Top 5 Reasons supporting the creation of a Liability Medicare Set-Aside (LMSA)

Medicare Set-Aside Blog on August 4, 2010 | Posted by

1. The statute clearly identifies that Medicare is to be a secondary payer. So absent an MSA how do the parties comply with the law?

2. MMSEA reporting is not just to identify past payments. It will also be used to make sure future payments are not made. Absent an MSA the claimant is barred from Medicare coverage for injuries related to the settlement up to the entire amount of the settlement.  A reasonable MSA should protect against that occurrence

3. CMS has hired people to review what they term LMSAs. Did they do that for no reason or are the collecting information about liability settlements to issue formal guidance? CMS has acknowledged in many forums the appropriateness of LMSAs despite not issuing a memo.

4. I have firsthand knowledge of liability claims that were settled and apportioned via MSA. Post settlement bills were mistakenly sent to Medicare and denied. When the established MSA was exhausted, Medicare assumed primary payment liability despite the MSA being heavily discounted for liability issues.

5. Despite any legal defenses you may or may not have, CMS routinely makes unreasonable demands that are not supported by the law. If you are going to defend against their claims in the future, it is better to have you defense laid out in the settlement agreement and place the burden of proof upon CMS to demonstrate how you did not comply with the statute.

Plus it is just a reasonable position to take.

I had an interesting conversation with a very sophisticated VP of claims yesterday. She said the liability industry is embracing the “no MSA” concept because that is what they want to hear. I think that will prove to be an incorrect strategy.

Ryan