Restatement of the Obvious

Medicare Set-Aside Blog on May 26, 2011
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With CMS taking hits from all levels of the judiciary of late, it is surprising that it issued a WCMSA memo that says nothing new.  On May 11, 2011, CMS issued its 15th memo in a series starting in July 2001 outlining the requirements for its voluntary review program for reviewing future medical cost evaluations of Medicare beneficiaries that meet certain criteria. After a decade, these program directives continue to be viewed by a very large portion of the legal and insurance communities as legal requirements, which they are not and has never been despite innuendos in its previous memos to the contrary, and therefore this memo must be directed at them. Given the exponential increase in litigation involving MSP issues, much of which is never heard on the merits of the claims due to sovereign immunity or subject matter jurisdiction, CMS may finally be prepared to cease with its scare tactics and start dealing with the legal challenges we have been raising for the past ten years.

What you really need to take away from this memo is that this is not a victory in any way. This is not a new position of CMS, just the first time that it has been articulated for the general public since the inception of the program. It was not until 2005, when sued by Protocols, that CMS first articulated the voluntary nature of the WCMSA review program in an affidavit defending its policies in the WCMSA review program.  Right or wrong, CMS stated that if you want its opinion as the to the adequacy of the future medical allocation from an insurance settlement, that you would be doing so on the terms dictated by its policy memos. The agency continues to reiterate that position in MMSEA town hall teleconferences. All that you need to do is accept that the things that you object most to in the WCMSA opinions that you obtain represent the inherent cost of obtaining that approval letter with the carrot sometimes comes a stick. You by choice overfund your MSP risk in exchange for CMS’ statement that it will not hold you accountable to anything more than the approved WCMSA amount.

While I do not condone many of its practices in the review program, I do acknowledge the difficulty of developing and implementing a program that applies unilaterally across a nation where the underlying law that triggers the MSA obligations differs in each jurisdiction. But for the common element of essentially no-fault coverage for work injuries in all jurisdictions, this program would not have been possible at all and is the likely reason why we continue to not see a similar program for liability insurance (not that the obligation does not exist as many organizations would like us to believe). However, all tolerance aside, what we do desperately need is for the program to reform and adopt a decade’s worth of industry input.  Then where will Medicare be, besides exhausted before 2024? And H.R. 2641 and its like are not the solution.


Memo can be found at: