Medicare Set Asides And Their Application To Liability Litigation

The Medicare Secondary Payor Act ("MSPA") defines the federal government's rights to recover benefits it has paid in the past or may reasonably be expected to pay in the future as a result of injuries for which claimants are involved in litigation. The MSPA provides the federal government with subrogation rights for all amounts paid in the past and requires the plaintiff to establish a Medicare Set Aside to protect Medicare from the payment of future benefits. The MSPA includes stringent reporting requirements for defendants involved in litigation with plaintiffs who are, or may potentially be, Medicare recipients. The federal government has a cause of action for double damages against the attorney representing the plaintiff and the settling defendant for violations of its requirements. This newly revised legislation is wreaking havoc with many corporate defendants as they attempt to navigate through the key provisions and requirements. As they do so, corporate clients