Medicare set-asides can protect attorneys in settled asbestos cases, attorney advises

Heather Isringhausen Gvillo Sep. 29, 2014, 1:10pm

ST. LOUIS (Legal Newsline) – Just as jury verdicts take medical expenses into consideration in asbestos lawsuits, set-asides for medical expenses can also be important when settling cases, a settlement expert recently said.

Clayton Starnes, Vice President of Business Development of Shapiro Settlement Solutions, discussed settlements in asbestos cases at the HarrisMartin Midwest Asbestos Litigation Conference on Sept. 18 in St. Louis.

Starnes talked about the importance of Medicare set-asides when settling asbestos lawsuits, saying they can “tie up” a settlement if parties don’t get it worked out right away.

When a case is settled, future medical expenses must be taken into consideration as part of the award.

“The purpose of all of this is really trying to carve out future medical expenses,” he said. “What was really awarded for future medical expenses and setting it aside.”

He began by outlining the differences between Medicare set-asides in asbestos Workers’ Compensation cases and liability cases.

While Medicare set-asides are required in Workers’ Compensation cases, they are not necessary in liability cases.

“In (Workers' Comp) cases the rules are black and white,” he said. “But in liability cases, the rules are gray.”

Starnes said Medicare set-asides in Workers’ Compensation cases have to be “blessed,” or approved through a process.

Starnes explained that there are three components of a set-aside - allocation, method of funding the account and method of administrating. In other words, the attorneys must come up with allocations regarding the future of the claimant’s injury, set it aside and treat it as primary.

“Allocation is the documentation used to identify medical diagnoses and the need for future services both related and unrelated to the covered illness or injury,” he stated in his presentation.

Meaning, if a physician provides a document stating no further appointments or medical assistance is needed, then a Medicare set-aside is unnecessary.

As a result, Medicare’s future interests are only needed if the physician determines future care is needed.

The method of funding can range from a lump sum, where a claimant is offered a set-aside in the amount of all future medical bills, or a structured settlement, where a claimant is given a certain amount of money each year to be used for medical bills.

The method of administrating can either be done professionally or self-administered.

Once the Medicare set-aside is completed, Starnes urged attorneys to get documentation showing future medical expenses were considered. That way, if a claimant takes the settlement award and runs off to Las Vegas, the court knows it was beyond the attorney's control.

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