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What's New with Medicare Set-Asides?

Under the Medicare Secondary Payer Act, Medicare is always secondary to workers' compensation and other insurance such as no-fault and liability insurance.

By Rafael Gonzalez | Updated on June 30, 2010

Under the Medicare Secondary Payer Act, Medicare is always secondary to workers’ compensation and other insurance such as no-fault and liability insurance. Accordingly, all beneficiaries must consider and protect Medicare’s interest when settling a case. Centers for Medicare and Medicaid Services (CMS) memorandums mention the creation and establishment of Medicare Set-Asides (MSAs) as an acceptable available method of reasonably taking Medicare’s interests into account regarding future medical expenses related the claimed injury.

Old Thresholds Continue to Apply

Over the last 10 years, CMS has published several memos outlining the specifics of when Medicare’s interest should be considered. Such memos indicate that if the claimant is a current Medicare beneficiary at the time of settlement, Medicare recommends that the settlement and MSA allocation be submitted for approval only if the settlement is for more than $25,000. While Medicare recognizes that there is no statutory basis for the mandatory request, the stated benefit to the Medicare beneficiary is that once an allocation is approved, future Medicare coverage is assured after the approved allocation has been appropriately exhausted.

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