I guess it was inevitable that the specter of the Federal government would cast its shadow upon settlement agreements between plaintiffs and private insurers, especially in these days of the perceived health care “crisis” and ever-expanding Federal entitlement programs.
Since the 1980′s, Medicare has been considered a “secondary” payer, meaning that all other sources of medical benefits were required to be exhausted before Medicare would pay for medical treatment. These primary sources of medical coverage included Worker's Compensation carriers which would have to earmark funds for future medical care in any settlement where the beneficiary was or would shortly become eligible for Medicare benefits.
Prior to 2009, plaintiffs' attorneys did not have to concern themselves with such calculations and were only required to satisfy any Medicare lien for medical benefits paid to the client up to the time of settlement or judgment. Now, depending on the size of the settlement and the age and future medical needs of the client, those days may be gone forever. In the right case ( or wrong, depending on your perspective…) failure to “set aside” adequate funds from a personal injury settlement can have significant negative consequences for the client, and, at the least, a number of pointed questions for the plaintiff's attorney.
Sanctions could include the denial of future Medicare benefits to the client if the Feds believe that monies should have been “set aside” from a previous settlement for the services required at a later date. I can guarantee that no plaintiff's attorney wants to receive the subsequent call from the client seeking answers after their Medicare coverage has been denied.
From a practical standpoint, this problem should not arise from the run of the mill $10,000 auto liability settlement. The concern should be addressed in the cases which are similar to those which have previously required scrutiny in Workers' Compensation cases, ie., those cases involving settlements greater than $25,000 or $250,000 in lifetime benefits where the client is eligible for Medicare within 30 months of settlement. In those cases, knowledge is power ( and safety).
Since this new policy has created a veritable “cottage industry” of Medicare set-aside “specialists”, I will consider employing such an expert to accompany me to mediations involving cases which will attract future government scrutiny – as you see, the private insurer may also be on the hook for failing to insist on the proper “set-aside” account for future medical treatment related to the accident.
The bottom line ?? Medicare has operated as the archetypical bloated bureaucracy for years and there is little chance that this expansion of its responsibilities will prove any different. Regardless, the fact remains that in the appropriate case involving the client who does or will shortly appear on Medicare's radar, the Heyman Law Firm will take the necessary steps to protect both the settlement funds and the client's entitlement to future Medicare benefits which have beeen earned as a result of many years of monthly, and involuntary, income deductions. Great country, huh?