CMS UPDATES NOTICE REGARDING PROPOSED RULEMAKING: WILL LMSAS/NFMSAS BE DELAYED AGAIN?

Liability, MSAs, MSP News on August 6, 2019
Posted by Jean S. Goldstein, JD

In the end of 2018, we reported that the Centers for Medicare & Medicaid Services (CMS) added an item to the Unified Agenda, which is semiannual compilation of information about regulations under development by federal agencies.  The Unified Agenda is published in both the spring and fall.  The item added was a notice regarding an intent to issue proposed rules with respect to satisfying Medicare Secondary Payer obligations, which can be found here.  As we continue to monitor for guidance from CMS regarding Medicare Secondary Payer (MSP) compliance, as related to workers’ compensation, liability and no-fault insurance claims, we noted a recent change.  The 2018 notice was updated with two significant changes, as noted below:

  • All reference to workers’ compensation, liability, and no fault claims has been removed from the abstract of the rule. In addition, the reference that Medicare does not provide beneficiaries with guidance to make choices regarding satisfying MSP obligations has also been removed.
  • 2018 Notice:  This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund. Currently, Medicare does not provide its beneficiaries with guidance to help them make choices regarding their future medical care expenses when they receive automobile and liability insurance (including self-insurance), no fault insurance, and workers’ compensation settlements, judgments, awards, or payments, and need to satisfy their Medicare Secondary Payer (MSP) obligations.
  • 2019 Notice: This proposed rule would ensure that beneficiaries are making the best health care choices possible by providing them and their representatives with the opportunity to select an option for meeting future medical obligations that fits their individual circumstances, while also protecting the Medicare Trust Fund.
  • The timetable date has been changed to October, 2019.
  • 2018 Notice:  Expected timetable action for notice of the proposed rulemaking noted as 09/00/2019.
  • 2019 Notice:  Expected timetable action for notice of the proposed rulemaking noted as 10/00/2019.

Over the last several years, there has been a great deal of hype surrounding liability and no-fault claims, with a focus on whether a voluntary CMS review program would be established, as originally noted in CMS’ Request for Proposal for a Workers’ Compensation Review Contractor (WCRC). [1]
Based upon the language in the RFP there was potential for the WCRC to begin reviewing Liability Insurance Medicare Set-Asides (LMSA), No-Fault Insurance Medicare Set-Asides (NFMSA) as early as July 1, 2018; yet, now with 2020 in sight, a formal voluntary review program for LMSAs and NFMSAs has still not been established.  With this most recent update to the proposed rulemaking, removing reference to the types of claims within the rule, we question whether this means that a voluntary LMSA/NFMSA review program will continue to be delayed. 

While the abstract of the rule is very vague, there are a few points worth emphasizing. First, it is clear in stating that Medicare beneficiaries will be able to select an option for meeting future medical obligations.  This lends support to the theory that the voluntary nature of the review program will continue and there will not be mandatory requirements for CMS approval of WCMSAs.   Also of note, is the fact that the revised notice still indicates that the rule is  “major” and “economically significant,” as was also true within the 2018 notice.  A regulatory action is determined to be “economically significant” if it is likely to have an annual effect on the economy of $100 million or more; and it is not surprising that any proposed rule will have a significant impact on the economy and Medicare Trust Fund. 

In summary, this most recent development falls in line with what we have seen and reported over the last year. The abstract is certainly not detailed enough for us to conclude what we will see as an end result, and until a formal rule is issued, there is no foreseeable impact on liability or workers’ compensation claims.  CMS is continuing to reiterate the requirements of complying with the Medicare Secondary Payer (MSP) act, and reminding parties that whichever process they move forward with in settling a claim, that process does not relinquish parties from satisfying their MSP obligations.  While there are various ways to attain MSP compliance, it is quite clear that CMS is directing parties that the process must be the best and most reasonable to fit individual circumstances.  We will continue to monitor the rulemaking process and provide further updates as available.


[1] The WCRC is the entity charged with reviewing WCMSAs submitted to CMS for review through the voluntary review program.