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Medical Malpractice compensation claims.”

(Barbara Wright, CMS' Acting

Director of the Division of Medicare Debt Management, 2/25/2010, 12:00 p.m., Town Hall Teleconference www.cms. gov, NGHP transcripts) (Note: Complete copies of all town hall teleconference transcripts referenced in this article can be located at On March 16, 2010, during another Town Hall

Teleconference, Wright stated the following as it pertains to set asides in the context of liability claims:

As we’ve said on many calls, CMS has formalized

processes to review proposals for workers’ compensation, Medicare set aside amounts. It does not have the same formalized process for liability Medicare set aside arrangements…We have a process

for an informal

process on the liability side that if a plaintiff ’s attorney or insurer, etcetera, wishes to approach the appropriate CMS regional office and the regional office has the ability to do so workload or otherwise, that they can choose to review a proposed set aside amount if they believe there is significant dollars at issue. (03/16/2010, 12:00 p.m., Town Hall Teleconference,, NGHP Transcripts.)

On February 23, 2009, CMS released an alert which

stated, "Te new Section 111 requirements do not change or eliminate any existing obligations under the MSP statutory provisions or regulations." (CMS Alert, 2/23/09, www.cms. gov, CMS Alerts). Medicare representatives have also stated (in one of several town hall teleconferences) that while Plaintiffs are encouraged to consider using set asides in liability settlements where there are substantial future damages in play, for which one may easily account, there is no language

requiring such actions. (03/16/2010, 12:00 p.m., Town Hall Teleconference,, NGHP Transcripts) While the statements referenced above (made during

town hall teleconferences) are not considered a legally binding authority, they can be viewed as subjective evidence that Medicare has not changed its’ stance on set-asides in liability claims. Tis sentiment seems to be reflected by the absence of new statutory language, and the absence of the issuing of formal memoranda by Medicare addressing a requirement for set-asides and liability claims. In 2001, Medicare formally acknowledged set-asides in worker’s compensation claims in the “Patel Memorandum.” After this, several other formal memoranda were issued by Medicare addressing set-asides in worker’s compensation claims. No such memoranda have been issued for set-asides in liability claims. Te conundrum that continues to plague many of us is that the statutory language for set asides in worker’s compensation claims is identical to the language pertaining to set asides in the context of liability claims:

In general, payment under this section may not be made, except as provided in subparagraph (B), with respect to any item or service to the extent that (i) payment has been made, or can reasonably be expected to be made, with respect to the item or service as required under paragraph (1), or

(ii) payment has been made or can

reasonably be expected to be made under a workmen's compensation law or plan. 42 U.S.C. §1395y(b)(2)(A) (i) and (ii).

Tis duplicative language was acknowledged by Wright

during a town hall meeting where the subject of set asides in liability claims was addressed. After touching on this linguistic similarity, she then acknowledged the practical difference between the two types of claims.


that Medicare has a formal system for reviewing set aside in worker’s compensation claims, while no such formal system exists for liability claims. (03/16/2010, 12:00 p.m., Town Hall Teleconference, www.cms. gov, NGHP Transcripts.) Once again, while not a legal authority, her statement does reference the obvious: presumably an entity cannot detect and evaluate claims when there is no system in place to do so.

18 Trial Reporter / Summer 2010

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