Court Addresses Adequacy of MSA when Awarding Future Medicals in Liability Suit

In Tucker v. Cascade Gen., Inc., 2014 U.S. Dist. LEXIS 160265 (D. Or. Nov. 13, 2014), the Plaintiff, an employee of Cascade General, was injured while cleaning a ship owned by the United States. The Plaintiff filed a workers’ compensation claim against his employer, as well as a third party negligence action against the United States under the Longshore & Harborworkers’ Compensation Act. Tucker settled his claim against his employer, however, his claim against the United States went to trial.  At trial, Tucker requested an award of $614,341.00 for future medical expenses.  Tucker presented a life care plan and testimony from his treating physicians, among other evidence, in support of his request for the future medical award. Notably, CMS had approved a Medicare Set-aside in the amount of $334,840.00 for Tucker’s work injury. However, Tucker presented evidence  that much of his future treatment would not be covered by Medicare and thus, is not reflected in the CMS-approved Medicare Set-aside amount the same way as it is in the life care plan. In addition, Tucker argued that the MSA was calculated using the discounted rates which a longshore insurance carrier would pay and that there is no guarantee he would receive those rates.  The Court agreed with Tucker finding that “[t]he fees and charges set forth by the MSA do not provide a fair and comprehensive projection of the costs Tucker will incur for medical services over the course of his life” and awarded future medical costs of $614,341.00, the amount proposed in the life care plan.  
                                             
Interestingly, the government asked the Court to use the future treatment cost projected by the MSA (which CMS approved), but for the cost of medications, however, the government requested that the life care plan be used.  The Court notes that the United States was “selective in its use of [the MSA] as a ‘supportable methodology’ and providing ‘concrete evidence’ of costs.” 


This decision addresses a concern shared by many injured workers who are paying for their medical expenses with funds from a Medicare Set-aside.  According to Medicare’s guidelines, injured workers should be certain that no amount in excess of the applicable workers’ compensation fee schedule is paid from the MSA for medical treatment; however, there is no guarantee that the injured worker will receive the same discounted rate for services. Instead, injured workers must negotiate for the best rates at the time of service.