Medicare eligible. It seems that when a defendant hears these words, they automatically place a target on your client’s back and aim for the bullseye. Here at Settlement Professionals, we have seen this happen year in and year out. That’s why we have crafted the ability to provide attorney’s with holistic Medicare Set-Aside solutions.
The label of being “medicare eligible” can lead to many un-truths. For example, defendants may claim that your client is required to create an MSA. Un-true. And this one: that defendants won’t be able to settle your case until they have proof that Centers for Medicare and Medicaid Services (CMS) has approved your client’s MSA. Un-true. Or, that you must obtain a CMS letter stating that an MSA is not required in your client’s case. Un-true, and not even possible. If any of this sounds familiar, it’s because defendants have been telling you un-truths about Medicare Set-Aside (MSA) arrangements for years. The truth is that MSAs aren’t legally required at all in liability personal injury cases, CMS is not approving liability MSAbs, and CMS will not provide a letter stating that an MSA is not required in a specific case. In fact, MSA’s are entirely voluntary – a conclusion that was once again confirmed as a result of the Aranki vs. Burwell case. Yet, this outcome doesn’t mean that MSA’s should be ignored. That is why SPI has tirelessly sought to provide Medicare Set-Aside solutions that address these untruths to help your client make an informed decision. Part of making an informed decision is knowing the history of MSA’s and understanding why MSA’s should not be ignored.
The History Behind Medicare Set-Aside Solutions
The Aranki vs. Burwell case evolved from a medical malpractice case that started in 2009 in Arizona. While a settlement had been reached, the defendants were still concerned about its finality due to the uncertainty of the MSA question. A lot was unknown about MSA’s back then, and the defendants thought that they would be liable without a court decision on its necessity. They demanded that the plaintiffs supply them with a letter from CMS stating whether or not the client was required to set up an MSA. With no immediate answer, the settlement was held up for three years. That is until a federal judge issued a pronouncement.
The judge stated that, no federal law or CMS regulation requires the creation of an MSA in a personal injury settlement. It gets better. This judge was also asked to rule on forcing CMS to issue a letter as to whether or not this client needs an MSA.” The ultimate finding being that there’s no federal law that requires it [CMS to issue a letter], so the court doesn’t see any standing here to even comment. No MSA required meant case closed, and this decision has acted as the ruling going forward. Yet, recent events indicate that a change could be coming soon.
More critical insight can be found in the Stalcup memo released in 2011 by Sally Stalcup, Regional Director of Region 6 for Medicare and CMS in Dallas. Her memo states that Medicare trust funds must be protected from payment for future services whether it’s Worker’s Comp. or liability. Surrounding language indicates that while CMS does not mandate a specific mechanism to protect those interests, and the law does not require a set-aside in any situation, that an MSA is the preferred method. Also of note is that any time settlement funds can be expected to pay for future services, Medicare is not to be billed for future medical services until these funds are exhausted. Exact text is shown below:
After this memo, a clamor for guidance followed and with that came an advance notice of proposed rulemaking, issued on June 15, 2012. This advance notice, addressing liability cases, included seven different options for handling the liability Medicare Set-Aside issue. Especially alarming was option number four, shown below, because it required submitting a proposed MSA to CMS for review and approval.
Fast forward two years later to October 8, 2014. The Project for Public Guidance, which this advance notice was part of, was withdrawn. Yet, expectations that CMS will resubmit at some point in the future still loom large. Added to these is another concern. Earlier this year, CMS published an update to an earlier pre-solicitation for a workers compensation review contractor. The update explains that the Statement of Work (SOW) is being updated to include the processing of Non-Group Health Plan (NGHP) Medicare Set-Aside arrangements, with an anticipated award date of November 7, 2016.
All of these are signs that the U.S. Government has pivoted and is looking once again at Medicare Set-Aside arrangements in liability personal injury cases.
In the meantime, it’s important to decide whether, and which Medicare Set-Aside solution is right for your client. That depends on their unique facts and circumstances, and whether their personality is that of a do-it-yourself or a do-it-for-you type. Since the government has already stated that the law requires that the Medicare Trust Funds be protected from payment for future services whether it is a Worker’s Compensation or Liability case. There is no distinction in the law. How exactly will your client comply with the law? The old pick a number out of the air, or a professionally produced MSA Allocation Study? Then, next question, self-administer, or professionally administered? If they go the do-it-yourself route, can you trust that they will follow through and put some amount of money from their settlement in some sort of account? And then what, just decide on their own which Medicare bills should be paid out of it? If and/or when Medicare comes around and questions how your client determined the amount of their account, and demands a detailed accounting of how they spent that money, how will your client answer? If Medicare dislikes their answers, and decides to deny future benefits for a time, will your client still be happy with the advice you gave them today? Whatever you do, don’t make these decision alone. Take advantage of consultation services from the Plaintiff’s MSA and Lien Solution and let us help.
Sign up to receive our 2 Ways to Avoid an MSA guide. Together, we can decide if one of these can work for you. If an MSA can’t be avoided and your client wants professional help, B we’ll create a custom, strategically minimized Medicare Set-Aside allocation to the lowest possible, reasonable and defensible number. The end result? More settlement funds in your client’s pocket and less potential for future liability for you.
Settlement Professionals, Inc. is here for you. Please visit our website at www.settlepro.com or call us with any questions at (800) 666 – 5584.