A Formal Review Program for Liability/No Fault MSAs Is Back

As anticipated, implementation of a formal voluntary Liability Medicare Set-Aside (LMSA) and No-Fault Medicare Set-Aside (NFMSA) review program is at the forefront once again. A proposed rulemaking,  Miscellaneous Medicare Secondary Payer Clarifications and Updates, has been posted by the Office of Management and Budget, which states that A Notice of Proposed Rulemaking (NPRM) will be issued by September 2019.

Rule proposed to fill gap

This proposed rule indicates that at the present time Medicare does not provide its beneficiaries additional choices or an opportunity to secure a method that will fit their individual circumstances while protecting the Medicare Trust Fund. Currently, Medicare acknowledges that it does not offer beneficiaries  guidance to help them select how their related future medical expenses, otherwise reimbursable by Medicare, will be handled after they receive settlements, judgments, awards, or payments following automobile and liability insurance (including self-insurance), no fault insurance claims. The proposed rules provide an option available to satisfy Medicare Secondary Payer (MSP) obligations.

Background

You may recall that in 2016, after the release of the initial request for proposal (RFP) for a new Workers’ Compensation Review Contractor (WCRC), a review process for LMSAs and NFMSAs was in the planning stage. Later in 2016, the Centers for Medicare & Medicaid Services (CMS) confirmed plans for a formal review process. Again, in October of 2017, CMS issued an alert keeping plans alive in regard to expanding the review of voluntary Medicare Set-Asides (MSAs) to include LMSAs and NFMSAs. It seems that, the new WCRC, Capitol Bridge LLC, has a contractual obligation to bring the expanded review process to fruition.

Questions about stakeholder involvement

CMS has indicated all along that this effort would involve the MSP stakeholder community. However, how this process will contrast with the current WCMSA review process remains to be seen. With the proposed rulemaking notice, we expect to find out more as to how LMSAs and NFMSAs will be implemented.  Some of the consideration will be claims with contested liability exposure, comparative and contributory negligence defenses, limited policy limits and/or statutory caps on damages. Obviously, any proposed formal review program that does not include these nuances and apportionment factors will potentially create more issues. Hence the reason for the deliberate delays by CMS.

While we acknowledge the statutory obligation to ensure Medicare’s secondary payer status, we anticipate some obstacles during the proposed rulemaking process. Nevertheless, we are ready for the new challenge and encourage all to revisit their current policies and procedures used in preparation for what is to come.

We offer these suggestions while we participate in this process:

  • Ascertain your risk tolerance when a Medicare beneficiary will need related treatment long term.
  • Query and identify the liability and no-fault claims for which Medicare’s interests should be considered.
  • Train your teams to make MSP connections when comparing Medicare beneficiary claimants to those claimants who continue to treat.
  • Complete an analysis for each identified claim considering the comparative and contributory negligence defenses using limited policy limits and settlement values as a ceiling.
  • Be sure conditional payments are addressed well before settlement.

Optum Workers’ Comp and Auto No-fault stands ready to assist you with all your MSP compliance needs.

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