Early v. Carnival Corporation - Florida District Court Refuses to Issue Advisory Opinion on Liability Medicare Set Aside Necessity

Posted date in Jason D. Lazarus Medicare Set Asides

In Early v. Carnival Corporation, a Florida Federal District Court was asked to determine whether a Medicare Set Aside was required.  Early filed suit against Carnival after allegedly being injured while a passenger on one of Carnival’s ships.  The case was set for mediation and settled subject to two conditions.  The conditions were that the court retained jurisdiction to enforce the terms of the settlement and to determine the issue of a possible Medicare set aside if any.  Post mediation, Early filed a Motion for Determination of Whether Medicare Set Aside is Required.  In the motion, the terms of the mediation agreement were outlined which included that the “parties disagree on whether a Medicare Set Aside (“MSA”) is required in tier settlement agreement, but agree to submit he issue for the court to decide.”  In Early’s petition, it was argued an MSA was not required. 

In the decision, the court examined the Medicare Secondary Payer Act and recognized that one method to comply with the MSP is to create a set aside arrangement.  The Court cited an article by David J. Berg and me to support that idea. The court did recognize that the question of “[w]hether the MSP applies to every tort settlement, thus likely requiring an MSA, is a question that confounds practitioners and litigants.”  The court went on to address what constitutes a settlement under Florida law.  Then the court turned to its analysis of the legal principles as applied to this case.

The issue to be addressed as stated succinctly as the “parties cannot agree on a settlement term and are requesting the Court to fill in that term for them or offer an opinion on the MSP’s legal requirements for guidance.”  In reviewing other decisions regarding set asides, the court found they fell into two scenarios.  The first category was cases where the parties have a settlement agreement and agree on the necessity of a set aside but can’t obtain approval by CMS of the MSA arrangement.  There are several cases where courts have “approved” a set aside where CMS was unwilling to review and approve one for the parties.  The second category was cases where the parties have a settlement agreement but disagree as to whether the settlement agreement’s terms includd the creation of an MSA.  In the instant case, the court found that it didn’t fit into either category and the parties were essentially asking for an advisory opinion or insert a term of settlement.  The court held that the parties request had to fail because the Court can’t create terms for the parties’ private settlement agreement or render advisory opinions. 

Ultimately, the Court found that there was in fact no settlement at all.  By virtue of the parties submission of this critical term of the purported settlement to the court was evidence that there was no meeting of the minds or settlement.  It is an unfortunate result as I am quite sure the parties really wanted to settle the matter.  Ultimately I presume they will and simply submit a post settlement motion to approve the MSA amount since CMS will not review a liability Medicare set aside emanating from Florida.  The Atlanta regional office that reviews cases from Florida refuses to review liability Medicare set asides.