News

October 03, 2011

On September 29, 2011, the Centers for Medicare & Medicaid Services issued its newest memorandum.  The memorandum, a copy of which follows this Alert, provides insight into the issue of when a Liability Medicare-Set Aside proposal should be submitted to CMS.  While CMS has provided fairly clear work-level review thresholds in the workers’ compensation arena, no clear guidance has been given as to the appropriateness of CMS submission in the liability insurance world.

The September 29, 2011 memorandum provides that, in the liability context, no submission of a Liability Medicare Set-Aside (“LMSA”) proposal is necessary if a treating physician provides a written certification confirming that no further medical treatment or services will be required as a result of the claimed injury.  The treating physician must make this certification “as of the date of settlement.”  CMS provides a broad definition of settlement, including settlement, judgment, award or another payment.

The newest CMS memorandum is not a large departure from the manner in which CMS addresses these matters in the WCMSA context.  We have long known that having a treating physician certify that no further care is needed is likely the most effective means for obtaining a $0.00 MSA determination from CMS.  As a practical matter, in a litigated case it may often be unrealistic to obtain a certification from a treating physician stating that no further medical treatment will be required.  Reluctance to obtain such a certification on behalf of plaintiff’s attorneys can be expected, due to fear of adversely affecting the value of a particular case.  An assurance that the certification is solely for settlement purposes may alleviate those concerns.

The new memorandum leaves many questions.  For instance, CMS has not provided guidance as to when submission of an LMSA proposal is appropriate, if at all.  It is interesting to note, however, the apparent theme of the past two CMS memorandums.  The September 29, 2011 memorandum follows the May 11, 2011 CMS memorandum, which addressed Workers’ Compensation Medicare Set-Asides (“WCMSA”).  In that memorandum, CMS reiterated that submission of WCMSA proposals for review is solely a recommended process, and that there is no federal statute or regulation requiringsubmission and approval of a WCMSA proposal.  The September 29, 2011 memorandum provides guidelines for when not to submit an LMSA.  CMS representatives have acknowledged that they are facing a significant backlog of MSA proposals that have been submitted for review.  As we are aware, this has created a review process that is known to exceed seven months in many instances.  The most recent CMS memorandums may be suggesting that the parties to litigation are free to “self-police” themselves, so long as Medicare’s interests are adequately considered upon settlement.

Our upcoming Medicare Newsletter addresses these issues further.