A Medicare Insider’s Clarification on MSA Confusion

According to Section 111 of the MMSEA (Medicare, Medicaid &SCHIP Extension Act), primary payers are to (1) identify the Medicare eligibility status of plaintiffs and (2) report all Medicare beneficiaries to Health and Human Services when there is a settlement, judgment, or award that is taking place in Workers Compensation, Liability, and No Fault claim.  CMS has reiterated that the MMSEA provision does not change or eliminate any existing obligations for the handling of Medicare Set Asides (“MSA”).  It is crucial to understand that the Section 111 MMSEA reporting requirements are a completely separate matter from MSAs.

The misinformation that trial lawyers have received is creating great confusion with regard to what is required under the Medicare Secondary Payer Act (“MSP”) when settling future medical in a liability claim.  Is an MSA necessary or not?  Those entities that have taken the position that an MSA is “required” in liability settlements likely have financial incentives for taking that position.  The only answer regarding whether you have to set up an MSA in liability cases is that there simply are no definitive answers.  With the absence of specific statutory or regulatory language mandating that an MSA be completed in a liability claim, it is left up to the trial lawyer to interpret current law and CMS pronouncements to decide whether it is appropriate to establish an MSA.

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