A liability Medicare set-aside (LMSA) is a planning tool used to ensure that Medicare is not prematurely billed after settlement for future injury-related medical care. Medicare set-asides come in all shapes and sizes, and they can be as simple as a checking account opened by the injured person or as complex and complicated as a formal trust. And while Medicare set-asides are Medicare’s preferred and most popular vehicle for addressing future medical obligations under the Medicare Secondary Payer (MSP) Act, they are far from the only option.
In fact, unlike what many settlement planning companies may have led you to believe, MSAs are not required by law. The MSP Act simply advises that Medicare will not pay for medical expenses where payment has been made under workers’ compensation, automobile insurance, liability insurance (including self-insurance) or a no-fault insurance plan. Therefore, the real questions for an attorney to ask are:
“Is my client being compensated for future medical care as part of the settlement? And if so, have I taken Medicare’s interests into account?”
When compensation is provided specifically for future medical costs, then Medicare should not be expected to pay a bill related to the settlement for as long as the settlement monies will last. However, after the settlement funds dedicated to future medical costs have been depleted, Medicare once again resumes its responsibility to pay. This raises the question:
“How much of the original settlement must I put aside in Medicare’s interest?”
It is also important to note that Medicare does not need to approve the LMSA. In fact, for liability cases, Medicare has not even established a formal review process. Thankfully, companies like Milestone can help with MSA assessment and protect the majority of your settlement dollars from Medicare’s interests.
At Milestone, our team of experts can help with assessing and setting up a liability Medicare set-aside when appropriate. Experienced consultants will ensure that individuals comply with Medicare secondary payer laws and that their future medical needs and Medicare eligibility will be protected.
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).