Question GRG: My client is demanding funds after settlement, but does not want to do an MSA. Is there any affirmative duty by the attorney to withhold disbursing settlement proceeds to client? Is there any exposure to the attorney? Settlement did not encompass money for future medicals. What are my obligations here to Medicare and my client?
Answer: What a timely question in light of Medicare beginning to provide more guidance on how to address future medicals in liability settlements (via the Advanced Notice of Proposed Rulemaking issued earlier this year). We know that we have to do something to address future medical obligations, but the question is what to do? While it does not automatically mean to fund a Medicare Set Aside (MSA) in every single settlement, the issue does warrant some deeper analysis and documentation in the file, knowing that formal rules and regs are coming.
To your exact question, there is no affirmative duty on an attorney to withhold settlement proceeds against our client’s wishes. In fact, it is likely to be found ethically impermissible to do so (following Model Rule 1.15(d) regarding safekeeping property). However, there is nothing to say that everyone of us should have something to evidence the fact that our clients fully understand the ramifications and repercussions of failing to properly consider Medicare’s future interest under the MSP Act. Having that conversation, and then the client’s signature evidencing that understanding is paramount. To that end, here is an MSA Disclosure Form you may use to accomplish that goal. This is one of the several form docs generated when a client uses our MSA Decision Engine, which allows clients to ask and answer the question “Is an MSA appropriate based on these case specific facts” simply and easily. The MSA Decision Engine is the lowest cost of compliance going today on the MSA issue and should give you some peace of mind knowing that you have complied with all current statutory, regulatory and administrative guidance from Medicare as well as relevant case law.