The October 1, 2017 Medicare Secondary Payer (MSP) reimbursement changes

Beginning October 1, 2017, the Centers for Medicare and Medicaid (CMS) will implement a new policy regarding Medicare Secondary Payer (MSP) reimbursements—specifically,liability Medicare set-asides (LMSAs). At the request of CMS, the Medicare Administrative Contractor will begin to track the existence of any LMSAs related to a claim and deny payment for items or services that it deems should be paid from that LMSA rather than being paid for by Medicare. According to CMS, “Liability and No-Fault MSP claims that do not have a MSA will continue to be processed under current MSP claims processing instructions.”

I can not stress how important it is for trial lawyers nationwide to be aware that these changes in Medicare policy are going to generate a lot of additional issues, and potential liability, when injury victims and their lawyers settle claims with a Medicare component. 

Many trial lawyers believed this was a settled issue, but it is vital to note that Medicare's authority in this area has never changed! There has been no change in statutory or regulatory policy. Rather this is a notice of CMS commencing enforcement of a long standing provision in the law allowing for CMS to deny future payments for claims in which a liability settlement was in place. 

While this instruction from CMS does not create an affirmative directive for Medicare beneficiaries, both current and future, to create a liability set-aside (Medicare Set Aside Account), it does indicate that you MUST evaluate and begin to resolve any lien early in the settlement process. 

Further, and possibly of greater importance, is the need to understand the MSP statute even if you are currently contracting out your Medicare Lien Resolution to a third party. The stakes are substantial and you absolutely must make plans for FUTURE Medicare clients at the time of settlement by way of a set aside and determine if funds need to be placed in a MSA account to resolve that liability at settlement. 

It is the opinion of Mark Wahlstrom, at Wahlstrom & Associates, that these changes are going to dramatically impact the settlement process and increase the cost of settlements once trial lawyers understand the importance of including the present value of this possible future liability in their settlement demands and ultimately their settlements. 

If you have questions on how to handle these new MSA and MSP issues, contact your current expert or contact Mark Wahlstrom at Wahlstrom & Associates for a better understanding of the options for staying compliant and protecting both the injury victim and their attorney from future liability.  It is clear that CMS is attempting to shift towards a mandatory LMSA regime and trial lawyers must have a legally sound,and efficient strategy and process in place to deal with this increase demand for Medicare reimbursements. 

Posted on September 27, 2017 and filed under Medicare Set Aside.