The United States District Court of New Jersey recently stated (albeit in an Unpublished Opinion) that Federal Law does not mandate Medicare Set-Asides in a liability context. The question arose in Sipler v. Trans. Am. Trucking Inc. following a general settlement for $225,000. After the verbal settlement the defense attorney attempted to insert language stating:
- The plaintiff cannot claim reimbursement from Medicare for healthcare arising out of the sued-for claim;
- His health insurance will not pay for healthcare arising out of the sued-for claim because those injuries are pre-existing; and,
- Medicare will not pay for future treatment and healthcare arising out of the sued-for claim.
The defendant’s first argument requiring a Liability Medicare Set-Aside comes from CMS’s September 2011 Memorandum where it stated, “[a]ll parties do have significant responsibilities under the MSP to protect Medicare’s interests when resolving cases that [include] future medical expenses. A recommended method to protect Medicare’s interest is a set-aside arrangement…” (Emphasis in Original). The court noted, “however, it is well-settled that ‘[i]nterpretations such as those in opinion letters-like interpretations contained in policy statements, agency manuals, and enforcement guidelines … lack the force of law…’ ” Citing Christensen v. Harris County, 529 US 576, 587 (2000).
Next, the court very clearly stated what would eventually become its holding:
Indeed, no federal law requires set-aside arrangements in personal injury settlements for future medical expenses.
What makes this decision most interesting is that it came after the Federal Register’s Advanced Notice for Proposed Rulemaking regarding Liability Medicare Set-Asides (LMSAs). In the end, the Court enforced settlement without the three terms discussed above. But our main takeaway from this case is the Court specifically stating there are no federal laws requiring LMSAs.
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