC) guidelines should be followed.
- The Medicare Secondary Payer Manual now includes language referring to “Liability Set-Aside Arrangement.”
- CMS has issued a memorandum that in TPL cases an MSA is not required “where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury relating to the liability insurance (including self-insurance) ‘settlement’ has been completed as of the date of ‘settlement’ and where future medical items and/or services for that injury will not be required, Medicare considers its interests, with respect to future medicals, for that particular ‘settlement’ satisfied.” The converse would appear to be that if the treating physician will not sign such an opinion letter, the MSA would be required.
- The U.S. Attorney for the Western District of New York has issued a protocol indicating that, under certain circumstances, his office will review MSAs in TPL cases.
- A U.S. District Court has found that a set-aside for future medical expenses in a liability case is appropriate.
Cases Where an MSA is Not Required
There are several situations in which an MSA is unnecessary:
- The facts demonstrate that the claimant is only being compensated for past medicals and not for future medicals. There is no evidence of an attempt to maximize other aspects of the settlement.
- The treating physician concludes in writing that, to a reasonable degree of medical certainty, the individual no longer requires any Medicare-covered treatments related to the claim.
- The client is not receiving Medicare and has no reasonable expectation of receiving Medicare within 30 months. The Medicare Secondary Payer Act does not apply to individuals not covered by Medicare.
 42 U.S.C. §1395y(b)(2).
 CMS Memorandum, Subject: Medicare Secondary Payer – Liability Insurance (including self-insurance) Settlements, Judgments, Awards, or Other Payments for Future Medical Information, from Acting Director Financial Services Group to Consortium Administrator of Financial Management and Fee for Services Operations (Sept. 29, 2011).
 Western District of New York, Medicare Secondary Payer Protocol, Assistant U.S. Attorney Robert G. Trusiak (May 6, 2011).
 Big R Towing, Inc. v. Benoit, 211 W.L. 43219 (W.D. La. Jan. 5, 2011).