Why Are MSAs “Required”?
On December 5, 1980, the Medicare Secondary Payer Act extended Medicare’s secondary benefit payer status to liability claims. The Medicare Secondary Payer Act assures that Medicare will always be the secondary payer whenever payment has been made, or can reasonably be expected to be made, under a Worker’s Compensation policy or liability insurance policy(including self-insured plans). While these laws have been in place since 1980, very little enforcement of the statute occurred until budget concerns surrounding Medicare’s longevity surfaced. As a result, in July 2001, CMS began publishing a series of policy memoranda that discussed the use of Medicare Set Asides in Worker’s Compensation cases. It is based on these CMS policy memoranda, when read in conjunction with the Medicare Secondary Payer Act and the affiliated federal regulations, that Medicare Set Asides are “required”.
