Can a Medicare Set-aside be established as a structured arrangement, where payments are made to the Medicare Set-aside on a defined schedule to cover expenses projected for future years?
A64. Yes. However, CMS will approve a payout amount for medical services and prescription drug therapy that would otherwise be reimbursable by Medicare from the Medicare Set-aside in the following manner:1. The “seed money” or initial funding for the Medicare Set-aside must equal an amount calculated to cover the first surgical procedure(s), costs of replacement of durable medical equipment and costs for the first two years of annual medical services and prescription drug therapy.2. The “annual feeds” then are calculated by dividing the remaining Medicare Set-aside funding over the injured party’s life expectancy (or a shorter defined period of time e.g., over the “rated age” if CMS has agreed to a shorter time period) which are then designated as “annual deposits”. These annual deposits into the Medicare Set-aside are to be based upon a set “anniversary date” which cannot be more than one year after the settlement date.
