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In early 2017, the Centers for Medicare & Medicaid Services (CMS) announced a change in its policy regarding Medicare Set-Aside arrangements for recipients of liability or no-fault insurance benefits. Beginning on October 1, 2017, recipients of settlements from liability or no-fault auto insurers who are insured by Medicare could be forced to pay medical bills out of pocket if CMS determines that they should have used a Medicare Set-Aside to pay for their treatment.
Under Medicare Secondary Payer (MSP) law, Medicare will not cover medical expenses for an insured individual if that person’s care should be paid for by another insurer or responsible party, labeled as the “primary payer” on those claims. For example, if you’re injured on the job and are receiving workers’ compensation benefits, the costs of care related to your workplace injury should be paid for by those benefits first. When workers are paid a settlement after an injury on the job, they must create a Medicare Set-Aside Trust to ensure that the funds for their treatment are preserved.
CMS also required that healthcare expenses stemming from accidents that were not work-related be paid by settlement funds, rather than Medicare. Under the change announced in February of 2017, CMS announced that it would establish a review process of set-aside accounts for liability claims, similar to the review process it uses for workers’ compensation set-aside accounts.
This change in the law could have serious consequences for accident victims who are currently recipients of Medicare or who are anticipated to become Medicare recipients in the near future. If claim settlement recipients don’t create a set-aside account to pay for their past and future medical treatment after they receive a no-fault or liability settlement, these accident victims may be forced to pay out of pocket for any medical expenses related to the accident, should their doctor’s claim billed to Medicare be rejected.
There is still some uncertainty regarding how large these Liability Medicare Set-Asides or No-Fault Medicare Set-Asides should be. If you’re a Medicare recipient or are nearing the age of Medicare eligibility and you anticipate receiving an injury settlement, speak with an experienced Medicare Set-Aside creation attorney before you settle to make sure that you’ve taken all necessary steps to comply with the laws.
For assistance with Florida long-term care planning, asset protection, or Medicare Set-Aside creation, contact the experienced and knowledgeable West Palm Beach elder attorneys at Shalloway & Shalloway, P.A. for a consultation, at 561-686-6200.