Synergy Blog

Liability Medicare Set Asides, Insurance Carriers and Unsubstantiated Demands

Insurance carriers are bringing up the Medicare set aside (MSA) “issue” when it comes time to draft the release more frequently. In many instances, the plaintiffs are not yet eligible for Medicare benefits, nor may they ever be entitled to receive Medicare benefits.  Plaintiff attorneys need to proceed with caution with regard to the Medicare set aside release language. Inappropriate provisions in the release could constrain their client’s options relative to receiving public benefits and have adverse tax implications, which could result in a legal malpractice claim.

As a recent example, Synergy was asked to review Medicare release language. The insurance carrier insisted the plaintiff agree to language indicating he would not ever apply for social security disability benefits. Agreeing to this would impede his ability to receive disability income and eventually Medicare benefits. In another case, the insurance carrier insisted the plaintiff not only establish an MSA but also submit the MSA to the Centers for Medicare and Medicaid Services (CMS) for review and approval. The insurance carrier attempted to build these terms into the mediation agreement. This client was receiving Medicaid benefits but was never going to be eligible for Medicare since she had not earned enough working credits to qualify.

These problems are occurring because some MSA vendors, in an effort to drive business, have been convincing insurance carriers that failing to do a set aside in any case exposes them to future liability/consequences if not properly addressed. CMS has made it clear that the MSA issue is the plaintiff’s responsibility and the role of the defendant is to report current Medicare beneficiaries under Section 111* mandatory insure reporting. The reality is that the defendant has no exposure but plaintiff counsel has legal malpractice risks if they fail to properly advise the client regarding the set aside issue when they are a current Medicare beneficiary or have a reasonable expectation of becoming one within 30 months.   

If you have a client who is a current Medicare beneficiary that is going to require accident related care in the future and there are funds earmarked towards future medical treatment, a Medicare set aside should be considered. However, there are numerous ways to deal with Medicare secondary payer compliance to ensure both your firm, as well as your clients are protected. At Synergy, we have the solutions that will help you settle cases compliantly for Medicare beneficiaries.  

*It should be noted that it is impossible for a defendant/insurance carrier to report a claim to Medicare when the plaintiff is not a current Medicare beneficiary.

– See more at: file:///Volumes/Design/Source%20Files/Synergy%20Settlement%20Services/Website%20Development/Site%20Backup%20Feb%202015/


"I learned of Synergy through the state trial lawyers association when I was looking for help in dealing with Medicare. As you know, dealing with Medicare can be difficult and time consuming. We all get the articles and updates regarding Medicare, but Synergy does an incredible job of clarifying so many questions. I cannot thank you and the Synergy staff enough for the assistance, insight, and professionalism. You can be sure that I will only be recommending Synergy to my clients for Medicare issues in the years to come."

Jared P. Greenberg
Greenberg & Strelitz, P.A.

"Synergy is an invaluable partner in the mediation process. They have extensive expertise in Medicare, Medicaid and Structured Settlements and the ability to explain the impact of these complex concepts to my clients in simple, clear and understandable language. This allows me to focus on obtaining the best possible result in the settlement process."

Michael J. Winer, Esq.
President Florida Workers Advocates (FWA)

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