Did Atlanta Happen to You? Click Here for a Free Case Evaluation
If you are on Medicare, or expect to be soon, this is frequently the reason a settlement takes longer than anyone wants.
The underlying principle is straightforward: Medicare is a secondary payer. Where another source is responsible for injury-related care, Medicare should not be the one paying.
A set-aside is the mechanism for honouring that when a settlement closes out future medical benefits.
Under the Medicare Secondary Payer statute, Medicare does not pay for care that a workers’ compensation or liability settlement was intended to cover.
Without a mechanism, a claimant could settle a claim including future medical care, spend the money, and then bill Medicare for the same treatment — shifting costs to the taxpayer.
A set-aside allocates part of the settlement specifically to future injury-related care. Those funds are spent on that treatment first, and Medicare generally begins paying only once they are properly exhausted and accounted for.
Set-asides come up most often in workers’ compensation settlements that close future medical benefits, particularly where the injured person is already a Medicare beneficiary or has a reasonable expectation of becoming one — for example, an approved or pending Social Security Disability claim.
CMS publishes review thresholds indicating when it will formally review a proposed set-aside amount. Those thresholds change, so current guidance should be checked rather than assumed.
In liability settlements the practice is less standardised than in workers’ compensation, but Medicare’s interest still has to be considered.
Preparing an allocation means projecting future injury-related treatment — often through a specialist vendor — and where CMS review is sought, waiting for a response.
This is regularly the single largest source of delay between agreeing a number and receiving funds, and it is the most common answer to ‘we agreed weeks ago, where is my money’.
It is not optional where it applies. Distributing funds while Medicare’s interest is unresolved creates a considerably larger problem later, including potential loss of Medicare coverage for the injury.
Set-asides sit alongside the workers’ compensation offset that can reduce Social Security Disability payments. Both are affected by how a settlement is worded.
Because SSDI recipients generally become Medicare-eligible after a waiting period, a claimant with a pending SSDI claim frequently triggers set-aside consideration even if not yet on Medicare.
This is precisely why the settlement document deserves attention even when the headline number is agreed — the allocation language drives both issues.
It depends on whether you are a Medicare beneficiary or reasonably expect to become one, and whether the settlement closes future medical benefits. It arises most often in workers’ compensation settlements, and current CMS thresholds should be checked rather than assumed.
Projecting future injury-related care takes time, and where CMS review is sought there is a waiting period. It is commonly the biggest single delay between agreeing a number and receiving funds.
No. Doing so risks Medicare declining to pay for injury-related treatment later and can create repayment exposure. It is a considerably larger problem than the delay it avoids.
Set-aside funds must be used for injury-related care that Medicare would otherwise cover, with proper accounting. Any remaining funds are generally handled according to the arrangement’s terms rather than treated as free money.
See how our attorneys fight for personal injury victims.
Our personal injury attorneys have spent 20+ years fighting for accident victims across Georgia. Your consultation is free, and you pay nothing unless we win.