Medicare Set-Aside Arrangements (MSA) and the new reporting requirements of Section 111 of the Medicare, Medicaid, & SCHIP Extension Act of 2007 (MMSEA) are important elements of the Medicare Secondary Payer Statue as the Centers for Medicare and Medicaid Services (CMS) endeavors to achieve the long-term financial viability of the Medicare system.

The utilization of MSAs has been required for quite some time in workers' compensation claims. MSAs, of course, are the product of a meticulous review of the medical records by trained professionals who are then able to put the totality of the medical circumstances into context and thus to use that as the foundation for a well-reasoned, fair, and ultimately successful submission for approval to CMS. The primary goal of a proper MSA proposal to CMS is to limit the exposure of settlement proceeds to exhaustion on the plaintiff/claimant's future medical expenses. Thus, an MSA will segregate the projection for future, injury-related medical services and prescription drugs of the type covered by Medicare and use the projected costs for such items and services to arrive at a reasonable MSA funding amount. This information, with supporting documentation, is required for any CMS review of a proposed MSA.

Likewise, the prudent approach to fulfillment of Section 111 reporting protocols is to review substantively each of the variable data elements in order to accomplish accurate reporting and thus to diminish potential exposure to ancillary risk issues, separate and apart from the well-publicized civil penalties.