Being creative is always an asset when it comes to liability settlements–cautiously creative that is. Such was the case with Big R Towing v. Benoit, 2011 WL 43219 (January 6, 2011, W.D.La.). Both sides took into account the future medical expenses of the alleged injured party, keeping in mind Medicare’s interests according to the Medicare Secondary Payer Act, 22 U.S.C. 1395y.

David Benoit was a captain aboard a towboat owned by Big R Towing when he allegedly injured his back and hip. Big R agreed to fund a $150,000 liability settlement. Both parties gave the court authority to determine Benoit’s future medical expenses with Benoit setting aside funding from his settlement to pay for those expenses.

A few interesting conclusions were included in the court ruling.

  • Both parties reasonably considered and protected Medicare’s interests in the settlement.
  • Medicare would be a secondary payor of Benoit’s medical expenses.
  • Benoit is obligated to reimburse Medicare all conditional payments prior to the settlement order.
  • Upon the court’s determination, Benoit agreed to set aside $52,500 of the $150,000 settlement proceeds for future medical expenses.

While nothing in the settlement is precedent setting, it should be noted that both parties chose to seek the court’s assistance in adopting the appropriate Medicare Set-Aside (MSA) amount. The court determined that “Medicare does not currently have a policy or procedure in effect for reviewing or providing an opinion regarding the adequacy of the future medical aspect of a liability settlement or recovery of future medical expenses incurred in liability cases.” Until a uniform CMS policy addressing MSAs in liability settlements is in place, Big R Towing shows that the use of the court system to establish MSA amounts can bring these kinds of cases to conclusion in a swift and efficient manner.

For a copy of the court order, go to Big R Towing.