Are You and Your Clients Compliant?
This month CMS published Matter # MM9893, dated February 3, 2017 with
an effective date
of October 1, 2017, relating to the
implementation of Liability MSAs (“LMSA”) and
No
Fault MSAs (“NFMSA”).
The Notice states that in
order to comply with the Government Accountability Office ("GAO") final report on the Medicare Secondary Payer (“MSP”) Program to improve program effectiveness for
Non-Group Health Plans, CMS will establish two (2) new set-aside processes: a
Liability Insurance Medicare Set-Aside Arrangement (LMSA), and a No-Fault
Insurance Medicare Set-Aside Arrangement (NFMSA). The report was published in
2012 and included commentary
that a set aside program for both liability and
no-fault recoveries was needed. An
LMSA
or an NFMSA is an allocation of funds from a liability or an auto/no-fault related settlement, judgment, award, or
other payment that is used to pay for an individual’s
future medical and/or future prescription drug treatment expenses that would otherwise be reimbursable by Medicare.
CMS has stated the two new set-aside processes, LMSA and NFMSA, will address the policies,
procedures, and system updates required to create and
utilize an
LMSA
and an NFMSA MSP record, similar to a Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) MSP
record. CMS has also instructed the Medicare Administrative Contractors (MACs) to deny payment for
items or
services that should be paid
from an LMSA or an NFMSA fund.
As we have previously noted, CMS has been signaling this change for some time. In publically
posted solicitations for those services, CMS has mentioned the need for administrators to be able to handle LMSAs, as seen with the draft RFP and Statement of Work found online and
publicly available for
viewing at: https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=d3b45cd4fe90079ae5ea f5b2a96b9298&_cview=0.
Parties should note the provision that the contractor would review other non-group health plan set-asides, which would be reviews of
MSAs
on liability cases. The LMSA review would be broken down into full reviews (similar
to what is currently done on workers' compensation MSAs) and a cursory review which would only require that all required documents were provided for an
amount determination to be made.
This was just one of
a series of indications from CMS that they are once again
considering
LMSAs. The first was in May 2016 when CMS released the RFP-CMS-2016-8A-0008 PRE- SOLICITATION notice, which amended the Statement of
Work
to include the processing of other
Non-Group Health Plan Medicare Set Asides Arrangements. This was followed in June when CMS updated its website with
a notice titled: "Consideration for Expansion of Medicare Set-
Aside Arrangements."
The notice states that "the Centers for Medicare and Medicaid Services
is considering expanding its voluntary Medicare Set-Aside Arrangements amount review
process to include the review of proposed liability insurance (including self-insurance) and no-
fault insurance MSA
amounts. CMS plans to work closely with the stakeholder community to identify how best to implement this potential expansion. CMS will
provide future announcements of
the proposal and expects to schedule town hall meetings later this
year. Please continue to monitor this website for additional updates."
Insurers and
attorneys should note that CMS does not need new law to implement LMSAs or NFMSAs. Under 42 U.S.C. Sections 1395y(b)(2) and 1862(b)(2)(A)(ii) of the Social Security Act, Medicare is precluded from making payment when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an
automobile
or liability insurance policy or plan
(including a self-insured plan), or under no-fault
insurance.” MSAs have been used in workers' compensation settlements for nearly 15 years, and
will soon be a
regular consideration in liability and no fault settlements.
The Notice states that Medicare will not pay for
those
services associated with
a LMSA or NFMSA record when the claim’s
date of service is on or
after the MSP effective date and
on or before the MSP termination date. The Notice further instructs the MAC's to deny such claims.
Analyst's Note: We have discussed these coming
changes since last year and have been
preparing our clients accordingly. While others may advocate using the
workers' compensation methodology for a
LMSA, this
is both inappropriate and
costly and is
the legal equivalent of
shoving a
square peg into
a round hole. LMSAs and
NFMSAs should be
approached in
a fashion
that takes into
account the substantial
differences between workers' compensation, liability and no
fault settlements, and established by an
administrator with extensive experience in liability and
no fault cases. CMS has announced a target date of October 1st, 2017. If you would like
assistance in setting up a LMSA or NFMSA compliance program, please
contact us and
we would be pleased to assist you. We can be reached at (734) 433-1670 or cyril@whitehousellc.com
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