When would one consider a liability medicare set-aside? If one is injured in a non-work related car wreck, or something falls on them while grocery shopping through no fault of their own, it could trigger a third-party liability claim. If so, and it results in a settlement to the injured party, then one must decide if a Liability Medicare Set-Aside should be established to protect Medicare’s interest. A Liability Medicare Set Aside (LMSA) is an amount of money set aside that allocates a portion of the settlement funds specifically for future medical services related to injuries sustained secondary to a third-party incident. If a person is a Medicare beneficiary and engages in a settled third-party liability claim, there may be a need for a Medicare Set Aside to preserve their future eligibility for Medicare benefits. Although, long anticipated, there are currently no guidelines or formal review process for liability settlements.
CMS has made it clear through previous regional memos that one is charged with determining the nature of the Medicare Secondary Payer compliance obligations in any liability case. However, until CMS renders formal guidance or there is a law enacted regarding these LMSA’s, there remains no definitive way to identify Medicare’s future interest. CMS’s directive remains clear: Medicare’s interests must be protected, whether a workers’ compensation settlement or a liability settlement. There is one noted exception: If the treating physician opines in writing that the injured party’s treatment was completed at the time of settlement. If one fails to fall within this exception, the expectation is that a liability Medicare set aside should be considered. We feel the LMSA is the best practice to consider and protect Medicare’s interests in a non-workers’ compensation settlement. Let FFC assist you in administering and managing your LMSA. Call us for more information.