When resolving a personal injury case involving a Medicare-eligible-beneficiary, or a plaintiff who will be Medicare eligible within 30 months of the settlement, plaintiffs’ attorneys face important considerations regarding future medical expenses. Although there is currently no statutory or regulatory requirement mandating Medicare Set-Asides (MSAs) in liability cases, there are proactive steps that attorneys can take to safeguard their clients and reduce potential future complications.
Assess Whether an MSA is Appropriate
One of the first considerations during settlement negotiations is determining whether accident-related medical treatment is reasonably anticipated following the settlement. If a client is already enrolled in Medicare (or, again, is expected to become eligible within 30 months of settlement) and ongoing treatment is likely, it may be prudent to evaluate whether an MSA amount should be calculated.
An MSA can serve as evidence that Medicare’s future interests were considered during the settlement process.
While every case does not require a formal allocation, documenting the basis for decisions regarding future medical expenses can provide valuable protection if questions arise later. A thorough assessment should focus on the client’s current medical condition, future treatment recommendations, net settlement amount and the likelihood of Medicare-covered services being needed as a result of the injury.
Clearly Document Settlement Terms
Proper documentation is critical. When practical, settlement or mediation agreements should clearly address whether any portion of the settlement is intended to compensate the plaintiff for the future medical expenses related to the injury.
When future treatment is reasonably foreseeable, a formal MSA allocation may be appropriate. A professionally prepared allocation by Paramount provides a detailed analysis of projected future medical costs and can demonstrate that Medicare’s interests were reasonably considered during settlement.
Educate Clients on Their Responsibilities
Client education is one of the most important aspects of settlement planning.
Many Medicare beneficiaries are unaware that Medicare may deny coverage for injury-related treatment if Medicare can justify that settlement funds were intended to cover those expenses.
Attorneys should ensure their clients understand the potential consequences of resolving their case without adequately addressing future medical expenses. Plaintiffs should be informed that failing to properly consider Medicare’s interests could result in delays of future Medicare coverage for injury-related care.
If a formal MSA allocation has been prepared, attorneys should also educate clients about the proper administration of those funds. This includes maintaining accurate records, using funds only for qualified medical expenses, and understanding reporting and account management requirements, including reporting the accounting to Medicare directly.
Protecting Clients Through Proactive Planning
By carefully evaluating the need for an MSA, thoroughly documenting settlement terms, and educating clients on their responsibilities, plaintiff attorneys can help reduce risk and support better outcomes.
Partnering with Paramount can further strengthen the process and provide confidence that both the plaintiffs’ interests and Medicare’s interests have been appropriately considered.
