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John Bair
John Bair
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Medicare Set-Asides: Four Steps to Consider


After a liability or Workers' Compensation case settles, clients find themselves seeking the most effective way to maximize their settlement. One major government program directly affected by settlement is Medicare. The Centers for Medicare and Medicaid Services("CMS") takes the position that Medicare's future exposure on liability and Workers' Compensation settlements must be protected and consideration of Medicare's interests must be documented. Milestone Consulting, LLC's settlement consultants counsel trial attorneys on balancing their client's future eligibility with the obligation to consider the government's interests. The process involves:

  1. Advising to the need for a legal opinion to determine if a Medicare Set-Aside ("MSA") is required;
  2. Determining the allocation;
  3. Preparing for future compliance; and
  4. Implementing the most cost-effective funding solution.

Retaining an experienced settlement planner is essential to this process. We first determine if a MSA is even necessary, oftentimes with the advice of Medicare counsel. For instance, in liability cases where a treating physician can attest that future injury-related care will not be required, Medicare may consider its interests satisfied1.

If a set-aside arrangement is prudent, then we work to determine the proper allocation. As CMS does not require a review of MSAs in all cases2, we can help you determine if submission of the plan is necessary.

A key part is step three- preparing for future compliance. An experienced settlement advisor can make sure that a logical, documented approach is used to provide your client with the confidence that the account administration will meet federal guidelines for compliance. We often recommend that a professional administration and compliance firm be arranged for these purposes.

Lastly–and perhaps most important to your client– a cost-effective funding solution must be selected. Using a settlement planning expert with access to the relevant life insurance companies and knowledge of all funding options is vital to maximizing your client's recovery.

While we've received positive feedback on these four steps, I'm curious to know if anyone has successfully used a different approach, or if you have questions regarding the approach I've described.


1 CMS Memo, 9/30/2011: http://www.cms.gov/Medicare/Coordination-of-Benefits/COBGeneralInformation/Downloads/FutureMedicals.pdf2

2 CMS Memo, 5/11/2011: http://www.cms.gov/Medicare/Coordination-of-Benefits/WorkersCompAgencyServices/Downloads/May112011Memorandum.pdf

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