Movement in the MSP Compliance Realm? Update on Liability and No-Fault Medicare Set-Asides

July 9, 2017

In a previous Industry News Bulletin, we noted that CMS seemed to be taking affirmative first steps on Liability Medicare Set-Aside Arrangements (LMSAs) and No-Fault Medicare Set-Aside Arrangements (NFMSAs). Since the time of that writing, we have seen a few revisions to the change request notice provided to Medicare Administrative Contractors (MACs). The most recent revision to the change notice was released on June 8, 2017. This change request issued by the Centers for Medicare and Medicaid Services (CMS) to its contractors continues to outline a timeline for back-end technical changes to modify Medicare’s Common Working File (CWF) to address LMSAs and NFMSAs.

What does this change request say?

The change request indicates CMS will establish two new set-aside processes, one for LMSAs and one for NFMSAs. It instructs the contractors of the policies, procedures, and system updates required to create and utilize LMSA and NFMSA record in the CWF, similar to Workers’ Compensation Medicare Set-Aside Arrangements (WCMSAs). The notice further instructs the MACs and shared systems when they must deny payment for items or services that should be paid from an LMSA or NFMSA fund.

What does this tell us about CMS’ LMSA and NFMSA policies?

As we indicated in our previous post, these change request announcements tie future LMSA and NFMSA policies directly to the Medicare Secondary Payer statute found at 42 U.S.C. §1395y(b)(2). Additionally, these change requests capitalize on recommendations made by the Government Accountability Office (GAO) in an April 2012 report.

While it has taken five years for CMS to take steps once again toward LMSAs and NFMSAs, (and despite CMS’ intent to work with the stakeholder community to identify how best to revisit LMSAs, including the review process) it seems administrative efforts are underway and that stakeholders have not been included.

What can we expect from here?

Industry stakeholders continue to apply pressure on CMS to allow input on the process that seems to be underway. Given CMS has not yet allowed stakeholders to have a voice in this process, we are left to speculate on what may occur this fall. At a minimum, we know MACs will deny payments for care related to a workers’ compensation, liability, or no-fault claim where there is evidence the parties settled and funded an MSA. Claimant beneficiaries will be forced to expend funds from their MSA accounts until they are appropriately exhausted. Outside of that, it remains to be seen if CMS intends to release a memorandum on LMSAs and NFMSAs, including information on a review process to be undertaken by any new MSA review contractor.

Please remember that the decision as to whether and when to get any MSA, including an LMSA or NFMSA, remains 100% voluntary. And if one opts to obtain an MSA for an injury case, participation in CMS’ review process remains 100% voluntary as well. Reasonable minds can and do differ on how best to consider and protect parties’ interests as they relate to future medical care at the time of settlement.

ExamWorks Compliance Solutions works with clients at all risk levels to help consider parties’ and Medicare’s interests and to protect those interests, if warranted. We are willing to partner every step of the way and at all risk levels to help you find a way to reasonably and in good faith comply with the MSP statute, regulations, and memoranda with whatever product makes the most sense to account for reasonably expected future medical care. We will continue to follow any announcements from CMS on this important topic. Should you have any questions about this announcement or CMS’ policy regarding LMSAs and NFMSAs, please contact your ExamWorks representative.