Misconceptions about Liability MSA’s

Liability Medicare set-asides are defined as money taken from a liability or automobile accident settlement that can be used to pay future medical and prescription drug payments. These payments are allocated in order to prevent these charges from being reimbursable to Medicare. LMSA’s are often a source of confusion for many people. This is due in part to a lack of clarity on how they should be carried out. Unlike Workers’ Compensation Set-Asides, for which the Centers for Medicare and Medicaid Services (CMS) has provided a reference guide, policies on liability MSA’s are more vague. This can cause a great deal confusion for attorneys and their clients.

To provide clarity, we will tackle a couple of common misconceptions about set-asides, including those related to liability settlements.

False: Liability Settlements Don’t Need to Consider Medicare’s Interests as Workers’ Compensation Settlements Do

While there are more establish guidelines for worker’ compensation settlements and set-asides, it doesn’t mean that Medicare’s interests don’t have to be considered in liability cases. According to 42 U.S.C. §1395y(b)(2)(A)(ii), when a workers’ compensation plan, liability or automobile insurance, or no-fault insurance is in place, Medicare is not to make medical payments. With that said, it’s vital to keep Medicare’s interests in mind in these situations.

False: MSA’s Should be Used to Reimburse Conditional Medicare Payments Before a Settlement is in Place

MSA’s including LMSA’s should only be used after the settlement is in place. MSA’s are meant to be used to take the cost of future medical expenses away from Medicare after a settlement.

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Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

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