MSAs and Reversionary Interests
Workers Compensation attorneys know the biggest trend in MSAs has little to do with the MSA itself. That trend, of course, is the reversionary interest that says unused funds will revert to the insurance carrier’s control if the claimant/plaintiff passes away. So what does Medicare think of reversionary interests?
Medicare has no opinion regarding the reversionary interest because that interest means nothing to it. Medicare cares about one thing: the MSA paying for case-related treatment.
If you represent the claimant/plaintiff, you have a few options. First, you can utilize the reversionary interest to your benefit. Second, you can simply fight the reversionary interest. Or third, you can allow it without fighting. You can benefit from the reversionary interest by negotiating on its terms. For example, maybe you’ll accept it, but argue that it creates risk to your plaintiff/claimant, so the indemnity settlement needs to be larger.
There are rules for MSA allocation set-up and administration. Reversionary interests are not part of those rules. Please join MASSIVE’s Chief Operating Officer, Ryan Weiner, for more discussion on MSA rules and regulations at the Kansas Trial Lawyer Association’s annual convention on Friday, December 10, 2021 from 2:30 – 3:30 p.m. (CST). Attendees must register and be a member of the KTLA Workers Compensation Section.