LMSAs: Is 2018 the Year?

June 2018

As we enter into the second half 2018, the anticipation surrounding reform of Medicare Set-Asides (MSAs) in liability and no-fault claims is growing. However, recent discussions by CMS reveal that it is not likely any formal process will be adopted soon. Over the last nearly 20 years, The Centers for Medicare and Medicaid Services (CMS) has provided a number of guidelines, thresholds, and policies for navigating the MSA process in Workers’ Compensation claims. However, the same has not been formalized for liability and no-fault claims … yet. All signs seem to point to potentially big changes for Liability Medicare Set-Asides (LMSAs) in the near future. Or at least in the future.

What are these signs of change? Initial rumblings of the formalization of the LMSA process started back in 2016. At that time CMS announced intentions to plan a series of town hall meetings to address reforms. Then, CMS advised Medicare and its contractors, effective October, 2017, to begin rejecting medical claims submitted post-resolution of a liability settlement on the basis the claims should be paid out of an LMSA. In concert with its search for a new set-aside review contractor in 2017, the CMS “job posting” requested the contractor provide review of liability and no-fault MSA submissions in addition to workers’ compensation MSAs. The amount of the contract with the new reviewer was purported to be more than 10 times the dollar amount received by the previous contractor. Speculation loomed that the large increase in the contract value signaled an increase in the expected workload if/when voluntary submission thresholds were added for Liability and No-Fault MSAs.

The most recent posting on this issue submitted by CMS is dated October 24, 2017 and entitled “Consideration for Expansion of Medicare Set Aside Arrangements.” In that posting, CMS stated that it “continue[d] to consider expanding its voluntary MSA review process to include Liability insurance (including self-insurance) and No-Fault insurance MSA amounts. CMS will work closely with the stakeholder community to identify how best to implement this potential expansion of voluntary MSA reviews.” However, on June 5, 2018, CMS met with the “stakeholder” group Medicare Advocacy Recovery Coalition, and according to reports, CMS informally backed away from any specific timeline to develop or announce a formal LMSA program.

We continue to monitor this issue closely and will provide further updates as they are received. In the interim, continue to be mindful of Medicare’s potential interests in any liability case where future medical treatment or considerations will be addressed when resolving the case. Remember that no matter the thresholds, memoranda, or guidelines, Medicare’s interests, as a secondary payer must be considered. If you have any questions, you can always reach out to one of the attorneys in the BCM Medicare Compliance Department.