Another Piece to the Liability and No-Fault MSA Puzzle – CMS Change Request # CR 9893

Another Piece to the Liability and No-Fault MSA Puzzle – CMS Change Request # CR 9893

As we have addressed extensively, the Centers for Medicare and Medicaid Services appear to be moving towards formalizing guidance on how to consider and protect Medicare’s interests when settling Liability and No-Fault claims.

There was the September 29, 2011 CMS Memo which for the first time referenced the term “Liability Medicare Set Aside”.  Then CMS issued a “Notice of Proposed Rule Making” (NPRM) back in 2012, that was voluntarily withdrawn in 2014.  In June 2016 CMS announced they are considering expanding their voluntary Medicare Set Aside review process to include Liability and No-Fault MSA amounts.  In December 2016 a draft RFP for a new review contractor was issued, in which CMS asks bidders to have the ability to review Liability and No-Fault MSA amounts – potentially as many as 51,000 additional cases annually.

On February 3rd, 2017, CMS released Change Request # CR9893.  This release was intended for physicians, providers and suppliers submitting claims for services to Medicare beneficiaries.  It states that CMS will establish two (2) new set-aside processes: a Liability Medicare Set Aside Arrangement (LMSA) and a No-Fault Insurance Medicare Set Aside Arrangement (NFMSA).  The release instructs Medicare Administrative Contractors (MACS) not to pay for those services with diagnosis codes (ICD-10 codes) associated with an open LMSA or NFMSA, and provides the appropriate CARC and Group Codes to be used when denying claims based on the open LMSA or NFMSA.  The effective date of this mandate is October 1, 2017.

Keep in mind the MSP is the fundamental statutory principle requiring settling parties to consider and protect Medicare’s interest in WC settlements.  The MSP provisions have always said that Medicare is secondary to WC and other insurance, including no-fault and liability insurance.   Further, Medicare’s authority to review liability settlements arises under the same MSP statute as does its’ authority to review WC settlements.

CMS Change Request # CR 9893 is another piece of the puzle that certainly tends to indicate CMS is moving in the direction of a formalized LMSA and NFMSA review process.  For those employer’s/carriers with Liability and No-Fault exposures, it would be prudent to begin developing and implementing protocols to address, consider and protect  Medicare interests.

Axiom National will continue to bring you updates regarding LMSA and NFMSA developments.

For questions or additional information please contact Geoffrey Hudson at 1-888-826-6496, or