The MSA Double Standard – More Favorable MSA Determinations by Federal Courts
I never realized what an inherently risk adverse group of people lawyers really are. Beyond the “t” crossing and “I” dotting, they always seem to be seeking assurances from anyone willing to give it, otherwise want an or indemnity or hold harmless agreement as a contingency plan. But when it comes to MSAs, they will go to amazing lengths to obtain assurances that the amount allocated for future medicals will foreclose exposure to Medicare recoveries when no one, apparently not even CMS, can make that promise with any degree of certainty. Because CMS states that nothing will limit its recovery other than an adjudication by a court based upon a hearing on the merits of the claim, more and more lawyers are turning to the courts for MSA determinations when CMS approval is not available. Beyond the problem that this causes in burdening our already severely overburdened judicial system, judges are not familiar with CMS protocols, nor are they even consistent among themselves as a group, and therefore all Medicare beneficiaries are adversely affected because everyone is bearing a different level of Medicare protection.
In the case of Frank v. Gateway Insurance, decided this week by the US District Court for the Western District of Louisiana, claimant sustained a lumbar injury in June 2010 necessitating a fusion in July 2011. Parties were able to reach an agreement to settle the claim, with the exception of the MSA. A Motion for Determination of Need for, and Amount of Medicare Set Aside was filed and a hearing took place on January 24, 2012, absent representatives for the United States as it declined to participate. At the hearing, the Court received into evidence affidavits from claimant’s various physicians outlining their opinion for continuing treatment of the lumbar injury. The pharmacist stated in his affidavit that claimant would need between $700 and $1,000 for five to six more months of drugs and the physician projected five to six more office visits at $92 to $186 plus five to six more sets of x-rays, totaling approximately $2,200. The Court found $3,200 to be a reasonable and reliable estimate of future medical costs and ordered an MSA funded in that amount from the insurance payment. For anyone who has ever prepared or seen an MSA approved by CMS, you know that all of those services would be projected over life expectancy so without even looking any further, there is apparent inequity that needs to be addressed here.
Right or wrong, reasonable and reliable or not, the problem with this MSA is that it is inconsistent with EVERYTHING that CMS purports to be necessary in its WCMSA approval program. And I am not saying that CMS’ way is right, let alone reasonable, either. Whether you reach it through the equal protection or due process clause, the US Constitution guarantees all men to be treated equally and that should not vary due to the availability of a voluntary unregulated program administered by a federal agency or lack thereof. Nor should it vary upon the ability to unduly burden the courts and obtain a hearing before a judge who lacks a proper point of comparison against which to measure the evidence presented to him. If CMS is too busy to review all claims, it should at least publish a community standard to be followed equally by all those potentially adjudicating the issue on its behalf. What we shouldn’t have are different outcomes for similar injuries with identical future medical needs based upon the available forum. Unless of course my outrage over this disparity is misplaced, then the only possible alternative here is that people who are injured at work never heal whereas those injured in tort situations apparently do.
To enjoy for yourself the extensive efforts put forth by this magistrate judge to ensure Medicare protected, please read:
WARREN FRANK versus GATEWAY INSURANCE COMPANY, ET AL
CIVIL NO. 6:11-0121
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF LOUISIANA
2012 U.S. Dist. LEXIS 33581
March 13, 2012, Decided
[By the way, interesting discussion of Bradley included therein which disappointingly went nowhere, however is one of the first reported instances of a citation to it so people are trying to get the opinion the recognition it deserves.]