Question: We represent a client in a medical malpractice claim alleging misdiagnosis of bladder cancer. Medicare paid some bills and we have a conditional lien amount. Should funds be allocated for our client’s future Medicare treatment?
Answer: This is a very timely question given the expectation that the Centers for Medicare & Medicaid Services (CMS) appear to be on the verge of providing a Notice of Proposed Rulemaking about future medicals under the Medicare Secondary Payer Act (MSP). Here’s what we know today. Under the MSP, there are 2 types of medical expenses to take into account. First, there are past medicals or “conditional payments” where Medicare may have made payment for a beneficiary’s injury-related care from date of injury to date of settlement. Second, there are future medicals which Medicare may be asked to pay at some point post-settlement for a beneficiary’s future injury-related care.
The conditional payment reimbursement obligation is explicit, and you can expect further guidance very shortly with respect to conditional payment reimbursement regulations from CMS. The future medicals obligation is in a state of flux, and we expect guidance here shortly as well. Essentially, your question is whether you need to fund a Medicare Set-Aside (MSA). The answer is maybe. It will depend on your case specific facts. To answer the question, you should look to whether the beneficiary has the proper factual background to warrant the MSA being established, but also whether (and perhaps to what extent) future medicals will, in fact, be funded as part of any settlement of the medical malpractice claim. Such funding can either be explicit or implicit (contained within the one undifferentiated settlement amount). If future medicals are funded as part of the settlement, that amount should be the maximum amount of any MSA funded. If future medicals are not funded (and you can quantitatively prove that by the math itself), an MSA may not be needed.
Determining whether future medicals exist and to what extent they exist is one of our core competencies. The Garretson team has reviewed this allocation issue in thousands of cases, and helped parties determine the appropriate level of MSA compliance based on their case specific facts. We would be happy to help you as well. Just give us a call at (704) 559-4300.
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