Articles & Updates

Smith v. Marine Terminals of Arkansas & Amercian Home Insurance Company

by Robert Hinson

This case involved a global settlement of an injury action under the Longshore Act.  A liability suit and workers' compensation claim were filed and a final settlement was reached with the workers' compensation carrier agreeing to waive its lien.  At the time of settlement, the claimant was receiving social security disability benefits and was Medicare eligible.  As a result, the parties determined that a Medicare Set Aside (MSA) would be appropriate.

An MSA contractor was retained and it was determined that a MSA allocation of $14,647.00 would be appropriate.  The proposal was submitted to CMS for review and approval, however, CMS declined to review the proposal citing "workload threshold" reasons.  After CMS declined to review the proposal, the parties filed a joint Motion to Determine Set Aside Amount in the District Court for the Eastern District of Arkansas.

The court granted the parties' motion and determined that the proposed MSA amount of $14,647.00 was sufficient and ruled that the parties had reasonably considered and protected Medicare's interest in arriving at the settlement.

While no broad conclusions can be drawn from one court in Arkansas decision regarding an MSA proposal that CMS refused to review, we can assume that if the parties have reasonably attempted to protect Medicare's potential interest, a court will look favorably on that attempt.