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MSA & MMSEA Section 111 Legal Case- Big R Towing

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Medicare Set Aside and MMSEA Section 111 Legal Cases - Medicare’s “Future Interests” Cases" Big R Towing

Blackburn Group, Inc. MSA and MMSEA Section 111 Legal Cases - Big R Towing, Inc. v. David Wayne Benoit, et al., Civil Action No. 10-538, 2011 WL 43219 (D. W.D. LA, January 5, 2011)

The Big R Towing case involved a Jones Act matter which is treated as a liability claim by Medicare for "future interests" purposes. In Big R, the principal dispute was whether the claimant needed low back surgery and a hip replacement in relation to the alleged accident. The carrier disputed the recommendations for these surgeries on grounds of medical necessity and causation. There were differing medical opinions between the treating physician and the carrier's physician regarding these issues.

The parties eventually reached a settlement of $150,000. At the time of the settlement, the claimant was not a Medicare beneficiary, however he was receiving social security disability benefits (SSD). Given that the claimant was on SSD, and would become entitled to Medicare at some time after the settlement in connection with the SSD award, the parties decided to set aside monies to consider Medicare's future interests after the settlement. The parties requested that the court determine the future medical expenses to set aside "in order for Medicare to remain as a secondary payer."

In this regard, the parties submitted medical evidence to the court which indicated that the claimant's projected future medical costs were approximately $52,500. The court then issued an order, which in part, stated that the parties had reasonably protected Medicare's "future interests", and that the projected sum of $52,500 was adequate for this purpose.

In reviewing the evidence by counsel, the court made various "findings of facts" including that Medicare did not have a policy or procedure for reviewing or providing an opinion as to the "adequacy of the future medical aspect of a liability settlement or recovery of future medical expenses incurred in liability cases."

The court then issued various "conclusions of law" which, in part, included: (1) The parties reasonably considered and protected Medicare's interests as part of the settlement; (2) Medicare is a secondary payer "to the extent that there are Medicare covered expenses incurred by the claimant, in the past or in the future" in relation to the underlying claim; (3) the claimant is responsible for any conditional payments that Medicare may assert prior to, and subsequent to, the court's order; and (4) the sum of $52,500 to be set aside for future medical expenses "fairly takes Medicare's interests into account and the claimant should set aside that amount to protect Medicare's interests as the secondary payer for future medical expenses" related to the claim.

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