CMS Issues First Guidance for Liability Medicare Set-Asides

On September 30, 2011, the Centers for Medicare & Medicaid Services (“CMS”) issued its first guidance about the use of Liability Medicare Set-aside Arrangements (“LMSAs”). This one page document provides information about the propriety of an LMSA when a treating physician has opined about a claimant’s future injury-related care needs. This memorandum also serves as CMS’s first attempt to address the key questions surrounding LMSAs.

The memorandum advises that when a treating physician opines in writing that a claimant will not require any future injury-related care as of the date of claim resolution, then CMS considers its future interest to have been fully considered and satisfied. If that claimant resolves subsequent claims, the treating physician must provide another certification as of the date of that subsequent resolution. Furthermore, when a treating physician makes such certification, there is no need to submit the MSA proposal / certification to CMS for review and approval as CMS will refuse to review any such submission. Instead, the parties can rely on the certification from the treating physician, and should use that certification to document their files and memorialize the fact that Medicare’s future interest has been considered and satisfied.

The scope of this memorandum is limited to cases where the treating physician has opined that no future injury-related care is needed post-resolution. It does not contemplate cases where the parties have no such certification from the treating physician. However, with this memorandum, CMS has provided the first formal indications that there are rules surrounding the use and propriety of LMSAs. Parties can no longer rely on the fact that CMS has never issued guidance regarding LMSAs. Therefore, parties should have a formalized process in place for the review of LMSA issues as part of its formalized process for addressing other Medicare Secondary Payer issues (conditional payment reimbursement and MMSEA Section 111 reporting). GRG’s recently updated MSA White Paper provides the recommended means by which to be compliant on the LMSA issue.

The Garretson Resolution Group continues to monitor LMSA developments, and will report any future developments to the settlement community. For more information about this memorandum and other Medicare Secondary Payer compliance services, including conditional payment reimbursement, MSA services and MMSEA Section 111 reporting, please see www.garretsongroup.com. To view the memorandum in its entirety, please click here.