Medicare Set-asides – Still Not Required in Liability Cases

The old rules were easily understood. Certain workers comp claims required a Medicare set-aside – and the rules for those claims were straightforward. For other claims – liability and no-fault cases – the parties were still required to satisfy Medicare’s interests out of the settlement.

For years, we’ve been told that Medicare set-asides were coming for no fault and liability cases. You’ve been to the seminars. Some attorneys and insurance companies have probably been telling you for years that this is a requirement.

They’ve been wrong. Until now?

As of October 1, 2017, CMS issued new guidance to the Secondary Payer process: MM9893. Sounds ominous, doesn’t it?

The gist of the rule is that CMS will begin to track whether there is a Liability Medicare Set-aside (LMSA) and if there is, Medicare will stop paying for diagnosis codes that should have been covered by the LMSA. Side note – they didn’t do this before? Why the heck not? I thought that was the point of LMSAs, to the extent that they existed. WTH?

The key point to remember is… that’s it. There is NO REQUIREMENT that an LMSA be set up at all. None. All this says is that if there is one, it has to be used before Medicare will pay again. I’m not just making this up – it’s in the guidance and the rule – ” Liability and NoFault MSP claims that do not have a Medicare Set-Aside Arrangement (MSA) will continue to be processed under current MSP claims processing instructions. ”

There has been no statutory change that requires LMSAs. Remember that when someone inevitably misunderstands this minor change.

Of course, don’t kid yourself – that still might happen someday.

(Howard Zimmerle is an attorney practicing injury law in Iowa and Illinois. You can reach him at 309-794-1660 or hzimmerle [at] qclawyers.com)

Illinois Health Care Services Lien Act – New Case

(NOTE that as of 5/21/2015, Stanton v. Rea, discussed below, has been OVERRULED by the Illinois Supreme Court and is no longer good law.)

One of the great tools in a plaintiff lawyer’s arsenal in Illinois is the Health Care Services Lien Act, which reduces the amount of certain medical liens in some cases. It can really help increase the total amount your client ends up with in a settlement.

A new case from the 5th District, Stanton v. Rea, notes that the 40% of the settlement that goes to the medical lienholders should not be calculated until after costs have been subtracted from the settlement. In other words, the Act doesn’t mean 40% of the pie, it means 40% of the pie after costs. In some cases, that can make a big difference.

My partner, Mike Warner, just spoke on some new aspects of the Lien Act at the recent Rock Island County Bar Association Seminar. I think a thorough “how to” post is forthcoming.

(Howard Zimmerle is a personal injury lawyer in the Quad Cities of Iowa and Illinois, helping people who have been injured due to someone else’s fault. He can be reached at 309-794-1660 or hzimmerle [at] mjwlaw.com).

Why We Don’t Allow Lawsuit Loans

It happens every few months. A client needs money, and has a case with me. They contact some company (typically Oasis Legal Finance) who promises to loan them money until they settle their PI or workers comp case. If they settle soon, they won’t owe much interest, they’re told. If they don’t win, they don’t owe anything, they’re told. 

But I won’t let them take the loan. I have to sign off on it, and I won’t do it. Why not?

Simply put, the interest rates are ridiculous. Not 25% credit card ridiculous…. much, much worse.

Yesterday’s New York Times had an article about it with some examples. Anyone read that and still want one of these predatory loans?

(Howard Zimmerle practices personal injury, medical malpractice, nursing home malpractice and workers compensation law in the Iowa and Illinois Quad Cities. He can be reached at 309-794-1660 or hzimmerle [at] mjwlaw.com).