You may have seen the recent chatter among the Medicare Secondary Payer community that implementation of a formal voluntary Liability MSA (LMSA) and No-Fault MSA (NFMSA) review program is on hold. Some in the industry have even discussed that the program is on hold for another eighteen months. Recall that in 2016, we first blogged about the release of the RFP for a new Workers’ Compensation Review Contractor suggesting that a review process for LMSAs and NFMSAs was in the planning phase, and the program would possibly be in place after July 1, 2018. On June 9, 2016, the Centers for Medicare & Medicaid Services (CMS) officially validated that it was in fact considering implementing a formal review process. On October 26, 2017, CMS once again issued an alert indicating it was continuing to consider expanding the review of voluntary Medicare Set-Asides (MSAs) to include LMSAs and NFMSAs. All of these alerts and notices had an implication that CMS would work closely with the stakeholder community to identify how best to implement this potential expansion. Essentially the last two years as related to LMSAs and NFMSAs have felt like a “ready, set…stop process.” Each action seemed to indicate that CMS was taking incremental steps to creating a formal review process for these MSAs.
One of the clear challenges with liability and no-fault settlements are the various factors that may limit the settlement, such as policy limits, statutory tort caps, negligence rules, pre-existing conditions, case law, and other defenses and aspects that may result in the settlement of a liability claim for less than its full value. Admittedly, any proposed plan, process, or even a formal review program that does not take these factors into account in analyzing the adequacy of medical treatment set aside is going to be fraught with problems. This certainly may be one of the very main reasons for CMS’ delay.
Unlike workers’ compensation cases, there is no formal guidance currently available regarding MSP compliance and liability/no-fault insurance settlements. As a result, confusion surrounding the underlying obligation as related to these settlements and MSP compliance continues to exist. However, the bottom line is that Medicare’s protection as a secondary payer as related to liability and no fault- settlements arose in 1980 under the Medicare Secondary Payer Act; and the message that the statutory obligation exists to ensure that Medicare is secondary has not changed. Moreover, just because CMS creates such a voluntary review program, does not mean that it must be utilized. The recognition of the statutory obligation to ensure Medicare’s secondary payer status is most important.
Therefore, even if a formal voluntary review program will not be implemented for eighteen months, there are protocols and best practices you can implement while we continue to await CMS’ next move. If you already have a plan in place and are currently considering Medicare’s interests in liability and no-fault settlements, we would recommend you take a fresh look at your internal policies during this “holding phase” to ensure that proper protocols are in place to adequately protect Medicare’s interests and attain MSP compliance. If you do not have a plan in effect, there is no better time to make and implement such a plan. We offer the following suggested best practices:
- Establish proper internal protocols to identify the liability and no-fault claims for which Medicare’s interests should be considered in line with your firm or company’s risk management position. Ensure that your team understand these protocols and best practices. Additional training in identifying these claims may be necessary;
- Complete a thorough medical-legal analysis for each claim. This includes addressing the limitations and challenges associated with liability/no-fault settlements on each claim;
- Once you have considered Medicare’s interests, memorialize such efforts in your settlement documents. Documenting all of your efforts to attain MSP compliance is key;
- Don’t forget about the conditional payment and Medicare Advantage Plan component.
Make sure to investigate and address any conditional payments or liens before settlement.
While the rumors of the delayed implementation of a formal review process have not been officially validated, here we are on July 12, still waiting for some notification from CMS; and we will continue to await CMS’ next move with baited breath. We will be sure to update our readers as soon as there is any movement by CMS, or if these rumors really are true… stay tuned.