CMS Issues First Memorandum on Liability MSAs

On September 29th, CMS issued its first policy memorandum regarding Liability Medicare Set-Asides (LMSAs). The memo states that where the Medicare beneficiary/Plaintiff requires no future medical treatment, as certified by the treating physician, there is no need for the proposed LMSA to be submitted to CMS. Rather, CMS states that if the parties obtain such a certification, Medicare will consider its interests “satisfied.”

While the memorandum is insightful and a starting point of guidance on MSAs for the liability industry, the memo seems to raise some questions. Should the liability industry now assume that CMS feels LMSAs are the preferred method for protecting Medicare’s interest and be established on liability settlements in which the Plaintiff/Medicare beneficiary does require future medicals?

Additionally, the memorandum speaks to submission of LMSAs to CMS, yet CMS has not yet provided any formal guidance on CMS’ review policies/workload review thresholds with regard to LMSAs. Several Regional Offices have been reviewing LMSAs on a case-by-case basis; however these Regional Offices decline to provide written confirmation of their internal workload thresholds to the public. Should the liability industry also assume that CMS will review and approve LMSAs when the beneficiary will require future medical treatment? As the industry anxiously awaits additional, and hopefully more concrete, guidance from CMS on LMSAs, it appears the memorandum is subject to individual interpretation.

CMS also provided several other updates with regard to liability settlements and upcoming MSP program improvements which were posted on their website on Friday, September 30th. Beginning in October 2011, CMS will implement an option to pay a fixed percentage of certain physical trauma-based liability cases with settlement amounts of $5000 or less.  Detailed information on this option will be posted as an alert, on or before October 21, 2011, on the MSPRC website at

Upcoming improvements to the MSP program, expected within the next 3-9 months, include the following:

  • The implementation of a MSPRC portal, where the beneficiary/representative can obtain information about Medicare’s claim payments, demand letters, and input information related to a settlement, disputed claims, etc.
  • The implementation of an option that allows for an immediate payment to Medicare for future medical costs that are claimed/released/effectively released in a settlement.
  • The implementation of a process that provides Medicare’s conditional payment amount, prior to settlement in certain situations. 

To view the CMS memo click here

To view CMS’ announcement about the upcoming MSP Program changes click here.

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