In 2003, the Medicare Act was amended to provide for reimbursement when a Plaintiff received Medicare Benefits for the treatment of his or her injuries related to the negligence of a third party.  As a Federal law, Medicare’s right to recover such payments is given priority over all other rights of subrogation and liens.  Under the law, Medicare can recover from either the Plaintiff, self insured defendant or the insurance company for the Defendant, even if the settlement proceeds have been paid out.  Then in 2007, Congress enacted “MMSEA,” an extension of the Medicare Act requiring insurers and the self-insured to pay personal injury settlements.  
Complicating matters in this process is what, if any, future medical costs are to be paid to Medicare from the settlement.  These are called Medicare Set Asides or MSA.  This has created problems in personal injury litigation as to when to create Medicare Set Asides.  The problem is rooted in the fact that Medicare has failed to provide any guidance as to when and how to create Medicare Ste Asides.  Finally, just recently, Medicare has finally issued a proposal on reimbursing future medical costs or MSAs to Medicare in cases involving liability insurance. The proposal gives seven options for how Medicare believes parties can meet the requirements for reimbursement under the Medicare Secondary Payer (MSP) Act.  The proposal is not law yet and under review.  I hope this is the first step towards the resolution to this very difficult problem. 
Joe Cullen is a Shareholder in Stark & Stark’s Yardley, PA office, specializing in Accident & Personal Injury Law. For more information, please contact Mr. Cullen.