Tag Archive for 'set aside'

DISTRICT COURT REVIEWS AND APPROVES PARTIES' LMSA

Published on October 6, 2011 in Uncategorized. Closed Tags: , , , , , .

In a recent order by the United States District Court for the Eastern District of Arkansas, the court approved the parties’ Liability Medicare Set Aside (“LMSA”) amount to cover the plaintiff’s future medical treatment for accident-related injuries that would otherwise be covered by Medicare.  The plaintiff had sued seeking damages associated with a permanent and disabling injury to his right hand while working as a truck driver aboard a floating barge.  The parties reached a settlement agreement where plaintiff agreed to compromise and discharge all claims against defendant in the liability suit and all claims under the Longshore and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq., against the employer and workers’ compensation carrier in exchange for a total payment of $1,000,000.00. 

The plaintiff was a current recipient of Social Security Disability benefits, and therefore, he was Medicare eligible.  To protect Medicare’s interest in the settlement, the parties agreed to establish an LMSA and retained the Garretson Resolution Group to determine an LMSA amount to cover the future cost of plaintiff’s accident-related medical treatment.  The proposed LMSA was submitted to CMS for approval, but CMS refused to review it due to “workload issues.”  Instead, the parties filed a motion with the court to review and approve the proposed LMSA.  The court approved the proposed LMSA finding that the parties had reasonably considered and protected Medicare’s interest in the settlement and that the LMSA amount fairly and reasonably took Medicare’s interest into account. 

It seems likely that CMS will refuse to review the majority of LMSA’s submitted for third-party liability settlements.  By having a court review and approve a proposed LMSA, parties can obtain some assurance that the amount set aside is sufficient and meet their good faith obligations.

Date of Decision: August 9, 2011
Smith v. Marine Terminals of Arkansas et al., No. 3:09-CV-00027 (E.D. Ark. Aug. 9, 2011).

MEDICARE CONSIDERS ITS FUTURE INTEREST SATISFIED WHERE TREATING PHYSICIAN CERTIFIES TREATMENT IS COMPLETED AND FUTURE MEDICAL SERVICES WILL NOT BE REQUIRED

Published on October 4, 2011 in Uncategorized. Closed Tags: , , , , , .

In a recent memorandum, CMS issued its first guidance with respect to the use of Liability Medicare Set-Aside Arrangements (LMSA) amounts related to liability insurance settlements, judgments, awards, or other payments (“settlements”).  CMS advises that where the beneficiary’s treating physician certifies in writing that treatment for the alleged injury related to the liability insurance settlement has been completed as of the date of the settlement and that future medical items and/or services for that injury will not be required, Medicare considers its interest, with respect to future medicals for that particular settlement, satisfied.  Further, CMS provides that when the treating physician makes such a certification, there is no need for the parties to submit the certification for review and approval.  Therefore, the parties can rely on such certifications to demonstrate that Medicare’s future interest has been considered and satisfied. 

While the scope of the memorandum is limited to cases where a treating physician is able to opine that no future injury-related care is needed, the memorandum serves as the first official notice regarding CMS’s position on the use of LMSAs.

Click here to view the memorandum.

LOUISIANA DISTRICT COURT DETERMINES SET ASIDE AMOUNT TO PROTECT MEDICARES INTERESTS

Published on January 14, 2011 in Uncategorized. Closed Tags: , , , , , .

After an evidentiary hearing, the United States District Court for the Western District of Louisiana recently determined the amount of future medical expenses to set aside from settlement proceeds in order to protect Medicare’s interest in compliance with the Medicare Secondary Payer Act, 42 U.S.C. 1395y.  In December of 2009, David Wayne Benoit became disabled when he injured his back and hip in an accident while working aboard a towboat.  Due to Benoit’s status as a seaman, Big R Towing paid maintenance and cure benefits under the general maritime law.  Benoit’s doctors agreed that Benoit needed back surgery and one of his doctors recommended he undergo a left hip replacement.  Big R Towing filed a declaratory judgment on the issue of whether maintenance and cure was owed for the recommended left hip replacement.  Benoit filed a counterclaim seeking damages under the Jones Act, 46 U.S.C. § 688(a), which allows seamen to bring actions against ship owners for negligence. 

At a settlement conference, the parties agreed to settle the case for $150,000.00.  Because Benoit was receiving Social Security disability benefits, as part of the consideration for the settlement, the parties agreed that Benoit would be responsible for protecting Medicare’s interests under the Medicare Secondary Payer Act.  The parties made an oral motion for the court to determine Benoit’s future medical expenses in order to set aside funds to protect Medicare’s interests.  With the consent of the parties, the court held a hearing in open court in which health care providers testified regarding Benoit’s future medical expenses.

In an opinion and order dated January 5, 2011, the court found that the settlement amount represented a reasonable compromise to avoid the uncertainty and expense of trial.  Based on information provided by the health care providers, the court determined that Benoit’s future medical expenses arising out of the December 2009 accident were $52,000.00 – $32,000.00 for the back surgery and $20,500.00 for a left hip replacement and that the medical expenses would not materially change if Benoit opted not to have surgery on his left hip and, instead, sought palliative treatment. 

In concluding that the parties “have reasonably considered and protected Medicare’s interests in the settlement of this matter,” the court held that Medicare was a secondary payer to the extent Benoit incurred Medicare-covered expenses, in the past or in the future, arising out of the accident and injuries alleged in the lawsuit.  Further, the court concluded that Benoit was obligated to reimburse Medicare for all conditional payments made before settlement and all medical expenses submitted to Medicare before the date of the order.  Since it was “reasonably expected” that Benoit may become a Medicare beneficiary in the future, the court ordered Benoit to set aside $52,500.00 to protect Medicare’s interest as the secondary payer for future medical expenses arising out of the injuries alleged in this lawsuit.

Date of Decision: January 5, 2011
Big R Towing, Inc. v. Benoit, et al., No. 10-538, 2011 U.S. Dist. LEXIS 1392 (W.D. La. Jan. 5, 2011).