Do You Need a Medicare Set Aside in Florida?

June 22, 2017

When settling cases for clients who are Medicare beneficiaries, you may confront questions from adjusters or defense counsel regarding the funding a “Medicare set aside” with settlement proceeds. The purpose of a set aside is to preserve funds for future medical treatment when a settlement includes damages for future medical expenses. In other words, when a Medicare beneficiary is compensated for future medical expenses, Medicare wants that settlement money (and not future Medicare benefits) to be used for future injury related care. The set aside ensures that the settlement is not exhausted before the future medical bills are paid. The issue is evolving, but as it stands in 2017, there is never a legal obligation for plaintiff’s counsel to establish a set aside (feel free to check in with Florida Probate Law group for a timely update).

In a recent case (Aranki v. Burwell, 151 F.Supp.3d 1038 (2015)), a Federal Judge ruled that, “no federal law or CMS regulation requires the creation of a [set aside] in personal injury settlements to cover potential future medical expenses.” At time of writing this article Aranki is the leading case on the issue. There is no case or statute suggesting that Florida injury attorneys have an obligation to create a set aside under any circumstance.

Although there is no legal requirement for funding a set aside, it is a good choice in some instances. Under the Medicaid Secondary Payer Act, plaintiff’s attorneys are vaguely required to consider Medicare’s future interests when resolving claims. Therefore, a Medicare set aside is prudent in cases where (1) there is a likelihood of future medical expenses, (2) future medical expenses were part of the settlement negotiation, and (3) it is likely that those medical expenses will be paid by Medicare. Failing to account for future medical expenses and thereby jeopardizing the interest of Medicare can result in a loss of benefits for the Medicare recipient. If not properly advised on this issue, a client could potentially sue their injury lawyer for malpractice after losing Medicare benefits.

As a best practice, you should get a waiver from Medicare beneficiaries who are receiving a settlement, which explains the effects of the settlement on their government benefits and advises the client about any portion of the settlement that is paid in consideration of future medical expenses. If you need such a waiver, Florida Probate Law Group will provide one free of charge.

To request a waiver, or to inquire about a specific case, contact us at (352) 354-2654 or email Attorney Charles David at cdavid@circuit8law.com.