Louisiana Singlehandedly Saving Medicare One Longshore Settlement at a Time

Medicare Set-Aside Blog on September 5, 2012
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The US District Court for the Southern District of Louisiana again made room on its docket to do that which CMS refuses, which this time was to approve a $6,701 MSA in a $785,000 third party settlement. Mind you that the claimant’s treating physicians discharged him from care stating that he did not require any surgery or prescription medications “at this time” and he was also discharged from pain management. However, due to the lack of “certainty” that claimant was absolutely not going to require related treatment in the future, an MSA was prepared. The Gould & Lamb employee designated as the “expert” in the case explained how the MSA evaluation was completed and noted that the appropriate standard would be to consider all reasonably foreseeable medical expenditures. Because the MSA was allegedly not reviewable by CMS, despite LHWCA cases being reviewable, it was assumed to have been prepared as an LMSA. The court, however, noted that the MSA utilized the LHWCA fee schedule. So, if done as a WCMSA, the total settlement from all sources being $785,000 and work comp benefits essentially settled, why again would CMS not review it?

If in fact the MSA would have been acceptable to CMS, as testified to by the expert and referenced in #5 of the conclusions of law, why have we involved the resources of the federal court system to improve Medicare’s long term viability by $6,701? The parties should have simply obtained the MSA and memorialized their understanding and agreement in the settlement documents. And if CMS approval was so important, I am still not convinced that, if painted properly, CMS would have seen it as a LHWCA case anyway and conducted its review. Regardless, let us for a moment consider the expense of all parties involved in obtaining this “definitive judgment” to backstop future CMS exposure. Besides the court’s expenses, there were six attorneys of record listed all billing at an hourly rate and all the associated expenses of expert testimony. It is likely that more was spent on proving that the $6,701 MSA was adequate than was actually used to fund the MSA. And for what? To possibly limit CMS some unknown day in the future to $6,701 in excluded, related, Medicare covered services if claimant ever requires treatment to the same vertebrae again that is not caused by some intervening act.

The overwhelming belief in this country that CMS’ approval is somehow necessary and even valuable is increasingly leading to much unnecessary and expensive legal activity in cases that are otherwise resolvable through agreement of the parties. The parties here all agreed to the MSA as proposed by the “expert;” there was no controversy. If and when the claimant required money to treat in excess of the funded MSA, the parties would have the benefit at that time of the Medicare appeal process to argue their case as to why $6,701 was all that was reasonably foreseeable at the time of settlement. At that time, all of the testimony and evidence admitted would be exactly the same, IF it were ever even necessary because the allocation was questionable enough that CMS elected to take action. Why are we proactively defending ourselves against CMS actions that may never occur, particularly if we are applying its standards of review and otherwise doing everything it wants???

Moral of this story is to have faith in your MSA vendors (and their E&O policies) and move on with your settlements. You do not need CMS’ opinion and certainly not a judicial ruling on the merits of the case to reasonably protect Medicare’s interest in an insurance settlement.

CIVIL ACTION NO. 6:11-cv-0941
2012 U.S. Dist. LEXIS 124690
August 30, 2012