There has always been some ambiguity about how personal injury attorneys should handle Medicare Set Asides in liability cases. Absent clear guidance from CMS, Plaintiffs settling a liability case should a) adequately consider Medicare’s future interest and b) appropriately document their file that they have done so.

New Change Request to Medicare’s Common Working File

However, CMS recently released a change request to modify Medicare’s Common Working File (CWF). The change request instructs the Medicare Administrative Contractors when to deny payment of a claim because it should be paid from a Liability Medicare Set-Aside Arrangement (LMSA) or a No-Fault Medicare Set-Aside Arrangement (NFMSA). A copy of the notice can be found here.

The notice explains the policy behind the change request as follows:

“Pursuant to 42 U.S.C. §1395y(b)(2) and §1862(b)(2)(A)(ii) of the Social Security Act, Medicare is precluded from making payment when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.” Medicare does not make claims payment for future medical expenses associated with a settlement, judgment, award, or other payment because payment “has been made” for such items or services through use of LMSA or NFMSA funds. However, Liability and No-Fault MSP claims that do not have a MSA will continue to be processed under current MSP claims processing instructions.”

Testing on the new changes will begin October 2, 2017.

Final Insights Regarding the Proposed Changes

While CMS’ change request notice provides insight as to what requirements may be forthcoming, there are no new requirements as this time and Plaintiffs should continue to adequately consider Medicare’s future interest and document their file that they have done so.

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