Don’t Miss the Boat When Mediating Post-Settlement Medicare Set-Asides



In certain cases, waiting until mediation to discuss future medical treatment for Medicare beneficiaries will significantly delay and possibly prevent any possibility of settlement.

In workers’ compensation cases where the plaintiff/claimant is a Medicare beneficiary or reasonably expects to become a Medicare beneficiary within 30 months of settlement, certain steps must be taken to protect Medicare’s interests if the beneficiary is likely to receive medical treatment after the settlement.  A portion of the settlement must be placed in a Medicare set-aside account (MSA).   The MSA is a separate account approved by Medicare that will fund the reasonably expected post-settlement medical bills related to the injury in question.

The consequences of ignoring this issue can be significant.  If Medicare thinks a MSA should have been established, it can stop paying for future medical bills.  Waiting until mediation to submit a proposed MSA to Medicare for approval of future medical bills can delay a final settlement for months while Medicare reviews the MSA.  This is a problem when the mediation is scheduled close to a pending trial date.

A mediated settlement can also be delayed or impossible to achieve if the parties disagree  whether a MSA is required with respect to claims that do not involve worker’s compensation.  In June 2012, Medicare filed an Advance notice of proposed rule-making to solicit comments on standardized options so Medicare beneficiaries and their representative will know how they can meet their obligations to protect Medicare’s interests in non-worker’s compensation cases.  New rules have yet to be promulgated.

Investigating and discussing any potential post-settlement MSA issues well before mediation will improve the likelihood of settlement.

Pacific ADR’s neutral have extensive health care law experience and stand ready to assist in the settlement of your dispute. Please visit our website at or call us at 206.624.3388.

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