To Be or Not To Be, Appropriateness of LMSAs is Apparently Still in Question

Medicare Set-Aside Blog on April 11, 2011
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The MSP industry continues to debate the necessity of liability MSAs. With MMSEA reporting for liability TPOCs delayed, the concern has certainly wained again as the continuing misconception is that reporting has something to do with MSAs. The only reasonable reason behind MMSEA reporting is that CMS intends to use the information to exclude future treatment and seek reimbursement when necessary. But that still doesn’t say an LMSA, as CMS started calling them, is “required.” 

To further confuse the industry, allow me to share with you this excerpt from a recent response to an LMSA submission we made to the Chicago Regional Office:


Well of course CMS does not require a set-aside – it has no statutory authority to mandate one in liability or workers’ compensation. It has the right to deny payment for related services, it has the right to seek reimbursement for payments it was not responsible for, but it does not have the right to require funding of an inchoate, unknown future expenditure unless and until it makes a payment. 

But if CMS doesn’t require an LMSA, how does it then tell the parties to ensure that money is set aside to pay for those services? Is that not an inferred admission by CMS that it fully expects us to do LMSAs?

Sadly the evasively written letter was the least of my disappointment with outcome of this case. Prior to the letter, a phone call took place in which it is was painfully evident that this particular regional office employee conducting the review wanted the equivalent of a WCMSA funded at what she kept referring to as “actual prices” regardless of the underlying legal issues. When asked for her authority, the response was “that’s just how MSAs are done.” Then the final insult was that they declined to issue an opinion because the individual was not a Medicare beneficiary at the time of review. The letter was dated 3/31 and the copy of the Medicare card provided showed his benefits started on 4/1.

Lesson learned, be careful what you ask for, and most importantly remember that government agencies are apparently exempt from rational behavior.