In recent years, Medicare has become the bane of the existence of lawyers who practice personal injury law, both on the plaintiff’s and defendant’s sides. The agency has claimed, through a handful of grossly ambiguous policy memoranda, that its purported “future interest” in settlements must be considered. As a result, so-called Medicare Set Asidessometimes referred to as MSAshave become increasingly prevalent.
The issue arises when the plaintiff is receiving Medicare benefits, either due to age or through Social Security Disability, or will receive such benefits in the near future. When an MSA is created, monies from a personal injury settlement are “set aside” in a segregated account, to pay for a plaintiff’s future medical bills that might otherwise be borne by Medicare for conditions claimed in the lawsuit. Insurance carriers have begun to insist that plaintiffs agree in their settlement releases to create set-asides, and to fund them in specific amounts. Some carriers have even gone so far as to hire third-party vendors to project the plaintiff’s future medical costs from the subject injury and to demand that the set-aside be funded in that amount, even if defense counsel had argued during the litigation that the plaintiff would never need more treatment.
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