On September 30, 2011, CMS, for the first time, issued guidance on the use of Liability Medicare Set-Aside Arrangements (LMSAs) related to liability insurance settlements and judgments (the Guidance)1. The absence of any formal direction from CMS on the handling of LMSAs has been a significant hindrance in settlement discussions, and even though this Guidance is relatively limited, it is nonetheless helpful.
The Guidance specifically addresses situations in which the Medicare beneficiary's treating physician has certified in writing that treatment for an alleged injury or illness at issue has been completed and that no future medical treatment will be required. The Guidance instructs that where such a certification exists, Medicare considers its interest with respect to future medicals to have been satisfied. CMS has indicated that there is no need to submit the certification or a proposed LMSA to CMS for review. In addition, CMS will not provide parties to the settlement with any confirmation that Medicare's future interests have been satisfied. Parties must instead rely on the physician certification.
The Guidance does not address situations in which no certification is present or where future medicals are contemplated. It suggests, however, that LMSAs are required in liability settlements where the claimant will need continued treatment for the underlying injury or illness. Similar to workers' compensation, this may be the beginning of a series of CMS guidance memorandums on the use of LMSAs.
In addition to the Guidance, CMS posted a number of MSP Alerts on September 30, 2011, addressing the following topics, which can be found at www.cms.gov/MandatoryInsRep:
- Extension of Section 111 reporting deadlines for settlements under $100,000
- Guidance on exposure, ingestion, and implant liability insurance cases and the December 5, 1980, threshold date
- Guidance on the limited Section 111 reporting exception related to Qualified Settlement Funds.
Cozen O'Connor has significant experience in helping clients comply with the MSP Act and the Section 111 reporting requirements, including the information that must be reported, how information is to be reported, and the impact of the reporting and other MSP requirements on settlements. Please contact us if you would like additional information regarding the new LMSA Guidance or help in complying with the MSP Act's requirements.
Footnote
1 The Guidance can be found at www.cms.gov/COBGeneralInformation/ Downloads/FutureMedicals.pdf .
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